Texas Funeral Service Commission reports staffing, IT and donor-program changes and says state auditor is investigating former anatomical board funds

The Texas Funeral Service Commission on Dec. 17 told commissioners it has expanded staff, begun IT modernization and asked the State Auditor's Office to investigate potential financial irregularities tied to the transition of responsibilities from the State Anatomical Board.

"The Funeral Squad has achieved notable progress this quarter, advancing modernization efforts, strengthening regulatory oversight, and adapting to the evolving needs of our stakeholders," Executive Director Scott Bingaman said, summarizing the agency's work since the commission absorbed anatomical-board responsibilities in September. He said the agency has hired a deputy executive director and new legal and investigative staff and is developing a payments system that will direct funds to the Texas comptroller rather than to a third-party bank.

Why it matters: the agency now oversees functions formerly run by the State Anatomical Board, including collection and accounting of certain fees. Bingaman told the commission the agency found indications that the former board used an unapproved third-party payment processor and that some funds collected during the transition were routed to a nonstate bank account. The commission has asked the State Auditor's Office to open an investigation and is collecting documentation for that review.

Bingaman said the agency received a series of handwritten checks during the transition period, including a roughly $700,000 check, a roughly $94,000 check and a smaller $900 check; those checks, together with legislative appropriations, brought total funds related to the transition period to near $1 million. He cautioned that exact totals and spending are still being established and said the State Auditor's Office is evaluating whether the facts meet its threshold for a formal audit or investigation.

Commissioners pressed staff about whether the agency can be confident it has recovered all funds. Bingaman responded that staff have pursued bank records and communications but that cooperation from some former Anatomical Board actors has been limited; he said the commission has requested SAO assistance and that the SAO has not yet completed its review.

Operational updates and staffing

Bingaman said the agency has filled several priority positions since September, including Deputy Executive Director Laura Reinhart and Staff Attorney Sarah Sanders, and has hired two new investigators who will begin Jan. 13: a former detective and a former funeral director. Reinhart told the commission the agency now has 15 employees, 14 full time and one part time, and that staffing will expand after the legislative session.

IT, payments and reports

Bingaman described ongoing IT changes: migration of payment services to texas.gov and a new data-center arrangement through the Department of Information Resources (DIR) to replace the Health Professions Council's support. He said the agency is building an electronic payment system intended to send funds directly to the comptroller and to reduce reliance on third-party processors.

On finance, Bingaman reported a modest budget surplus of about $24,000 at fiscal close; those lapsed funds were returned to the comptroller. He said the agency will conduct a market-fee analysis to align fees with costs and has submitted a range of statutorily required reports, including an early annual financial report and a Sunset implementation briefing.

Will-body donor program and enforcement

Staff reported the will-body donor program is now reflected in licensing and revenue reports. The enforcement group will expand and pursue casework more quickly, the commission was told: the legal team reported 30 notices of complaint were issued in the quarter and that 16 cases were closed in this period.

Public comment and industry reaction

During public comment, Baytown Memorial Funeral Home owner Desiree Wilson asked the commission, "I'm here today asking again for the reinstatement of my license," and described the business impact of operating without a license. Dr. Gilbert, an associate dean at Texas Tech University Health Science Center, told the commission that "recent news... has been disheartening" and urged clearer statute and improved commission-legislature communication on anatomical matters.

Next steps

Bingaman said the agency will continue to cooperate with the State Auditor's Office, pursue records, refine its payment and IT systems, and seek legislative support for additional staff and fee changes during the upcoming session. He recommended continued outreach to university partners and stakeholders as the commission addresses the transition's legacy issues.