OLD ORCHARD BEACH — The Libby Memorial Library’s bookkeeper embezzled about $140,000 over a six-year period, say police who conducted a five-month examination of the library’s bank records.

Investigators determined that the late Linda Jenkins acted alone and apparently spent all of the money she took from the library’s accounts starting in 2006, Police Chief Dana Kelley said Wednesday.

Jenkins, 53, died of cancer on March 24, a few days after officials with Saco & Biddeford Savings told members of the library’s board about “discrepancies” in their accounts.

Police investigated and town officials moved to eliminate the library’s accounts, eventually absorbing the library’s payroll and accounts-payable functions into Town Hall’s finance department.

Libby Memorial Library is owned and funded by the town, but its board operates independently.

“The biggest reason why (the embezzlement) was able to be accomplished is that there wasn’t any oversight,” Kelley said, noting that Jenkins kept the books for the library and had authority to write checks and transfer money without anyone’s approval.

Town Manager Mark Pearson said Jenkins helped to prepare the library’s budget each year and he believes she built extra costs into it to inflate the amount of money the library got from the town. Then, if she embezzled money, necessary expenses like electricity bills and book purchases would still be covered.

“It was working. The bills were being paid,” Pearson said.

Library board members said they trusted Jenkins, who submitted monthly financial reports through a board member who acted as treasurer.

Jenkins “would say everything is fine, and we have to cut back on this because we were a little over on this line and everything was OK,” said Alice Langdon, who was treasurer from July 2011 until she resigned from the board in May.

In retrospect, Langdon said, “trust just goes so far, and anybody being a single signature on checks and making transfers should not be allowed.”

Jenkins served as the library’s bookkeeper for about six or seven years, Langdon has said, until she stopped because of failing health early this year.

Israel Collins, who has been on the board for three years, said he doesn’t recall Jenkins ever attending the board’s monthly meetings or anyone ever questioning her reports.

“Nobody ever made a fuss,” he said. “The numbers always looked right.”

A former board member, Jerome Plante, said such trust was typical of a small organization in a small town.

“I never suspected anything, and nobody who dealt with her directly suspected anything,” he said. “We trust the people we work with.”

Plante said the misplaced trust has shaken everyone who served on the board.

“After you learn something like this, you start questioning yourself,” he said. “Why didn’t you suspect something? But there was nothing to be suspicious of.”

Collins said the embezzlement cost library workers raises, which they haven’t gotten in five years.

“They would say, ‘How come we’re not getting raises this year?’ ” Collins said. “The bookkeeper would say, ‘The money’s not in the budget.’ “

The money “was stolen from the employees,” he said.

Lee Koenigs, the library’s director, said she didn’t get a raise when she was promoted to her position in June.

“We did not get raises of any kind for five years,” she said. “I know it’s because our (previous) director thought we don’t have any money,” based on the figures Jenkins provided.

Koenigs said it’s hard to reconcile the Jenkins she knew with what police say she did.

“She was very well known in this town and very well liked,” she said. “There are no words. It’s such a betrayal and makes you really wonder about your impression of people.”

Years ago, before Pearson became town manager, Old Orchard Beach stopped paying for an annual audit of the library, and the board said it couldn’t afford an audit on its own.

Pearson said even an audit probably wouldn’t have caught the embezzlement, although a red flag may have been raised about Jenkins’ ability to make payments and move money in accounts without oversight.

Kelley, the police chief, said Jenkins’ estate “is basically at zero,” so there is no money to recover.

The library got $50,000 from an insurance policy covering employee theft, and town officials will pursue a claim on the town’s insurance, arguing that since the town funds the library, Jenkins was essentially a town employee.

The embezzlement has created a rift between library workers, the board and town officials.

“We were being treated like criminals, and we were the victims, too,” Langdon said.

Because the town took over the library’s finances, there’s “an adversarial relationship at best” between the library and town officials, Pearson said.

“Certain people at the library are angry at the fact that the town stepped in to stop the embarrassment and that they don’t have the control over the funds like they had,” he said.

Pearson said he built the library’s budget from the ground up this year, carefully figuring how much was needed to keep Libby Memorial operating. That produced a cut in funding, from $225,000 last year to $180,000.

Koenigs said the new budget is too low so the library has had to reduce hours to cut costs.

“The relationship with the town is very strained,” she said, and everyone was waiting to see how the investigation would be resolved.

“This has been hanging over us like a pall,” she said.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com