Auditor testifies that state officials knew of health department financial mismanagement

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OKLAHOMA CITY - Lawmakers spent more than two hours questioning the state’s auditor and inspector amid an ongoing investigation into the health department’s finances.

State auditor Gary Jones appeared before a special House committee on Thursday morning. The committee has been tasked with investigating apparent financial mismanagement at the Oklahoma State Department of Health.

An audit was announced in October following the resignations of former commissioner Dr. Terry Cline and senior deputy commissioner Julie Cox-Kain.

On Monday, three top state officials were questioned: acting OSDH commissioner Preston Doerflinger, acting Office of Management and Services director Denise Northrup, and Governor Mary Fallin's chief of staff, Chris Benge.

All three officials testified they were unaware of the significant financial issues the agency was facing until October. Northrup told the committee she knew the agency needed more money months ago but it wasn't until October 27 that OMES met with state health department officials about the gravity of the situation.

During Thursday’s hearing, Jones told the committee he met with Doerflinger on Sept. 7 regarding OSDH’s financial concerns. They had briefly texted about concerns the week prior.

“This is the first time ever in seven years that we had felt something had risen to a level that it needed to be reported immediately,” Jones told reporters Thursday. “At that particular point in time, I was very emphatic on the fact that the people within the organization were saying this.”

According to Jones, an intentional overspending was part of the problem.

"On a $400 million budget, if you overspend by 1,25%...it's $5 million dollars," he told the panel Thursday. "You do that over a 6 year period, that's $30 million."

Doerflinger admitted there were conversations with Jones earlier this fall but maintained he was not aware of the significant problems until the late October meeting.

“That is when I became aware of the crisis at hand. Gary said there were problems or issues at the state department of health. I became aware of the gravity of the situation as I described in my testimony yesterday in front of the investigative committee,” Doerflinger said Tuesday.

Committee Chair Rep. Josh Cockroft, R-Wanette noted the apparent lapse in timelines.

“I think the executive branch knew before what they’re saying they knew,” Cockroft said. “The reason that’s significant is because, when we look at the timeline, it plays directly into special session the first time around, and we’re concerned that as we ask questions of who knew what/when that had a direct correlation on the discussions we were having.”

In response to Thursday's hearing, Governor Mary Fallin's released a statement saying the testimony supported Benge's statements on Monday.

Moving forward, Cockcroft said it’s unclear who they may bring in for questioning as the legislature is scheduled to begin its second special session on Dec. 18.​