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Audit of Oklahoma State Department of Health underway after commissioner resigns

OKLAHOMA CITY – An audit of the Oklahoma State Department of Health is now underway after the resignations of the commissioner and senior deputy commissioner.

Dr. Terry Cline and Julie Cox-Kain’s resignations were accepted at an emergency meeting for the Oklahoma State Department of Health board Monday night.

A statement released by the board read, in part, “The resignation of Commissioner Cline came on the heels of information received by the Board that OSDH is faced with an immediate financial loss predicated upon multiple years of over-expenditures and fiscal mismanagement.”

But, the state auditor said they were actually contacted back on September 28 by Cline requesting an audit of the agency.

"They have some concerns over the fact that maybe funds were used out of restricted funds that were used in an improper manner that they have a need to pay them back. They're concerned over whether they have enough money to pay their bills, to make payroll," said state auditor Gary Jones.

Jones said they have already begun the process of auditing the Oklahoma State Department of Health and figuring out the money trail.

Previously, the health department had said they were being forced to reduce agency spending due to a shortfall of more than $10 million.

"We've heard a lot of figures bantered around. I think that probably what we're looking at right now is probably a number higher than that," Jones said.

Jones said they will go through the accounting system; determine what money went where, if it was used improperly and who made the decisions.

He said they won’t know exactly what they’re dealing with until the audit is complete.

"It could be them in turn trying to balance their books by moving money from one account to another thinking that they can have the ability to pay it back at another time. It could be that there was fraud committed and somebody in turn took money and put it in their pockets," Jones said.

Jones said the resignations come at unusual time in the audit.

"Usually, we see resignations at the end of an audit, not the beginning of an audit," he said. "Once we start issuing our reports and once the information starts coming out, that's when we generally see the resignations or the indictments."

Jones said the audit will likely take until the end of February and will cost the state $100,000.

Preston Doerflinger, the director and secretary of Finance, Administration and Information Technology for the state, has been appointed the interim commissioner of the health department.

These are his answers to a list of questions we sent him about his new role and what happens now:

Q: Are buyouts and layoffs still being considered?
A: Nothing can be ruled out at this time.

Q: What is the first order of business?
A: Analyzing the fiscal situation and providing stability for the staff so they can continue to fulfill the mission of OSDH.

Q: Can you tell us if any fraud was involved in the resignation of Terry Cline?
A: Our focus is putting the OSDH on solid financial footing and protecting a core service of state government. The Auditor and Inspector will report his findings at a later date.

Q: What needs to be done to get the agency back on the right track?
A: I’m not going to pretend that this job is going to be easy. There is a lot of work ahead for me, my financial team and this agency, but my experience at DHS has prepared me to manage this situation and hit the ground running to start getting to the bottom of this problem.