A reported cash crisis at the Oklahoma State Department of Health that led to job cuts and an emergency injection of $30 million was more of a mirage than the real thing, a months-long grand jury investigation and audit found in separate reports released Thursday.
The state’s multicounty grand jury didn’t hand up any criminal indictments, but it did fault former top officials at the health department for creating a “slush fund” to pay for pet projects and years of financial mismanagement.
The grand jury said no federal or state money was embezzled and it didn’t uncover evidence that any former managers at the agency personally benefited from the activities.
“There are no winners as a result of this exhaustive investigation – only losers,” the grand jury concluded in its report.
“Senior leadership, who no doubt wanted only the best for public health in Oklahoma, resigned in disgrace due to their mismanagement of a state agency on a public stage. Taxpayers have lost trust in their state government for letting this crisis develop and for compounding it with wasted tax dollars and unnecessary layoffs.”
Mismanagement allegations at the health department first publicly surfaced in September as the agency announced furloughs and cuts to contracts just months into the new fiscal year. By late October, Health Commissioner Terry Cline and his top deputy, Julie Cox-Kain, had resigned along with Felesha Scanlan, business planning director.
Grand Jury Findings Include
“The Department of Health was never insolvent. The department had ample cash to pay all of its expenses, including payroll, through the end of the fiscal year … The emergency supplementary appropriation was unnecessary and remains unspent in the department’s fund balances.”
“The Department of Health, through manipulation of federal and state funds, maintained a ‘slush fund’ that allowed the department to overspent without consequence.”
“The Department’s reduction in force (RIF), which eliminated the jobs of 198 Oklahomans, was unnecessary. The Department had sufficient money, both budgeted and in its slush fund, to pay for these positions.”
“Annual budgets submitted to the Legislature and OMES (Oklahoma Office of Management and Enterprise Services) had no basis in reality; federal dollars received and spent were routinely overstated by tens of millions of dollars.”
“The Oklahoma State Board of Health failed to provide proper oversight.”
“The multicounty grand jury finds reprehensible the inept practices and processes conducted by the Department of Health before and after the alleged crisis came to light.”
The health department wouldn’t comment on the grand jury report or the investigative audit until officials had a chance to review both reports, spokesman Tony Sellars said.
A new law, House Bill 3036, makes the health commissioner a direct appointee of the governor. It also strips power from the Board of Health and makes it an advisory body. The board has nine members who serve for nine-year terms. They are appointed by the governor and confirmed by the Senate. The new law takes effect in January.
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