Conroe, September 10 – The citizens of Montgomery County had the opportunity to witness first-hand in open view one of the fundamental problems with the manner in which Montgomery County Auditor Phyllis Martin does her job during the August 28, 2018, meeting of the Commissioners Court. Rather than staying outside of County politics, policy, and operations, as auditing standards require of an internal auditor such as the County Auditor, Martin does to the other extreme and purposefully injects herself into the political process as though she were a sixth member of the Commissioners Court.
Under the County Judge’s portion of the agenda for the August 28 meeting, there was an item to discuss how the Commissioners Court should allocate the remaining funds from the issued portion of the November, 2015, road bonds. There are already $28 million of committed projects among the four County Commissioners for their respective Commissioners Precincts but not all of the $280 million of road bonds have yet issued and sold for the money to be available for spending on the approximately $50 million in remaining projects.
Precinct 4 County Commissioner Jim Clark discussed how the citizens intended the allocation of the road bonds to occur when they approved the referendum in November, 2015. County Judge Craig Doyal generally agreed with Clark’s concerns and echoed the need to adhere to the voter-approved allocation.
Martin, however, injected herself into a discussion among the five members of the Commissioners Court and actually went so far as to suggest a specific policy for the allocation of approximately $20 million in funds. “So in the meantime what if we did, there’s $28 million, let’s round to 30 to make the math easier, we could allocate to three commissioners, 6, 6, and 7.”
Clark and Precinct 1 County Commissioner Mike Meador both quickly objected to Martin’s proposal.
Noack and Clark then discussed the current allocation of funds among the road projects already let. Martin interjected, “Some projects go quicker than others.”
Rather than following Martin’s policy suggestion for allocation of the road bond funds, Precinct 3 County Commissioner James Noack said, “We should pay for projects as the projects are let…instead of dividing it by Commissioner” in order ultimately to reach the allocation of the voters under the road bond referendum. The remainder of the Commissioners Court, other than Martin, of course, then agreed with Noack’s suggestion.
Martin’s inappropriate injection of herself into this discussion of policy among the County Commissioners is an example of two fundamental problems with her conduct as the Montgomery County Auditor. Clearly, Martin does not have the ethical training nor does she follow the ethical standards of a Certified Public Accountant, because she is not a CPA. In fact, Montgomery County, the eleventh largest county in population in Texas, is the largest County which does not have a CPA as the County Auditor. All ten of the top ten largest counties have CPAs in the position of County Auditor.
In their August 3, 2018, External Quality Assessment of Martin’s County Auditor’s Office, the independent accounting firm of Postlethwaite & Netterville found that, as to “Impairment to independence or objectivity,” Martin and her Auditor’s Office only “partially conforms” to the internal auditing standards of the International Standards for the Professional Practice of Auditing. The report was highly critical of Martin in a number of areas where her office either “partially conforms” or “does not conform” to auditing standards.
Similarly, Martin does not follow the Generally Accepted Auditing Standards (“GAAS”) for government auditing of the United States General Accountability Office. A major violation by Martin of the GAAS is Martin’s almost constant involvement in matters of politics and policy. A huge example of Martin’s involvement in politics was her lobbying, in private meetings with Montgomery County Judge Craig Doyal during the month of August, 2018, for the Montgomery County government to spend $14.8 million on an Enterprise Resource Planning (“ERP”) system that goes far beyond financial and accounting services. Martin lobbied the Commissioners Court to ensure that a majority of the Court would support the ERP rather than looking at lower cost alternatives. Ultimately, the Commissioners Court approved the ERP contract – without any actual review of the language of the contract, the costs, or the benefits, on August 28 as well by a 3 to 2 vote, with Noack and Clark voting “no.”