The city of New Castle has referred an investigation into the possible misappropriation of funds to Lawrence County’s district attorney.

Mayor Anthony Mastrangelo issued a press release yesterday afternoon saying that Zelenkofske Axelrod, the firm hired by the city to conduct an audit for 2007, “discovered accounting irregularities within the city’s finance department.”

“Preliminary findings indicate the misappropriation of assets by personnel within the finance department.”

The mayor revealed that an employee has been suspended without pay. He did not reveal the person’s identity, but the New Castle News has learned that the employee is Nancy Miles.

Mastrangelo said the irregularities were discovered Aug. 21.

City solicitor Michael Bonner said the matter was turned over to city police on Wednesday. On Thursday, the police spoke with District Attorney John Bongivengo who is conducting a review of the matter.

Contacted yesterday, Bongivengo said, “I’ve been in contact with city officials.”

He said he did not want to make any additional comments at the present time.

“It’s premature yet to determine whether there is anything criminal,” Bonner said, adding that it was for Bongivengo to determine.

He said Bongivengo will decide whether he keeps the case or refers it to the state attorney general. Either of those offices will determine “if it needs to be prosecuted,” he said.

Bonner said the administration referred the matter to the police department to make sure that “everything is done at arm’s length.”

The mayor said the auditor discovered irregularities in certain accounts. The nature of those irregularities were not revealed. Mastrangelo said he did not know the amount of money that is involved, nor would he volunteer what the approximate amount may be.

He said that Zelenkofske Axelrod, based in eastern Pennsylvania, is continuing its examination of all city accounts.

Asked if a forensic audit would be conducted, Bonner said that’s a decision the district attorney or attorney general would have to make.

The city’s insurance carrier has been notified of a potential claim. Bonner said the insurance policy covers criminal acts and covers the loss of any city funds.