OKLAHOMA CITY (AP) - A $30 million cash infusion from the Legislature will help pay vendors and fund the layoffs of nearly 200 people at the Oklahoma State Department of Health, but more systemic changes are needed to permanently stabilize the agency after years of financial mismanagement, the agency’s new leader told lawmakers on Monday.
Acting Oklahoma Health Commissioner Preston Doerflinger testified for more than two hours before a House investigative panel looking into the agency’s budget problems. A top aide and key financial adviser to Gov. Mary Fallin, Doerflinger was tapped to lead the agency after its top executives resigned amid its massive budget shortfall, which was revealed in October.
An audit of the agency’s finances are underway, the attorney general’s multicounty grand jury is investigating the situation and the Legislature appropriated $30 million during a special session to ensure the agency could make payroll and pay vendors, Doerflinger said.
Some of the $30 million will be used to give the laid-off department employees a cash payment equal to 18 months of health insurance premiums, a requirement that Doerflinger said lawmakers should reconsider. He said it is especially difficult for an agency in a financial crisis like the health department to find the cash to make those payments.
The rest of the money will be used to continue to make payroll and to replenish revolving funds that were inappropriately used to pay for what Doerflinger described as “mission creep” in which agency leaders shuffled money, including federal funds, to keep certain projects afloat.
Despite the layoffs and the infusion of $30 million - an amount that’s equal to more than half of the agency’s annual $53 million state appropriation last year - Doerflinger said there will be more difficult decisions ahead for the agency.
“This is an opportunity for a hard reset for this agency,” Doerflinger said.
Doerflinger made several other suggestions for lawmakers to consider, including giving his former agency, the Office of Management and Enterprise Services, greater auditing and oversight into analyzing agency budgets, including federal funding streams.
He also suggested some changes in how reductions in force are carried out at state agencies, noting that 161 of the agency employees who were notified on Monday that they were being laid off will continue working until March 1 because of notification requirements.
“I have great concerns about productivity” with some of those employees, Doerflinger noted.
Fallin Chief of Staff Chris Benge and Denise Northrup, the governor’s former chief of staff who replaced Doerflinger as head of the Office of Management and Enterprise Services, also testified before the committee.
At least one member of the committee, Rep. Kevin Calvey, criticized Doerflinger for failing to produce any of the documents requested by the panel.
“None were provided today, none,” said Calvey, R-Oklahoma City. “We will need to subpoena those.”
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