State Health Commissioner Resigns Amid Allegations of Financial Mismanagement

State Health Commissioner Resigns Amid Allegations of Financial Mismanagement


In this Oct. 13, 2014, file photo, Oklahoma’s health commissioner, Dr. Terry Cline, right, speaks during a news conference in Oklahoma City. Cline has resigned as Oklahoma’s state health commissioner after the board accused him of mismanaging the health department’s finances. The board voted at an emergency meeting Monday, Oct. 30, 2017, to accept Cline’s resignation and appoint its finance secretary, Preston Doerflinger, as interim commissioner. (AP Photo/Sue Ogrocki, File)

Oklahoma State Health Commissioner Terry Cline and Senior Deputy Commissioner Julie Cox-Kain resigned last week following accusations of financial mismanagement within the Oklahoma State Department of Health (OSDH) by the state Board of Health.

The resignations of Cline and Cox-Kain were accepted at an emergency meeting convened last Monday by the Oklahoma State Board of Health. The meeting addressed information they received from an ongoing investigation by the state auditor that the department has been grappling with financial loss resulting from years of over-expenditure and fiscal mismanagement.

“OSDH is taking steps to address the problems head on and put OSDH back on sound financial footing. In addition to steps previously taken to address the shortfall, OSDH signed an engagement letter today for a special audit by the Oklahoma State Auditor and Inspector’s office to address the issues that have led to the current financial situation,” the Board said in a statement.

The department’s business planning director, Felesha Scanlan, also resigned in response to the investigation and the department also has confirmed that its general counsel Don Maisch was no longer employed there either.

Preston Doerflinger, the state’s secretary of finance, has been appointed to replace Cline as an interim director as the department handles the ongoing audit.

“The board takes these matters very seriously and is prepared to take all steps necessary to ensure that OSDH continues its important work in the area of public health,” said Board President Martha Burger.

The health department requested an audit in September to investigate a budget shortfall that has been ongoing since the start of Fiscal Year 2018. In a statement released at the end of September, Cline stated that the department was facing a budget gap of $10 million and that the agency would be forced to reduce spending.

Following Doerflinger’s appointment as interim health commissioner, the figure was revealed to be dramatically higher, amounting to a $30 million shortfall that could eventually see the agency unable to pay its employees.

“Mr. Doerflinger has been holding talks and meetings with managers and employees around the state as well as with the entire central office staff and during these meetings he has been discussing the challenges facing the department and what his plan is to address the current financial crisis,” said Health Department spokesman Tony Sellars.

Measures taken to offset the gap include the recent announcement to end funding for nine statewide child abuse prevention programs, as well as 25 health centers by Nov. 15. More than 1,500 employees are also currently being furloughed without pay one day per each two-week pay period to reduce expenses and the agency announced plans to lay off 12 percent of its work force early next year.

Doerflinger has said that he has spoken with legislators and is confident that they will approve additional funding before the situation reaches that point and Gov. Mary Fallin has promised to support the agency as it navigates its current situation.

“My office has enlisted the help of the fiscal staff of the Office of Management and Enterprise Services, the State Attorney General’s Office and the office of the state auditor and inspector to look into the matter to immediately investigate and bring forth clarity to the situation and offer solutions to ensure proper fiscal management of the State Health Department,” Fallin said. “It’s critical to restore confidence in the operations and delivery of public health services. We will work with every resource available to get the agency back on firm financial ground.”

On Nov. 2, Oklahoma State Attorney General Mike Hunter requested that the state auditor’s office conduct a performance audit on the agency, which could lead to criminal charges being filed depending on the audit’s findings.

Auditing state agencies as a way to hold administrations accountable for funding mismanagement during the state’s ongoing budget crisis has been a prominent point for Speaker of the House Charles McCall. McCall helped author House Bill 2311 during the 2017 legislative session, which went into effect Oct. 1 and calls for audits of state agencies every four years.

“The burden must be on the agencies to justify their programs and spending so we can ensure that those dollars are used first and foremost for the agency’s core missions,” said McCall, R-Atoka.

The state auditor’s office has said that the ongoing performance audit will likely not be completed until February 2018 and will cost the state $100,000.

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