State Health Department CFO testifies before house committee: ‘I’ve never seen anything like this’

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OKLAHOMA CITY - Amid allegations of financial mismanagement at the state health department, the agency's chief financial officer appeared before a special house investigative committee Friday detailing a timeline of when financial irregularities were discovered and lengths to which leadership went to mislead others about the problems.

"If these kinds of things were going on, people would be fired or thrown out in a day," said Mike Romero, who took over as the Oklahoma State Department of Health's chief financial officer in April of last year. "I've never seen anything like this."

Not long after he started, Romero said he began to ask questions of finance staff as to why board of health briefs were limited in financial content and heavy on program narratives.

Romero said he was able to determine, based on aggregating available financial documents, that the agency was nearly $30 million in the hole and that he received notification that a federal HIV/AIDS fund (Ryan White Fund) was depleted. Romero said he notified then Senior Deputy Commissioner Julie Cox-Kain and Commissioner Terry Cline about the payroll and Ryan White Fund issues, who said they would form an incident command.

"We've got a person that's not a finance person that's going to run incident command, and we're going to be in this group where everybody's going to be nervous about what they're supposed to say," said Romero. "The whole thing, from beginning to end, reminded me of various oppressive, totalitarian regimes in other parts of the world that have nothing to do with this country or the way that we operate with respect to our responsibility to the public and these funds."

"Did you feel there was a culture of silence to cover up in the Department?" Rep. Elise Hall, R-Oklahoma City, asked Romero.

"Absolutely."

From the beginning of his tenure, Romero said he found agency practices odd and was concerned leadership wasn't taking his reports and the financial situation seriously. Romero detailed a timeline of what he found out about the agency's fiscal health, when and who he spoke with -- and ultimately -- what was and wasn't done about his alarms being raised, and when.

"OSDH agency is insolvent and can barely make its bi-weekly agency payroll," Romero read from a statement provided to the state auditor's office as it was conducting its own annual audit, after learning of new information about the agency's finances and calling for others to get involved. "OSDH agency shows negative trends, other indications of possible financial difficulties; inability to continue to meet its obligations as they become due without additional cash infusion, outside the ordinary course of business."

For more than three hours, Romero testified state representatives investigating the circumstances that led to the state sending $30 million in supplemental funding to the agency last fall.

Romero said he eventually realized payroll was being fronted with restricted funds -- basically using a fund as a line of credit.

The OSDH released a "Corrective Action Report" last week to the legislature, detailing the problems it is facing and how it plans to address them. The report, and house investigation, runs alongside state and federal investigations looking in to the financial issues plaguing the agency.