STORY CORRECTED: An earlier version of this story incorrectly stated that the grand jury named Robert Graf among the attendees of breakfast meetings that may have violated the state's Sunshine Act.

Montgomery County commissioners fired their chief attorney Wednesday and promised a review of all county departments in response to a scathing grand jury report and the arrest of their former chairman, James R. Matthews.

Commissioners Joseph M. Hoeffel III, a Democrat, and Bruce L. Castor Jr., a Republican, told a capacity crowd the county's top administrators would review all allegations and make recommendations for reforms next week.

They spoke at their first public meeting since Matthews was taken into custody Tuesday on perjury charges.

But despite a vow to serve out his term as a regular voting member of the board, Matthews, a Republican, did not attend Wednesday's meeting.

Matthews declined to comment when contacted at his business, Keegan Mortgage, saying his attorney was seeking a gag order in the case.

"Yesterday was a sad day for Montgomery County, but today is a new day," said Hoeffel, who was named chairman Wednesday in Matthews' stead. "The county commissioners recognize the need to refocus on the important work of government ahead."

Whether that future should include Matthews, the two remaining commissioners declined to say.

"That's a decision he has to make on his own," said Castor, who has made no secret of his contempt for Matthews since the latter teamed up with Hoeffel in 2007 to edge Castor out of government control.

"If I were to suggest what [Matthews] should do, he might just do the opposite to spite me," Castor said.

Prosecutors allege Matthews lied in October to a grand jury investigating public corruption about his previous relationship with a Fort Washington title company that received contracts for government work. He has denied the charges and characterized the investigation as a political witch-hunt.

But the 69-page grand jury report unsealed Tuesday went further - painting an unflattering portrait of the government of Pennsylvania's third-largest county. Too often, it said, Montgomery County officials and civil servants ignored their own procurement policies, recklessly spent taxpayer money, and rewarded political cronies with plum positions for which they were unqualified.

While Matthews was steering the ship, a handful of other county employees - including Solicitor Barry Miller - were caught in the grand jury's dragnet. None, other than Matthews, faces criminal charges.

Miller served as Matthews' campaign manager during the 2007 race. Castor has said his refusal to support Miller's appointment as solicitor led to Matthews' forming his controversial alliance with Hoeffel.

But according to the grand jury report, Miller often operated as an enforcer, making sure county employees made decisions on contracts in line with Matthews' will.

In one example the panel cited, Miller purportedly told a committee assigned to review bids that the Ohio firm CBIZ needed to be awarded a contract to regulate health insurance for county personnel.

CBIZ donated thousands of dollars to Matthews' 2007 candidacy - contributions Miller collected in his role with the campaign.

In light of those allegations, firing Miller was the only acceptable choice, Hoeffel said Wednesday. He and Castor appointed James W. Maza, formerly the county's deputy chief operating officer, to replace him.

Miller did not respond to calls for comment.

The commissioners declined to specifically discuss the future of other county employees mentioned in the grand jury report.

The panel declared human resources director Eleanor Schneider "not qualified for a position of such importance" based on her purported inability to answer questions about the CBIZ contract or what exactly the company did for the county during her testimony.

Schneider, formerly Matthews' personal secretary, was named to her position despite not having any human-resources experience.

Tom Snyder, head of the county department that handles bids for outside services, also had trouble with the grand jury's questions, according to the report.

He allegedly had little knowledge of how often companies applying for county work were asked about potential conflicts of interests, whether their answers were verified, or what happened to those that reported potential conflicts, the panel said.

"On several occasions he exhibited willful blindness and incompetence," it wrote.

Schneider and Snyder could not be reached for comment.

Hoeffel, too, came under grand jury criticism for participating in a series of private breakfast meetings in which he and Matthews discussed county business with Miller and Maza. Castor was never invited.

Hoeffel and Matthews have insisted those meetings were not a violation of the state open-meetings law because they did not deliberate or decide how they would vote on the issues. The grand jury declined to file charges against either man stemming from those breakfasts.

But despite the pallor hanging over Wednesday's proceedings, the grand jury allegations were not the main draw for the hundreds who filled a courtroom and an overflow room in the county administration building.

The meeting coincided with a public hearing on the county's proposed $389 million budget, which calls for stiff cuts in funding for the community college, parks department, and planning commission.

Contact staff writer Jeremy Roebuck at 267-564-5218, jroebuck@phillynews.com, or @inqmontco on Twitter.