WEST HAVEN — The city has returned almost $1.2 million it took from the police pension fund to pay bills earlier this month, but questions remain about the legality of the grab.

Police Commission Chairwoman Lisa Whitney Yarbor confirmed Tuesday she was informed by the pension fund manager that the full amount taken has been returned to the fund.

On Dec. 11, Finance Director Robert Barron had almost $1.2 million wire-transferred from the pension fund to the city’s general fund. The move sparked outrage among members of the Police Department who argued vehemently at a meeting last week that the pension fund should not be used as a “piggy bank” for the city when it needs cash.

Yarbor said she was happy to see the money returned to the fund, but she does not intend to drop the matter.

“This is not over,” she said. “We still have to find out why things happened the way they did and how we can prevent it from happening again in the future.”

Police Chief Colleen Smullen, police union President Lt. Burton Gifford Jr. and numerous officers attended a meeting Dec. 23 to voice their anger over the city taking the money without first getting an OK from the entire police pension board of the City Council.

Gifford on Tuesday said the union is grateful the money has been returned but he still has questions about the legality of the action.

“We have to put mechanisms in the place so they can’t do this again and use the fund like a piggy bank,” he said.

The full Board of Police Commissioners and Smullen learned of the $1.2 million withdrawal on Dec. 15, four days after it happened. The revelation came in the wake of startling news that the city was at risk of not being able to pay its December bills if the state did not pay $1.5 million that Mayor John M. Picard said the city was owed.

Picard said Tuesday the city has received most of that money and more state money in the form of PILOT and other funds, but that he is still waiting on about $1 million that typically comes at the end of the year. Picard said the city’s tax collections also have picked up since the middle of month, further enabling the city to replace the money in the pension fund.

“We said all along that when we got the money, we’d put it back in,” Picard said, adding the city had until June 30 to contribute to the pension fund, but decided to do it early. Picard said he understands the concerns of police officers, but stressed their pensions were never affected by the move.

Assistant Corporation Counsel Henry Szadkowski maintains the city charter authorizes Barron to make such withdrawals from the pension fund and he is not required to inform the City Council of such action. Picard had argued the city was simply withdrawing its annual contribution to the fund with the intention of paying it later in the year.

At last week’s council meeting, David Moran of Morgan Stanley, longtime manager of the police pension fund, explained the sequence of events that led up to the huge wire transfer.

He said after he received the e-mailed request for the money from Barron, he consulted his supervisor, who advised him to carry out the request. So Moran contacted police Commissioner Grace Hendricks, who serves as chairwoman of the pension board, and she gave the OK.

Moran emphasized that he advised Hendricks to go along with Barron’s request. The money was wired from the police pension fund to the city’s general fund Dec. 11.

Over the past week, police representatives and city leaders have called for more controls over disbursement of money from the pension fund, including having more than one signer on the account.

Currently, Hendricks is the only signer.

City Councilwoman and finance committee Chairwoman Nancy Rossi said the meeting set for Jan. 6 to further discuss the pension grab and the city’s financial state will go on as planned and she hopes Picard and Barron will be among the attendees.

“Although the Dec. 23 meeting was a very good beginning on identifying the problems, we still didn’t get any specific answers,” she said.