Montenegro Launches Urgent Inquiry into Hobbs for ‘Severe Fiscal Mismanagement’

By Matthew Holloway |

Arizona House Republicans announced on Monday that the Department of Child Safety’s (DCS) Congregate Care program faces imminent bankruptcy, prompting the formation of a House Ad Hoc Committee to probe the fiscal mismanagement under Democrat Governor Katie Hobbs.

House Speaker Steve Montenegro, alongside other Republican leaders, criticized the governor’s handling of state finances. “This is not a simple oversight—it is gross financial mismanagement at the highest level,” Montenegro stated. He emphasized the severe consequences that her actions could have on Arizona’s vulnerable children: “Governor Hobbs has made a habit of overspending, ignoring reality, and then sounding the alarm only when disaster strikes.”

Montenegro pointed to a concerning pattern of fiscal instability. “Congregate Care is set to go bankrupt next week. The Governor’s mismanaged Developmental Disabilities program will collapse by the end of April. Her administration has failed to budget for formula growth in AHCCCS for two consecutive years, resulting in hundreds of millions in unaccounted costs,” he added.

He asserted that the public did not elect lawmakers to stand idly by in the face of crises exacerbated by the governor. “House Republicans will ensure accountability and enforce responsible budgeting,” he stated. He also called for Governor Hobbs to accept responsibility: a critical step would involve her staff cooperating with the Legislature to understand the full scope of the mismanagement.

Earlier reports from AZ Free News indicated that Treasurer Kimberly Yee had expressed concerns over the Hobbs administration’s financial practices in a letter to Rep. David Livingston, Chairman of the Arizona House Appropriations Committee. In response, Livingston remarked, “I appreciate Treasurer Yee’s clarity in addressing the financial mess Governor Hobbs has created. The issue isn’t ‘missing money’—it’s blatant mismanagement.”

He added, “Under the Governor’s feckless leadership, state agencies are making massive spending decisions without legislative oversight, inflating costs, and expecting taxpayers to cover the consequences. This kind of incompetence cannot stand.”

The newly formed House Ad Hoc Committee on Executive Budget Mismanagement will investigate how the governor has handled financial matters, often resulting in vital services nearing collapse. Montenegro urged the Chairman of the Joint Legislative Budget Committee to convene and require Governor Hobbs to allocate existing funds strategically to avert damage to children in DCS custody. “The Governor’s administration failed to spend wisely, and it is their responsibility to fix this situation—not the Legislature’s job to bail them out,” he concluded.

Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.