Claims that cash saved from scrapping the £400k rebuild of Cardigan's Canolfan Meugan was used to repair the roof of Lampeter School was strongly refuted this week.
The centre for people with learning disabilities is due to be demolished in the next few weeks after being deemed unsafe. The rebuild was a victim of the council's cutbacks.
People who used the centre are now housed in nearby Hafod day centre.
But Cllr Lyndon Lloyd told this week's healthier communities scrutiny committee that he had heard strong rumours the Meugan funds had been sidelined for school roof repairs.
"Why was the decision made over Canolfan Meugan so quickly?" he asked.
"There are very strong feelings about this. Can't the money be used to develop holiday or respite schemes for young people in the south of the county?"
But Cabinet member Cllr Gareth Lloyd said there was no truth that the school roof repair bill had led to Canolfan Meugan being scrapped.
"I object to that strongly. The sum was earmarked but then went back into the general pot. The decision not to rebuild Canolfan Meugan was not done on the basis of funding other projects," he said.