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The fallout from the audit of the Buffalo Police Benevolent Association continued Wednesday on two fronts with word that the current union president resigned and confirmation that a federal investigation is under way into the handling of union funds.

Lt. James Panus, the last of the union officers to work under the old administration of former PBA President Lt. Robert P. Meegan Jr., submitted his resignation Tuesday rather than face a vote that sought his removal.

PBA members had introduced the resolution last week but tabled it for 30 days. At that same meeting, Inspector William Misztal resigned before union members voted on a resolution to remove him as treasurer.

Kevin M. Kennedy, who automatically moved into the PBA presidency from the office of first vice president, said he and his staff are working with the U.S. Attorney’s Office to comply with its subpoena seeking the union’s records dating back to 2008.

The subpoena must be complied with by next Wednesday, and it will include the forwarding of financial records, bylaws and minutes of meetings, Kennedy said.

A recently released audit, requested by union members, uncovered a lack of financial controls on spending of union dues, citing expensive lunches, out-of-town trips to union conferences that permitted union officers to bring guests at the PBA’s expense and questions regarding Meegan’s use of a PBA credit card.

Kennedy, during his first full day as head of the union on Wednesday, said that a series of amended bylaws are now in place that create a system of “checks and balances” for the handling of all union funds.

Attempts to reach Panus and Misztal to comment have been unsuccessful, though Panus told The Buffalo News last week his focus was on obtaining an arbitration award for the unsettled 2007-09 contract that would represent an equitable settlement for police officers.

In addition to cooperating with federal authorities, Kennedy said he plans to make the union more open.

“We’re going to try and be more inclusive and get more members to be involved in the process,” he said. “We have 741 active members and 2,000 retirees that are affiliated with the union.”

Kennedy also thanked Panus and Misztal for their years of service.

“I think Jim realized the only way this union was going to survive was if the membership saw new direction. I think he put the union before himself,” Kennedy said of Panus. “A lot of people realize he was a hardworking person and people should be appreciative.”

Kennedy was not the only one to express gratitude to Panus, who served as recording secretary since 2008 and then in 2011 was elected to a two-year term as president.

“Jim was an extremely dedicated union steward, and his heart was and always will remain in helping the membership obtain the best working conditions possible,” a longtime union member said. “He really did the right thing by not forcing us to have another month with all this turmoil. I think this is a positive change because it allows the new president to concentrate on union business, minus any distractions.”

In requesting anonymity but describing himself as a spokesman for a number of union members, the officer also said that many believe Panus and Meegan, who had served 24 years as president before retiring from the police force 15 months ago, “always had the best interest of the membership to the very best of their abilities.”

Kennedy, meanwhile, says he plans to run for PBA president during the union’s regular elections in November. A special election, he said, will be held within 45 days to fill the positions of treasurer and second vice president.

Detective William Gambino, who held the post of second vice president, has moved up to first vice president.

Kennedy is an accident investigator in the Traffic Division, but under provisions of the police contract will work full time as union president.

email: lmichel@buffnews.com