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A lack of management oversight led to a number of financial challenges for Montana State Parks as the division became increasingly isolated from Montana Fish, Wildlife & Parks over the past decade, according to an audit by the Montana Legislative Audit Division.

Auditors presented a performance audit of State Parks to a legislative committee late last month. The audit looks systemically at the parks division and makes recommendations on how to improve processes and comply with state guidelines.

Lawmakers ordered an audit after State Parks came under scrutiny from lawmakers and the media last year, following reports that millions of dollars that could have gone to the state’s 55 parks went unspent.

FWP has accounted for how the parks division amassed more than $11 million – seeking funding from outside its budget for capital expenditures as well as not allocating funds it could have – but the reasons why former employees made those decisions have not been publicly disclosed.

Parks has seen a number of major changes in the last 18 months, including dismissals of the former parks administrator and Montana State Parks and Recreation Board chairman, the convening of a new board, as well as the hiring of a new administrator and FWP director, both of whom have advocated raising the profile of parks.

FWP officials and board members have been vocal about systematic changes in the management of State Parks aimed at centralizing financial oversight and improving culture. Gov. Steve Bullock has also convened the Parks in Focus Committee to examine the parks system and potential ways of bringing in more funding.

“I do think the Legislative Audit Division did a good, thorough job and I do think it was a good process,” said FWP Director Martha Williams. “It was helpful for us to demonstrate as an agency how we’re responding and improving where we can.”

Auditors identified several organizational changes at FWP over the past decade that cumulatively appeared to distance State Parks from other divisions in the agency.

Those changes included reorganizations, moving oversight of fishing access sites from parks to fisheries, separate websites and formation of the separate parks board in 2013. Auditors also analyzed one much-discussed theory of whether State Parks officials were pushing to move parks out of FWP.

“We found little hard evidence within department records, files, and decisions that (parks) division leadership was incrementally severing ties with the rest of the department in a concerted or sustained effort to pave the way for the division to leave FWP. However, this theory was widespread and broadly aired in interviews across FWP. Several staff members indicated that division leadership spent much of the last decade laying the groundwork to leave FWP and either become a stand-alone entity or become part of another executive branch department,” the audit says.

Legislation to remove parks or give it additional autonomy within FWP has come up in recent sessions.

The audit recommends better communication and collaboration to reintegrate State Parks and heal any friction between divisions.

The audit devotes significant space to state parks’ ending fund balance. As the division talked publicly about challenges from a more than $22 million maintenance backlog against a roughly $9 million budget, its bank account had grown to $11 million. While some of those funds were retained for fiscal stability, much had gone unspent, drawing the attention of the Legislature and the public.

FWP has said and the audit verified that starting in about 2012, state parks stopped requesting legislative authority to spend its funding on capital projects, instead unsuccessfully seeking general funds. The division also did not spend funding it could have for maintenance and operations.

“Questions arose throughout fieldwork as to how this balance grew unbeknownst to the director’s office or other department officials,” the audit says. “Our audit work determined an ongoing lack of department oversight of the Parks Division budget resulted in the fund balance going unnoticed.”

That oversight included an assumption that FWP divisions were spending their budgets in full.

“Leadership within the Parks Division were long-tenured employees and were considered trusted and competent at running the division and its budget, so little attention was paid to this part of the department’s budget,” auditors wrote.

The negative publicity from State Parks’ finances did not go unnoticed by field staff.

“A negative effect on morale was felt across the Parks Division, particularly in regions and individual parks across the state. Multiple regional parks managers told us they found it inexplicable and demoralizing that they were making budget cuts to individual parks, and delaying necessary capital and maintenance expenditures, while the Parks Division balance was growing in Helena with money that could have been spent in the field,” the audit says.

The audit also looks at the role of the parks board and concludes that its authority is unclear. That lack of clarity has led to the board voting in the past on things like grant awards it did not have legal authority to oversee.

The audit makes several recommendations to improve communication, provide additional financial oversight and transparency, and better define the role of the parks board.

FWP concurred with all of the audit’s recommendations, saying it has prioritized steps to better oversee agency finances and is looking to an improved future for the agency and the board.

“As far as the audit, I think it did a great job of really hitting on some ongoing issues and questions about State Parks,” said Angie Grove, chair of the parks board. “It looked at some areas where the past board was involved without statutory authority and where we want this board to focus. It’s a useful tool for us to use to target the improvements we need.”

Grove says she sees a lot of positive energy around State Parks and that the public has become more aware of the issues facing the parks system.

Sen. Chas Vincent, R-Libby, chairs the Environmental Quality Council that oversees FWP during the legislative interim. The council has taken up the parks issue and he agrees that some positive strides have been made.

“I do believe a lot of internal steps are being taken … and they have every intention of addressing each point in the audit,” he said.

The public may never get a full accounting of what happened with State Parks’ finances, Vincent said. That may in part be due to employee privacy concerns, some of which are bound by a court settlement -- FWP settled with the former State Parks administrator in response to a grievance.

Williams says she is hopeful that the attention paid to State Parks has created some energy behind it. The parks system still faces major maintenance needs and a lack of money to pay for it. While the Legislature authorized spending the $11 million ending fund balance, $4 million was diverted outside the agency to other projects.

“The financial picture for parks remains a real barrier to providing the kind of service we’d like to provide,” she said. “What has become clear to me, and the Parks in Focus Commission and the Parks and Recreation Board, is how extraordinary the parks staff has been at cobbling together really great service. It’s become clear that the budget is really slim and if we really want to provide that next level of service, it can’t just be all these cultural and administrative pieces; the next step is really the funding.”

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Reporter Tom Kuglin can be reached at 447-4076 @IR_TomKuglin

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