County Judge, Commissioners Court mismanagement results in loss of $17 million in benefit funds for Montgomery County government

Montgomery County Budget Director Amanda Carter seemed embarrassed during her presentation to the Commissioners Court on Tuesday, July 13, 2021, as she described the massive waste and mismanagement of the County government’s “internal service funds.”

The Golden Hammer Staff Reports

Conroe, July 14 – As a result of mismanagement and a complete failure to exercise proper oversight, Montgomery County Judge Mark Keough and the Montgomery County Commissioners Court presided over a loss of $17 million of “internal service funds” to support payment of benefits to current and former County government employees during the past three years. The failure and massive loss of funds to pay for County employee health insurance benefits, retirement benefits, property and casualty claims against the County government, and workers compensation claims, all of which the County government “self-insures” or self-funds, was unknown to Keough, the Commissioners, Budget Director Amanda Carter, or even County Auditor Rakesh Pandey, until Monday, May 17, 2021, when the Court held a special meeting to discuss the abrupt resignation of the County’s Risk Management Director Virginia Little.

Little, Keough, Pandey, Carter, and the Commissioners had mismanaged the massive self-insurance fund for several years and failed to notice that the fund, which totaled approximately $17 million at the beginning of calendar year 2018, had declined to a zero balance. During the May 17 Commissioners Court meeting, the Court secretly voted to take $6.7 million from the County government’s fund balance and put those funds into the benefits fund in order to keep that fund solvent.

The “internal service fund” had received payments from two sources: employee contributions and large matching contributions from the County government. Little, Keough, Pandey, and Carter had failed, however, to monitor the fact that claims on the internal service funds greatly exceeded the contributions for several years. Blame must, at least in part, also fall on the shoulders of fired former Montgomery County Auditor Phyllis Martin, who also had failed to observe the fund draw-down and to bring the major problem to the attention of the Commissioners Court.

Local taxpayers, who are already suffering mightily from Keough’s business and church shutdown orders during March, 2020, resulting in a 25% unemployment rate in this community, now will suffer more. Carter presented to the Commissioners Court several “options” how to shore up the “internal service fund.”

The Commissioners Court chose “option 6” which would fund the “internal service fund” fully during the upcoming Fiscal Year 2022 which would likely result in a 1.1063 cent per $100 valuation tax rate increase in order to raise the $5.4 million necessary to restore the depleted funds necessary to operate the County government’s employee benefits for one year.

Despite the havoc the County government caused to private taxpayers, who suffered job losses, massive reductions in income, and other economic harm during the illegal China Virus mandated shutdowns, County employees never lost one penny of wages or benefits. Rather, Keough and the Commissioners Court have even begun to contemplate the possibility that they will give an across-the-board raise to County government employees on the backs of the private sector taxpayers who continue to reel from the shutdowns.

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