Newburgh selectman reveals alleged theft

Posted April 10, 2010, at 1:50 p.m.

NEWBURGH, Maine — The first selectman broke the news to stunned residents Saturday morning during the annual town meeting that apparently the former deputy town treasurer has said that she took $147,000 in funds from 2007 to 2009.

An ongoing investigation recently revealed around $50,000 in unauthorized payments in 2009, but no charges have been brought against anyone.

Cindy Dunton, the former deputy town treasurer, reputedly told investigators she took the money by changing town warrants after they had been signed, Leonard “Bud” Belcher said, reading from a prepared statement that he said was vetted by the town’s lawyers.

“Mrs. Dunton has resigned her position and is no longer employed by the town, “ he said. “She has accepted responsibility for her actions and is cooperating with our investigation.”

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Town Manager Nancy Hatch also resigned, Belcher added, although the statement from which he read said Hatch has not been implicated thus far in the investigation.

“However, she was in charge and did not discover what had occurred for a substantial time period,” Belcher said. “When she did discover the problems, she did not bring them to our attention. It is best for the town if we have a different town manager.”

The statement said the town has not yet gone to the Penobscot County District Attorney’s Office with the information because of the ongoing investigation, which includes an attempt to verify what Dunton told investigators. When the investigation is complete, Belcher said, the town expects to refer the results to county officials.

Dunton has said she would pay the town back “as soon as she can,” Belcher said, and the town is expecting a “substantial payment” soon.

The town’s cash balance at the end of 2009 was verified, Belcher said, and it is not believed there were substantial thefts in 2010.

Hatch could not be reached for comment, and Dunton did not return a message seeking comment.

Saturday’s meeting was a continuation of the annual town meeting started on March 13. During the earlier meeting, selectmen conducted two items of business and then postponed the rest of the agenda, which included discussion and passage of the town’s budget for the upcoming fiscal year, because inaccuracies had been discovered in financial records.

An investigation was announced a few days later, and both Dunton and Hatch were placed on administrative leave with pay.

More than 100 people attended the town meeting Saturday morning at Newburgh Elementary School expecting to hear an update on the investigation from selectmen. The meeting occasionally became heated as residents questioned how closely Belcher and fellow Selectmen Leona Smith and Stanley Smith have been watching the town’s finances.

Belcher spoke for more than seven minutes, eliciting audible gasps from residents at the moment he read the section about Dunton’s confession and the amount of money she said she took.

“I would also like to apologize to you, as would Skip and Leona,” Belcher said, reading from the statement. “We are your selectmen and this occurred on our watch. We have certainly learned from this experience and expect to make sure nothing like this ever happens again in the town of Newburgh. We are committed to making whatever changes in our procedures are necessary to prevent theft from the town in the future.”

Leona Smith said the inaccuracies were not noticed during the town’s annual audits, and selectmen were given inaccurate information.

“If our auditors did not catch it, do you really think the selectmen would catch that? Nope,” she said. “I guarantee you, no one would have caught that, even with all the meetings we have. We are presented with a budget, we are presented with warrants. … The books that we did look at were what were altered, and I can’t say any more than that. Later on we will have a full report, and everybody will totally understand how it happened and how she was able to manipulate the books.”

The selectmen declined to go into specifics about what Dunton might have taken from specific areas of the budget, but when residents questioned a $6,059 item in the 2009 recreation department budget, Leona Smith said, “If Cindy Dunton was here, she could probably answer that for you.”

The missing $147,000 has depleted the town’s surplus, which means the missing funds won’t affect the coming year’s budget, the selectmen said.

“We’re not working off the surplus,” Leona Smith said of the budgeting process. “The surplus is actually there to be able to help the town if we need it. We’re working only on taxation and fees paid to the town for this year.”

First Selectman Belcher said he would not step down, as Hatch did, despite a call to do so by an audience member. Belcher has not been implicated in the loss of funds.

Interim Town Manager Lois Libby, who is the town’s longtime clerk, attended the meeting as did interim deputy treasurer Sherri Denis.

The town already has spent $17,000 on the audit, which is expected to cost up to $40,000. The final report should be ready in several weeks and will be made public.

Residents did pass the town budget, Libby said when reached at home Sunday.

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