HELENA — A Montana state agency violated the law when it used livestock fees to pay part of a $204,000 settlement after its executive director resigned last year amid scrutiny over how money was being spent, the legislative auditor said.
A report to be presented Thursday to the Legislative Audit Committee says the settlement was not an appropriate use of Department of Livestock money reserved for enforcing livestock laws.
“A termination settlement payment is not an expense incurred as a result of enforcement of livestock laws,” the audit says.
The settlement with Christian Mackay included two years of salary at $84,260 a year, payment for unused personal days, and a $21,000 fee for his services during the transition to new leadership.
The first installment of the settlement totaled $120,034 and was paid just a few days after the department announced Mackay’s resignation on Sept. 21.
The payments struck a sour note among some workers because of layoffs and workforce adjustments nine months earlier due to a nearly $300,000 budget deficit.
The department acknowledged that the settlement was not specifically an enforcement expense but was part of the department’s cost to effectively run the agency.
“Dysfunction created with the department by issues stemming from the executive office that ultimately resulted in layoffs, furloughs and increased turnover threatened the future ability of the department to carry out is duties effectively and efficiently,” the department said in a written response to the auditor’s findings.
“The belief of the department is that the leadership change contributes to our ability to better enforce the livestock laws of the state,” it said.
The department’s new executive director, Mike Honeycutt, was hired in January and has attempted to boost agency morale by exploring pay increases. He also sought to take better control of the budgeting process.
“We’re looking into how we can get ourselves in a position where we can build some safety nets within our department,” Honeycutt said, “so that if we have some major glitch in revenue, we’re not forced to do furloughs, layoffs and very drastic actions.”
The department said it had no other way to pay for the termination agreement with Mackay, but the auditor said the department could have tapped its general fund, applied for contingency funding from the Governor’s Office or obtained a loan from other state agencies.
The department said it would consider those options to pay for the remaining $84,000 still owed on the settlement.
Ranchers and farmers are required to pay per capita fees for each head of livestock they own, including cattle, horses, pigs and sheep.