FBI now joins health department probe as finger pointing over blame continues

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OKLAHOMA CITY - The State Finance Director and Interim Commissioner of the Health Department, Preston Doerflinger, got into a war of words with State Auditor Gary Jones on Tuesday afternoon as the two pointed fingers over who’s to blame for the mess at the Oklahoma State Department of  Health.

Attorney General Mike Hunter announced on Tuesday the FBI and US Department of Health and Human Services were joining the investigation into mismanagement of funds at the state health department.

"Other than noting there are federal funds that flow into the health department, we’ll be collaborating with them to ensure that whatever we need to look at will be looked at thoroughly and with a level of detail that is merited by the magnitude of the problems," Hunter said Tuesday.

"We’re going to follow the evidence wherever it leads, wherever it takes us."

Meanwhile, Deborah Nichols testified before the special house committee investigating the health department finances.

"I honestly don't think they understood the consequences of what they were doing," the former COO of the Oklahoma Health Department testified.

Nichols was the chief operating officer for the department for approximately two years.

She resigned in November.

She said she immediately noticed a problem when she had to halt a remodeling project.

"The project is stopped. They don't have the $8 million. You don't not know that you don't have $8 million. You either have it or you don't have it," Nichols said.

She said, by June of this year, she began to understand the full magnitude of the problem but no one would listen.

"I can tell you we are deeply frustrated at this point. We feel like we are sitting on a financial time bomb. And, it's been months, and we feel like we have told everybody that we can tell,” she said.

Nichols said it was a classic example of robbing Peter to pay Paul, even using federal funds to make payroll.

But, she said she doesn’t think it was deliberate mismanagement.

"The folks that were leading this agency, you know, are not villains. They're goodhearted people that had public health at their interest. The problem is they were really bad business people," Nichols testified.

Also Tuesday afternoon, a war of words between Doerflinger and Jones.

Doerflinger called a press conference to show the media a document he said was delivered to Jones on August 1 by the CFO of the state health department outlining his concerns about their finances.

Jones said he had to verify the information in the document before alerting anyone else, and he said Doerflinger’s office failed to take swift action once they were notified.

"It is baffling to me that this information was received August 1 and nothing was done with it at that time. Nobody was informed by the state auditor's office about this situation as it was presented to them on that day," Doerflinger said.

"We had to verify that the information was indeed correct that it was going to cause eminent damage to the state of Oklahoma, that it was not something that could be fixed after we did our audit report and that we had to breach our normal audit standards and go to the responsible party and notify them,” Jones said.

Doerflinger posted on Facebook on Sunday night calling for Jones to resign as the state auditor and drop out of the race for governor.

He has since deleted the post and account where it was posted.

Jones said Doerflinger is turning this into a political fight.

But, both agree they want to get to the bottom of the financial mismanagement and how it can be avoided at state agencies in the future.

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