With Memorial Day close at hand, town officials in Oak Bluffs are scrambling to remedy a situation at Inkwell Beach where dark sediment has been deposited as part of a beach nourishment project. At a meeting Tuesday, selectmen questioned the suitability of the sand, which was dredged from beneath the drawbridge in Vineyard Haven and spread along the upper shore of the beach.

“There is metal in there still, there are foreign objects in that sand still, regardless of the black, regardless of the clay, there is still stuff in it, and it’s dangerous,” said selectman Gail Barmakian.

Town officials involved in the nourishment project were called upon to explain the situation and offer possible solutions.

Conservation agent Elizabeth Durkee said the sand was tested by the state, and deemed acceptable as beach nourishment material. The sand was dredged from the Lagoon in Vineyard Haven, and at first, it seemed the dark color would bleach out by summer, officials said.

“When the material first started arriving at the beach, it was the first few layers of the dredge and it was clean sand,” said highway superintendent Richard Combra.

But deeper into the dredge, the contractors broke up sediment that is harder-packed and more gray than sand-colored.

Shellfish constable David Grunden said in hindsight it may have been more prudent to take a core sample from deeper into the dredge when tests were performed.

Still, tests that determine the quality of beach nourishment material may not have detected the problem, Ms. Barmakian said.

“Those tests don’t reveal things that are very important to the beach experience . . . it had an odor, and that odor may not be a threat to human health according to DEP, but it’s very uncomfortable,” she said.

“I won’t let my dogs on it; it smells like oil,” said town resident Kerry Scott, a former selectman.

Ms. Barmakian asked if the sand could be removed, but Mr. Combra said that would be difficult and expensive. Next week, contractor Dale McClure of Watercourse Construction will break up the material and take out any rocks and shells.

In June, the town hopes to cover the beach with new dredge spoils from the first bridge at Sengekontacket, sand which Mr. Combra said was cleaner, more pleasant material.

“Obviously it’s not an ideal situation, but it can be remedied to a point where the beach is usable,” Mr. Combra said.

Selectman Walter Vail credited resident Richard Seelig for shedding light on the issue. Three weeks ago, Mr. Seelig brought two boxes of sand samples into the meeting to share his concern about the quality of the dredge spoils.

As Massachusetts is one of the only states to prohibit the mining of offshore sand, there are limited sources for sand the town can use to hedge against beach erosion, Mr. Grunden explained.

Dredge spoils represent one option.

“I think it’s important that we take advantage of the opportunity to use dredge sand to put on the beaches because of the erosion problems we are having,” Mrs. Durkee said.

“We are starved for sediment and eroding at a very rapid rate,” said town administrator Robert L. Whritenour. “I think the idea of having sand from close by that met the rigorous standards of the DEP is better than purchasing sand from the landfill.”

Selectman Gregory Coogan said that years ago the beach had very little sand at all. “We had parades of people complaining that there were rocks and they couldn’t walk to the beach,” he said. “So we have tried to renourish that beach, to cover it with sand, and it’s a difficult process but we are doing the best we can at the moment.”

But he joined his colleagues in pressing for a fix as soon as possible.

“I hope you will work tirelessly to make this work,” Mr. Coogan said.

In other business Tuesday, the board received an annual report from the auditing firm Powers and Sullivan.

Auditor Jim Powers drew attention to the $25 million in other post employment benefits (OPEB) liability facing the town. These are benefits other than pensions that present an even greater responsibility to employers, as health insurance costs continue to rise and people are living longer.

The town has an OPEB trust set up with no funds.

“This is something real,” Mr. Powers said. “It’s something that is not going away, and it’s an unfunded liability, and by law you have to pay for this, there is no getting out of it unless legislation changes.” Though some issues brought up at last year’s audit had been resolved, there remained issues with the reconciliation of accounts receivable. There is no designated person in charge of reconciling the activity, and reconciliation of accounts is months behind, the auditors noted.

“We are still recommending a policy on who does what and when,” Mr. Powers said. He said balances should be reconciled on a monthly basis.

In the management letter that accompanies the audit, the firm also noted an unresolved issue involving compensatory time at the police department.

Police officers in town have accrued comp time which exceeds the amount of vacation time allowed in their contracts, Mr. Powers explained. The unused vacation and comp time liability had reached approximately $624,000 as of June 30, 2013. The buildup is the result of tight staffing levels at the police department. “You are aware of it,” Mr. Powers said.

In a more general comment, the auditors pointed to a lack of formal policies and procedures for staff members involved in financial activities in town. “The lack of a formalized policy and procedure manual could be considered one of the causes to the deterioration of the town’s ability to maintain and support its ledgers, accounting systems and financial reporting to external users,” the auditors wrote in their report.

Following the audit report, the selectmen presented a certificate of appreciation to John Bradford, former planning board chairman who lost his seat in the April town election.

Mr. Bradford had served on the planning board since 1978. “We want to congratulate you on your years of service,” said Mr. Coogan. “We hope you stay active in the town.”