The town of Chebeague Island suspected a municipal employee of stealing more than $3,000 in cash deposits over a nine-month period, but poor bookkeeping hindered the investigation and the case was dropped, according to an investigative report released by the Cumberland County Sheriff’s Office.

An investigation into missing money began in January when Town Administrator Marjorie Stratton, working on a tip from another employee, discovered that no cash deposits had been made into a certain account between April and December, according to a heavily redacted investigator’s log released by the sheriff’s office in response to a Freedom of Access Act request.

The sheriff’s office took over the investigation with help from the town, but hit roadblocks because of the town’s “unreliable” bookkeeping, evident by illegible receipts and missing record books, some of which were later found under file cabinets. In another example, a detective looking through records provided by the town discovered an envelope with hundreds of dollars in cash that was never deposited. Soon thereafter, the case was closed without a public explanation about what happened.

Although the redacted report provides no explanation for why the investigation was suddenly dropped, Selectman David Hill said there was simply not enough evidence to draw any conclusions.

“It could be a clerical error. It could be malfeasance. We don’t know,” he said.

Chebeague Island, the largest island in Casco Bay with about 400 year-round residents, is Maine’s newest town, having seceded from Cumberland in 2007.

The Portland Press Herald requested the report from the sheriff’s investigation under the Freedom of Access Act on Feb. 9, after town officials issued a news release saying there was no basis for criminal charges and declined to discuss the case. When the sheriff’s office informed the town that it planned to release the report, the town objected, citing privacy laws.

A month after the request was made, the sheriff’s office released a 27-page report in which the names and positions of town employees and the town departments involved were blacked out, as well as what accounts the deposits were missing from and why the case was ultimately dropped. The entire final entry made by the investigating officer was redacted, except for the words: “Case cleared unfounded.”

The report did indicate that the employee suspected of stealing money had been under contract with the town and was no longer working there when Stratton made the complaint in January.

Stratton began to look into the possible theft after another employee expressed having a “funny feeling” about the employee in question and being uncomfortable handing over money to that person, the report said.

That led Stratton to look at certain deposits made in December and saw that there were only checks deposited, even though the other employee remembered also receiving cash deposits that month, as usual.

The receipts for the deposits were missing from the town office, so Stratton obtained second copies kept elsewhere and couldn’t account for $2,900 in cash. Also missing was a log showing who brought the deposits to – and received them at – the town office.

Stratton and the town bookkeeper conducted an audit and found $3,208 that should have been deposited between April and December was missing.

At a meeting on Dec. 29 between the employee in question and two members of the Board of Selectmen, the selectmen asked the employee for help locating the missing logs and receipts, according to the report.

A few days later, the report said, that employee wrote a letter to the Board of Selectmen admitting fault for misplacing the funds, saying it was a mistake and not intentional and that “psychics were telling her that they would find the money in bags.”

A request by the Portland Press Herald for a copy of that letter was denied by Stratton, who said it is a confidential personnel record.

The detective from the sheriff’s office conducted interviews with other town employees, including one who was taking money home before bringing it to the town office to be deposited. The employees admitted their accounting practices were unprofessional and “sloppy.”

Another employee, who worked under the one suspected of stealing, said his or her boss “always has had financial issues” but also “always showed character and preached to do things the correct way,” the report said.

Meanwhile, Stratton discovered receipt books and logs in and under cabinets in the town office and turned them over to the sheriff’s office, which had solicited the help of Cumberland County’s finance director, Alex Kimball. Kimball “agreed that it appeared as if Chebague Island’s fiscal management and accountability practices were below standard and of concern,” the report said.

The sheriff’s office began entering data from the town’s records into a spreadsheet to compare copies of the receipts to the deposits that were made. However, many of the receipts were illegible or incomplete, and the sheriff’s office, consulting with Kimball, determined that compiling the data was futile.

Also, while going through the materials, the detective found $590 cash in an envelope in a file dated October 2014, which he found “most troublesome.”

The detective then tried to contact the employee in question, who when reached declined to comment. The next day, Feb. 3, the case was cleared.

On Feb. 8, the town issued a news release saying there had been an investigation into “potentially unaccounted for public funds” in the amount of “a few thousand dollars,” but that the sheriff’s department concluded that there was “no basis for filing criminal charges.”

It said the town has since “taken action to improve the accounting methods and further implement best practices.”

Stratton, the town administrator of a year and the fourth person to hold the position since the island has been its own town, said Friday that proper procedures and policies were already in place, but training was needed to make sure they were followed.

“It is all about education, documentation and redundancy,” she said. “We have reviewed our procedures with all town employees to make sure that they understand that these internal controls are in place to protect the employee and the town and they have to be followed.”

Donna Damon, a former member of the Board of Selectmen who has lived on the island most of her life, said she hasn’t heard anyone talking about the situation since the criminal case was closed.

“I think most people feel that the matters have been handled and that new controls are being put in place and that we have confidence that this won’t happen again,” she said. “Sometimes they’re just unsolved cases. That’s the way it goes.”

Hill, the selectman, said he imagines people might be more concerned if there was more money involved. Still, he said, it’s frustrating not to have answers.

“It’s kind of a mystery,” he said.