A review of North Yarmouth’s town books has found the reason the Wescustogo Hall fund came up $145,000 short last year.

A recent audit showed the money was mistakenly allocated to the town’s general fund.

Ron Smith of RHR Smith & Company audited the books after interim Town Manager Chris Bolduc was asked to find out in August why Wescustogo Hall had a deficit.

Bolduc looked at billing, town records and construction overlays that might not have been accounted for, but didn’t find a reason for Wescustogo Hall’s missing money.

“I really felt like we needed an auditor to come in and take a look at this,” Bolduc said at the Dec. 7 Select Board meeting.

It turned out that a $171,000 insurance payment the town received in 2019 for the 2013 fire that mostly destroyed the original hall was not fully credited to Wescustogo. Instead, some of the money was placed in the town’s general fund as surplus.

The misallocation was just that, said Select Board Chairperson Brian Sites. No criminal intent is suspected.

The Wescustogo Hall fund was established after the fire to pay for reconstruction costs and now funds Hall-related expenses ranging from maintenance to equipment. Funding comes from insurance payments, donations, fundraising and any other money associated with the center.

The general fund pays for all of North Yarmouth’s bills and operations, Sites said.

Smith said his firm spent about a month going through the town’s books and speaking with staff members.

At the recent Select Board meeting, Smith recommended rectifying the problem by placing $171,000 into the Wescustogo Hall fund, which will bring the town’s general fund down by that amount. The general fund will contain about $1.2 million after the correction, he said.

The review showed that another $7,000 was also incorrectly allocated to the general fund instead of the Westcustogo fund, but Smith said it’s unclear where those funds came from.

The Wescustogo Hall fund now contains about $33,000. According to Sites, the money will be used to pay down the principal on the hall.

According to Smith, the town likely did not spend the $171,000 that was placed in the general fund because it was earmarked for surplus.

When asked if the town should create a finance committee of some kind to oversee town finances, Smith said the town had “proper firewalls” in place to prevent an accounting issue like this, but it simply comes down to some not being effective.

To prevent a similar issue from occurring, Smith said there are “a combination of things” the town could do, but that will need to be determined by town officials and residents who know what will work best for the community.