The mounting problems in Oak Bluffs escalated this week as selectmen described a crisis in their accounting department and the news surfaced of fresh complaints about possible violations to state bidding laws on town contracts.

On Tuesday Oak Bluffs town counsel Ronald H. Rappaport told the selectmen that the town has again come under scrutiny by the Massachusetts Attorney General’s office after it received complaints from an unnamed resident about contracts awarded to four separate entities in violation of state competitive bidding laws. Mr. Rappaport said that he had been asked by the state attorney to investigate the possible violations.

Earlier this month the attorney general issued a strong reprimand to the town for violating the state bidding laws on a number of contracts for projects between 2009 to 2011. The town was not fined for the violations but was ordered to file quarterly reports and put town employees through a training and education program on the state public procurement laws.

Meanwhile the selectmen continued meeting in executive session on Tuesday to discuss the possible discipline or dismissal of town administrator Michael Dutton. The closed-door session resumes again on Tuesday, July 5.

When they reconvened in public Tuesday, the discussion did not get any lighter as selectmen described an impending emergency when the town’s contract with the accounting firm Sullivan, Rogers & Company runs out in the next week. The town has still not closed its books on fiscal year 2011 and has no money in its budget to pay for accounting services.

“We desperately need a town accountant and it turns out there’s nothing in our budget for even [our current accountant] to continue as a consultant,” said selectman Walter Vail. “We haven’t even really finished with our audit for 2010. The audit has been provided but we haven’t had our exit interviews with the auditors.”

Selectman Gail Barmakian said the town faced other financial problems as well.

“The town has an enormous amount of negative free cash which is not a very good thing at all,” she said. At the Oak Bluffs special town meeting on June 21 Mr. Dutton said the town had a free cash deficit of nearly $1 million. Calculated on June 30 at the end of the fiscal year, free cash includes unspent operating money from the year, and among other things plays a role in determining a town’s credit rating.

Mr. Dutton was not present at the selectmen’s meeting and the Gazette was unable to reach him at his office yesterday.

Selectmen pointed to reorganization as the only way out of the current squeeze.

“There’s a possibility to reconfigure a couple of positions so that we can hire an accountant which I think we need to do within 10 days because that’s what’s what kind of emergency I see,” said Ms. Barmakian. The fiscal year ended yesterday. On Tuesday selectmen grumbled that a long-awaited report from Mr. Dutton about reorganization had not materialized.

“Michael was going to get back to us on some suggestions on reorganizing the current finance department and that was three meetings ago,” said selectman Michael Santoro.

“It’s not going to happen,” said Mr. Vail.

Board of health member Tricia Bergeron grilled the selectmen about the delay in a job description for an unfilled assistant position in her department.

“For over five months we’ve been asking for this job description,” she said. “I’m pretty angry that we still don’t know what the job is. We need help.”

“We do too!” said Ms. Barmakian, who surprised Ms. Bergeron by proposing that the position be filled by the town’s current assistant accountant. Ms. Barmakian explained her reasoning:

“What I’m trying to do is find a way to find money for an accountant, which to me is an emergency,” she said. “How am I going to hire an accountant? The only way I can do it is if it’s funded. An assistant accountant position is already funded. So I take who the assistant accountant is now, I put her in the board of health position, which is also funded, so that I can get a town accountant.”

“This is insane, you know that,” said Ms. Bergeron.

“That’s the only way I can do it,” replied Ms. Barmakian.

“Oh my God,” said Ms. Bergeron.

“I understand your frustration,” said selectman Greg Coogan. “This would only be a temporary fix.”

Ms. Bergeron questioned the legality of the move, saying that the board of health is responsible for all hiring and salary issues within the department and cautioned that there could be union implications as well.

“We just held interviews for this position,” she said. “We just offered somebody a job.”

Ms. Bergeron warned that the town couldn’t sustain continued cuts.

“It’s the people of Oak Bluffs that are going to suffer when nobody is in these departments and they can’t get anything done,” she said.

The tight staffing situation at town hall became evident on Tuesday when Lobsterville Bar and Grille owner Peter Bradford said that his application for an entertainment license had been languishing in town hall since April. Shephard Fine ArtSpace gallery owner Melissa Breese was chastised by selectmen for the use of her space without a business license — but Ms. Breese said she had been trying to arrange an inspection with the town since January.

“I came in with an open checkbook and I was told the paperwork wasn’t ready and I would be called when it was,” she said. “I’m still waiting for that phone call.”