Donald Hewitt's plea was heard in federal court in Brattleboro, Vt., in answer to a charge of one count of wire fraud. The charge carries a maximum of 20 years.
Hewitt is expected to be sentenced in August.
Waples said he did not know what Hewitt did with the money, a question some in town would like answered.
Hewitt, 59, lived in a small house, didn't drive a flashy new car and shoveled his own driveway, Ira's town clerk Candy Slack told AOL news today.
"He didn't live large," she said before Hewitt's plea. "We all want to know where it is. Is it in a jar under the house?
"People are angry that we would trust him with doing the right thing and he took the money," she said. "He seemed like an honest person who everybody trusted.
Hewitt's lawyer, Alison Arms, did not return messages to AOL News today.
Hewitt was elected every year as the part-time treasurer of Ira -- a central Vermont town with a population of about 450 -- from 1978 until he stepped down in 2009, as state police began investigating town funds after officials noticed discrepancies.
He was arrested by Vermont State Police in October 2010 on an embezzlement charge. An audit found that $404,268 was embezzled from the town and school accounts, state police said. The case was transferred to federal court.
Waples, the prosecutor, said the plea covered about $300,000.
"He did take more money than that, but he paid some of it back," the prosecutor said. "We believe it's $300,000, and he didn't dispute that."
Hewitt's arrest was a jolt to the town, which is so small it doesn't have its own post office, a town center or its own schools. Hewitt had worked at home and earned about $3,500 in his last year, Slack said.
When members of the Select Board started asking him about bill payments in early 2009, he said the money went to his personal expenses, The Associated Press said. One of the signs that something was wrong was a lawsuit filed against the town by officials in Rutland -- where some Ira students attend school -- charging nonpayment of tuition, the AP reported.
Hewitt, who is married with two adult children, lives in a small raised ranch on about an acre of land, not much for the area, Slack said. She said that he grew up in the town and that his parents and one of his children still live there.
"I can't even imagine what the motive was," Slack said. "He doesn't look like a sneaky, bad person. He's kind of a nondescript, quiet man."