Auditors say high staff turnover hurting Montana Department of Justice

An audit report presented to lawmakers on Thursday said high staff turnover at the state’s Department of Justice, which is overseen by Montana Attorney General Austin Knudsen, has led to a series of mistakes that could be solved by better controls.

Though some previous concerns have been raised about the number of attorneys that have cycled through the office since the former longtime Republican lawmaker took over the Attorney General’s Office in 2021, the finance compliance audit of Fiscal Years 2023 and 2024 raised concerns turnover was also high among the financial services staff, which oversees $184 million of revenue in motor vehicle license and permit revenue.

That turnover has led to errors and auditors found those years’ financial statements “continue to contain errors” and they said those “continue as a result of staff turnover in key positions.”

In fact, the report notes that while the Attorney General’s Office has undergone a number of reorganizations under Knudsen, the Centralized Services Division eliminated the Chief Financial Officer position. In addition to that, five of the eight positions in that division turned over in 2024, with the effects still reverberating in 2025, according to the audit report.

“Control deficiencies described in (four of the) recommendations are partially due to experience levels of current staff and a lack of use or documentation of internal controls,” the audit said.

The audit outlined how cash was misstated in various state accounts “due to inappropriate transfers and accrual errors. Those misstated totals varied from $4.5 million to $200,000 in three different funds during the course of three years. The audit report also noted that Knudsen’s office struggled with the same issues during the last audit period two years ago, and again four years ago.

The total amount of errors across all accounts was $21.9 million in accounting and transfer errors during the course of three years. The net result was an understated amount of cash in the general fund of $12.9 million during the course of that time, while cash in the state special revenue fund and the agency fund was overstated by $6.9 million and $1.3 million respectively.

While the Department of Justice agreed with the substance of the findings and vowed to improve internal controls, a Dec. 1 letter signed by Knudsen disputed the conclusions.

“We disagree that we did not have or do not have well-trained staff with strong institutional knowledge,” Knudsen wrote.

At a hearing before the Legislative Audit Committee, Chris Darragh, the lead auditor from the Legislative Audit Division, noted that the concerns about the financial audit came with an “umbrella” recommendation. Darragh told lawmakers that the problems with the financial audits all seemed to stem from the same two problems — inexperience of the staff and lack of properly written procedures.

“We’d suggest having a job map of what the responsibilities are,” Darragh said, as well as implementing more training.