Montana settlements to state employees this year have surpassed $336,000, according to legislative auditors.

In a memo to Senate Majority Leader Fred Thomas, legislative auditors report that a sharp spike in reported settlements continues. And, there are likely more payouts than what auditors could find. Thomas, a Stevensville Republican, asked for the tabulation in advance of a full performance audit of state employee termination settlements that is expected later this year.

“It’s a big concern, to me, what’s going on in state government,” Thomas said. “It looks like there’s a bunch of settlements going and they need to be brought to the light.”

Concerns about state settlements with public employees became a campaign issue after the 2012 governor’s race, Thomas said. State employees who supported GOP gubernatorial candidate Rick Hill suggested they were being edged out. Nothing became of those allegations, Thomas said, but Republican lawmakers started scrutinizing state payouts to departing employees including ones that made the news.

Legislative auditors in 2016 found that the Department of Livestock had illegally paid $204,000 to its former executive director Christian MacKay, who had resigned as the department fell into financial turmoil. The Livestock Board had used livestock enforcement money to pay for the settlement.

The settlement angered livestock workers who lost their jobs over a $300,000 budget deficit created during MacKay’s tenure.

In 2017, Montana Fish, Wildlife and Parks paid a $137,500 settlement to former State Parks Administrator Chas Van Genderen. The state initially refused to disclose the amount of the settlement, saying the details were private. After talks with an attorney for Lee Montana, the state disclosed the settlement terms.

However, Montana’s Supreme Court has repeatedly concluded that the public has a right to know about the settlements its government makes.

If the settlement terms are always private, then the public never knows why government agencies, funded by the public, are having to pay taxpayer money to departing employees.

Legislative auditors identified 51 unique settlements totaling $1.1 million over the past six budget years. The memo to Thomas also suggested a meteoric rise in total settlement expenditures, from $45,000 in 2011 to $875,226 in budget year 2017. Auditors also noted that they didn’t have a full accounting of the number of settlements or what was paid.

That “spike” in settlement amounts reported in the memo is due to a change in accounting, said state Budget Director Dan Villa. In 2013, the Department of Administration created a new account for paying out settlements, partly because of the scrutiny by Thomas and others.

Administration officials recognized that state departments weren’t paying out settlements consistently in the same way. Consequently, it was difficult to tell what was being paid out. The department tried to make government information more transparent, starting with a better website, Villa said.

“As we were going through the work that established that, we realized there was a tremendous amount of inconsistency in the way departments were reporting settlements,” Villa said.

The reporting still isn’t perfect, the budget director conceded, but it’s better. Villa, who worked for Gov. Brian Schweitzer before current Gov. Steve Bullock took office, said he hasn’t seen the significant increase in settlements suggested by the legislative audit report. There have been increases in some years because the state eliminated jobs. 

Legislative Auditor Angus Maciver cautioned against reading too much into the memorandum to Thomas. The report looks at a slice of state government and isn’t comprehensive. Still, the memorandum hints that there are more settlements to be disclosed.

The Department of Risk Management and Tort Defense Division reported 15 employment-related settlements between budget years 2013 and 2016, but did not disclose what was paid out.