— After 90 years in operation in downtown Durham, a $1.1 million deficit threatens the future of The Carolina Theatre.

“The issue that brought this whole financial problem to light was a sales tax payment that was due to the state that was supposed to have been paid and wasn’t,” said theatre board chairman Scott Harmon.

Following that discovery, the board hired an external accounting department that uncovered an even larger problem.

“What we realized was that, as of the end of the fiscal year, we were at a deficit of $1.1 million,” Harmon said.

In the past two months, the theatre’s chief executive officer and chief operating officer stepped down. There have been no indications of internal wrongdoing. Harmon said what happened can be described as a case of bad bookkeeping.

The foundation that manages the venue for the city of Durham is working to find a solution to the million dollar problem, and one option is to get help from the city.

“When the city manager has had all of his questions answered, the city manager will make a recommendation to the council about what he thinks is appropriate,” Harmon said.

Other solutions have also been offered. In an email, the Summit Church, which uses the venue on Sundays, asked the city to consider letting them take over the lease or even buy the facility if the financial issues become more serious.

“We’re not anywhere near that place,” Harmon said.

Harmon said keeping customers satisfied as they work to rebuild is key.

“This theatre means so much to the citizens of Durham,” he said.

Theatre leaders said they may reduce the number of shows offered each year, but the quality will not be affected. They also said they will be relying on donors to help them recover.