NORTH PROVIDENCE — The town did not use more than $380,000 in federal stimulus money to help make its payroll Friday, Mayor Charles A. Lombardi said Tuesday, correcting his statement of last week.

Instead, according to the mayor, the town finance director and Lombardi’s director of administration decided on June 10 to use a different pool of money. But Lombardi said Tuesday that he wasn’t informed of that decision until Monday.

Lombardi said Finance Director Maria Vallee told him about the switch after two state officials visited her Monday and questioned her about the reported use of the stimulus money, which was intended for the School Department.

“In hindsight,” Lombardi said, “she’s the finance director and she made the right decision.

“I wasn’t around much on Friday,” Lombardi said. “Things happen and I’m OK with that. We don’t get into a situation of micromanaging. …We made the payroll. That was the biggest thing of all.”

Lombardi raised eyebrows June 10 when he refused to explain what he believed was the plan to move money around in town accounts to cover the $2.5-million biweekly payroll, saying it “could be questionable.”He had for several weeks cast doubt over whether the town would have enough money to make the payroll in the face of an anticipated $10-million budget deficit.

The next day, after being told by the town solicitor that borrowing the stimulus money for the payroll was OK, Lombardi went public with the plan as he knew it.

But at that point, the finance director and Lombardi’s director of administration, Rocco Gesualdi, who works closely with the mayor, had already decided to tap a different source to cover the payroll.

Vallee said Tuesday that she did not realize the mayor was out of the loop and was unaware that she and Gesualdi had tapped revenues generated by the Fire Department’s rescue service for the payroll.

“I don’t see the mayor every day,” she said. “I was under the impression that Rocco had informed the mayor that he had used the rescue monies.”

Said Gesualdi Tuesday: “I’ll take the blame for not bringing him up to speed as much as I should.”

Based on an article in Friday’s Journal with Lombardi talking about what he believed to be the use of the stimulus money for the payroll, staff in the state Office of Economic Recovery and Reinvestment decided to launch a “fact-finding mission,” according to Governor Carcieri’s spokeswoman, Amy Kempe.

Monday afternoon, two investigators from the state Department of Education showed up at Town Hall with questions about using the stimulus money for the payroll, Vallee said.

“We told them no, that we did not,” Vallee recalls.

Due to all the confusion, the state will follow through on the process of gathering all of the necessary facts to determine if anything inappropriate happened with the stimulus money, Kempe said Tuesday.

“We’re doing our due diligence,” she said.

Payroll Chronology

Wednesday: After several weeks of casting doubt over whether the town would have the money to make its $2.5-million municipal payroll June 12, Mayor Charles A. Lombardi says the checks will go out. But he won’t say where he plans to get all the money, offering that it “could be questionable.”

Thursday: Lombardi says $381,000 in federal stimulus money targeted for the School Department was used to close the payroll gap. He says he could not disclose that the day before because he was awaiting advice from the town solicitor on the propriety of the decision. The solicitor ultimately ruled that stimulus money could be borrowed to make the payroll, the mayor says.

Monday: Based on a story in Friday’s Journal about the use of the stimulus money, state officials begin a “fact-finding mission” into the mayor’s account of the stimulus money use. After a visit to Town Hall by Department of Education officials, town Finance Director Maria Vallee tells the mayor that stimulus money wasn’t used after all. Instead, she and Lombardi’s director of administration, Rocco Gesualdi, had decided on Wednesday to tap a different account to close the gap. They never told the mayor.

mreynold@projo.com