Oswestry Rural Parish Council agreed the money should go to Morda & Sweeney Village Hall last May.
The vote sparked an investigation, which was commissioned by a group of villagers and presented to councillors before their meeting this week.
The report, by Wiseman Investigations, questioned whether the council was allowed to issue money, other than a grant, to the hall.
It also questioned its ownership and suggested the future plans for the hall could involve its demolition and replacement with a smaller building and five affordable homes built on part of the land.
The village hall is off Weston Road, next to Morda's playground and football pitch.
Councillor Tony Milner, who proposed the issue be passed onto the police, said the matter needed to be looked at by experts to ensure there was no complicity or duplicity.
“Something is very wrong here,” he said.
Councillor Martin Jones called on the council to rescind its May decision and look at it afresh.
“I voted on what I believed to be money to repair the village hall, not to replace it with a smaller building,” he said.
He was reminded by clerk, Sharon Clayton, that the money had been agreed in the council’s budget earlier in the evening.
However Councillor John Davies said the money was only earmarked for the hall and was not set in stone.
“I am sure we will not part with a penny without being assured about the finances, we will consider the details of handing over any money with due diligence,” he said.
Suggestions that the matter be referred to the Charity Commission were made by Councillor Phillip May.
He added: “I would remind the council that the report has been compiled by Wiseman Investigations which has made outrageous statements about the parish council in the past.”
The Wiseman report said that the matter had been reported to the police last year but an officer had made the decision not to proceed declaring it to be vexatious.
Councillors at the online meeting also called on the village hall trustees to present to the council accounts for the past five years.
At the beginning of the council meeting a letter was read from investigator Paul Wiseman.
He asked whether it was true that, although the parish council was a custodial trustee for the village hall, it should not interfere in the day-to-day working of the hall.
He also asked for confirmation that the council was not financially responsible for the hall.
“If that is the case why was it that in May 2020 £92,000 was set aside for the hall?” the letter said. “If it was a grant, why did the council not say that it was a grant?”