Audit finds $600 missing from Milo town coffers, chief says

Milo Town Manager Jeff Gahagan stands in front of the Milo Town Hall in October 2009.
Milo Town Manager Jeff Gahagan stands in front of the Milo Town Hall in October 2009.
Posted May 25, 2012, at 6:55 p.m.

MILO, Maine — An investigation into $45,000 missing from the Kiwanis Club has been broadened to include $600 discovered missing from an account the club created with the town, Police Chief Damien Pickel said Friday.

The Kiwanis Club created the account with the town to pay for renovations to the kitchen in the town office. The club contributed several checks to it that have been accounted for, but the $600 cash is not there, Pickel said.

“They cannot account for it,” Pickel said Friday of auditors from the firm of James W. Wadman of Ellsworth, which the Board of Selectmen hired to investigate town books.

Selectmen ordered the audit in early April after the sudden resignation of Town Manager Jeff Gahagan for reasons of ill health. Gahagan resigned as the treasurer of the Three Rivers Kiwanis club on April 5, a day before resigning as town manager, in the midst of an investigation by the Piscataquis County Sheriff’s Department, according to Piscataquis County District Attorney R. Christopher Almy.

Pickel said he misspoke Wednesday when he reported that the auditors discovered no problems during their audit. The auditors found that the town’s general accounts were fine, but the Kiwanis and town had set up the kitchen fund as a special account, he said.

The auditors discussed their final report with selectmen at the board’s meeting Tuesday, which Pickel could not attend due to illness, he said.

Selectmen ordered the audit on April 17 despite Gahagan’s lack of access as town manager to the town’s finances. They also hired a firm to conduct a search for a town manager. That search is continuing, officials said.

Interim Town Manager Roger Raymond, the retired town manager of Bucksport, began working for Milo the week of April 24 as a temporary replacement for Gahagan.

The audit provided by Wadman’s firm was forwarded to the sheriff’s office, Pickel said. Sheriff’s Department Lt. Bob Young, who Pickel said is handling the investigation, did not return telephone messages seeking comment Friday.

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