Health Department Woes Enlarge State Budget Crisis

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Oklahoma lawmakers are being asked to approve $30 million in additional funding to help pay employees at the Oklahoma State Department of Health and stop the agency’s cash crunch, the interim health commissioner said Monday.

That amount is on top of the $215 million needed to end a shortfall at three other state health agencies – a challenge that has led to a stalemate in the current special legislative session.

Interim Commissioner Preston Doerflinger said Monday his initial assessment since taking over the state health department last week shows that since 2011, money has been moved around internally to cover shortfalls and present a balanced budget to lawmakers and state budget officials at the Office of Management and Enterprise Services.

Doerflinger said the health department used an “intricate system” of strategies that included splitting costs across funds, borrowing against restricted funds and keeping accounting periods open for multiple years.

“These actions were taking place in order for the agency to pursue various and costly programs beyond the agency’s core public health initiatives,” Doerflinger said at a news conference at the Cleveland County Health Department. The practices went undetected by OMES because the budgets submitted by the health department appeared to be balanced, he said.

The state could take the $30 million needed for the health department from a special cash fund but would need approval from the legislature and governor.

Doerflinger said if a supplemental appropriation isn’t approved, the agency will have no choice but to cut public health services. He didn’t rule out job reductions, but backed away from the 250 jobs mentioned last month by health department leaders who since have resigned, including former Commissioner Terry Cline and Senior Deputy Commissioner Julie Cox-Kain.

“This situation, as I shared with the employees, is not insurmountable,” Doerflinger said. “We will fix these issues. We have a corrective plan of action that we have shared with both House and Senate leadership this morning, as well as the governor’s office.”

Meanwhile, Gov. Mary Fallin on Monday signed an executive order to create the Joint Commission on Public Health to look at how the state delivers public health services. The effort will be headed by Gary Cox, executive director of the Oklahoma City-County Health Department. She also said she would decide soon whether to amend the special session to include the need for the additional $30 million.

House Speaker Charles McCall, R-Atoka, said he plans to form a special legislative investigative committee to look into the “mishandling of funds” at the state health department. McCall said he will name members of the bipartisan committee in the next few days.

“We will be looking at what happened to this money, where it went (and) transfers of money between agencies to get a better handle of what happened to this money that we appropriated over the last few years,” McCall said. “It’s very important in knowing this information before we move into further appropriation (for fiscal year 2019) in the next regular session this February.”

Here are some answers to additional questions about the health department’s financial crisis:

Q: Is there a criminal investigation into what went wrong at the health department?

A: Officials haven’t disclosed any active criminal investigation. Doerflinger said Monday that commenting on a criminal matter was beyond his responsibility as interim health commissioner.

Q: Where does the audit by State Auditor and Inspector Gary Jones’ office stand?

A: Jones’ staff is working on a special audit requested by former health-department leaders. Last week, Attorney General Mike Hunter asked to reclassify the inquiry as a performance audit. Under state law, the attorney general has the discretion to keep such investigative audits confidential.

Doerflinger said Monday he also asked Jones’ office to perform a risk assessment of the health department, which will help identify areas for other performance audits.

Reporter Trevor Brown contributed to this story.