Edwards, 51, is still the elected chief, but he has no authority over the 22 other officers on the force.
According to documents released by Sallisaw city officials, Edwards has confessed to taking city funds. He told investigators he didn't see anything wrong with it.
“It's all been paid back,” he said in a recent interview. “It's not like I tried to steal the money.”
Edwards is being investigated for leaving an IOU for $40 inside a petty-cash drawer at the police station.
The chief also told investigators that he took $20 two other times.
Sallisaw police Capt. Beau Gabbert, who is overseeing the department's daily operations during the 90-day period, indicated Edwards was questioned in mid-January.
“I asked him if he knew taking public funds was a crime, and he stated that he didn't think of it that way,” Gabbert wrote.
Baker said it is against Sallisaw city policy to take public funds for personal use.
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Sallisaw is about 25 miles from the Arkansas border. The city has a population of about 9,000.