The owners, however, said the nightclub was properly permitted and had been inspected by the fire marshal.
The city's mayor, Cezar Schirmer, said the fire department "has always done a very strict surveillance on the homes of shows and dealt with all other issues that relate to security of these places."
On Monday, the first of Brazil's three days of mourning, flowers were left outside the club in tribute to the victims, and a flag outside the country's presidential palace flew at half-staff.
In Santa Maria, mourners lined up in a series of funeral processions, and coffins were lined up in a gymnasium that authorities had turned into a morgue.
By noon, 40 of 110 funerals planned for the day had been held at the city's municipal cemetery, its chief of staff told Band News.
At one funeral, air force troops fired rifles in tribute to a comrade who died in Sunday's fire.
At another, two teenage brothers, the only children in one family, were buried side by side.
Of the people who were hurt, 82 were still in area hospitals; 40 were taken four hours east to the city Porto Alegre, BandNews TV reported.
The governor of Rio de Janeiro sent 15 mechanical ventilators, Agencia Brasil reported.