Dana Anderson, who has been on paid leave from his top-level city job pending two separate investigations, is expected to return to work Thursday.

In a press release issued Tuesday afternoon by City Manager Jim Gailey, the city announced an audit found no financial discrepancies in his department and defended its decision to place him on leave after he had settled a suit accusing him of embezzling from an association for basketball referees.

“Taking into account the external review performed and the internal work completed, City Administration believes that it has acted appropriately under the circumstances and that no further departmental reviews are warranted at this time,” the release read. “Mr. Anderson’s return is welcomed by City Administration and the large number of city employees who continue to support him and who are eager to once again work alongside him.”

On Monday, Anderson’s attorney, Gregg Frame had said Anderson was waiting to be cleared by his physician before returning later this week or early next week to his post directing public works, parks and recreation for South Portland.

“Dana had to get the OK from his primary care doctor because, as you can imagine, the last three months have been very stressful for him,” said Frame, an attorney with Taylor, McCormack & Frame in Portland.

“He has been out on administrative leave as a result of what turns out to be inappropriate charges or allegations against him.”

In the release Tuesday, the city also announced that Anderson would no longer direct the city’s libraries – a change made at his suggestion.

Anderson, a 30-year city employee, was asked to temporarily leave his job in April, pending a financial audit of his department and a consultant’s review of complaints against him by a former worker.

Frame said he was sent a copy of both reports and is satisfied with them. He said he has no objection to the city publicizing the findings, though Gailey has maintained they must stay private to protect the confidentiality of personnel.

“The consultant’s report involved 20-plus interviews and came out exactly as we thought it would,” Frame said. He said the financial audit has been released to the City Council, so that should be made public as well.

“I told Dana from the get-go that the process has to bear itself out. I said ‘It may be difficult but bite your tongue and let the process work.’ “

Frame also indicated Monday that Anderson’s return to work has been slowed by negotiations with Gailey and the city’s attorney. He declined to detail the discussions.

“There have been a lot of balls in the air,” Frame said. Both Anderson and the city want “to make sure everything is done appropriately,” he added.

“Our whole goal is let the process work itself out, so Dana’s name is cleared and he can return to work as he has done for 30 years,” Frame said.

The city ordered a financial audit of Anderson’s departments after he was accused in a civil suit of embezzling funds.

The International Association of Affiliated Basketball Officials alleged in court documents that Anderson took funds for personal use when he served as volunteer treasurer.

In February, Anderson settled out of court for $900. He maintained his innocence. But the city decided to conduct a financial audit of his departments to alleviate public concerns.

Gailey, at the same time, hired independent consultant Michael Wing to review separate allegations by former Community Center Manager Deb Smith that she was dismissed after making complaints to Anderson about center operations.

Smith was one of five people laid off in February, when Gailey made cuts to close a budget gap.

Frame said that the city forwarded both the audit and Wing’s report to him.

He said that he and Anderson would welcome the release of the report. “It is my understanding that Smith does not want it released,” Frame said.

Gailey has refused to release Wing’s investigation or Smith’s letter of complaint to the city, which prompted the outside review.

Smith has declined to release her copy of the investigation, on the advice of her attorney.

But she said that the report failed to address or mention her specific complaints.

Frame said at this point Anderson just wants to get back to work. Anderson has had “a rough haul but is seeing the light at the end of the tunnel and is energized to return to his job,” he said.

“He has spent more than half his life working for the city of South Portland,” Frame said. “He is excited by the support he has had throughout this process and is ready to get back to work.”