LISBON – A recent audit of the town’s finances uncovered an economic development loan made during the 2006-07 fiscal year that may have been “inappropriate or even fraudulent,” according to the auditor.

The irregularity discovered by Runyon, Kersteen and Ouellette of South Portland is under investigation by the District Attorney’s Office, according to town attorney Roger Therriault.

Therriault declined to discuss the case, saying it would be inappropriate to comment on an ongoing investigation.

Town Manager Stephen Eldridge, who has been on the job since early January, also declined to comment, as did the DA’s office.

Efforts to contact Dan Feeney, the longtime economic development director who resigned last year, were unsuccessful.

Police Chief David Brooks, who served as interim town manager at the time of the audit, said he could not comment on specifics of the ongoing investigation.

He said the case was originally scheduled to go to an Androscoggin County grand jury in February, but was postponed by the district attorney’s office to the March grand jury because of the volume of potential witnesses.

The auditor listed an unspecified loan made by the town’s Economic Development Department in the “significant deficiencies” portion of its annual audit report.

The audit did not mention other loan irregularities, Brooks said.

In the report, auditors explained to the Town Council that their process of confirming loans includes looking for such things as validity, amounts owed and whether the loans are up to date or delinquent.

Auditors also reported that several loans made in past years have insufficient documentation in the form of a loan file, and recommended that the town reconstruct files that are not up to date and complete.

Additionally, the company recommended that the town reactivate a loan committee to approve new transactions.

In an update to the report, Runyon, Kersteen and Ouellette noted that Jennifer Stowell Norris, who was hired last July to replace Feeney, had created files for outstanding loans and was in the process of reconstructing missing information. However, she resigned in December. Town officials are interviewing candidates to fill the position.