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Top lawyer gone at Health Department

Editor's note: A previous version of this story included a video with footage of OKC-County Health Department, which is not under investigation.

One of Preston Doerflinger's first moves Tuesday as interim head of the beleaguered Oklahoma Department of Health was to force out the agency's chief lawyer.

Don Maisch's ouster follows the resignation of Health Commissioner Terry Cline and Cline's top deputy, Julie Cox-Kain, at an emergency State Board of Health meeting the night before.

The department's Business Planning Director Felesha Scanlan resigned Monday.

They could not be reached for comment.

State officials are now looking into claims of misappropriation and overspending. However, state and federal investigators were warned about problems at the Oklahoma Department of Health nearly three years ago, according to records obtained by The Oklahoman.

Around late 2014 or January 2015, a whistleblower asked Scott Pruitt, then state attorney general, to investigate what was described in a letter as "several crimes being committed at the State Department of Health."

It's not clear how vigorously Pruitt investigated the complaint, if at all.

State and local officials are now puzzled by the department's sudden, midyear shortfall, reported to be at least $10 million.

The agency, which oversees everything from nursing homes to licensing tattoo artists, gets nearly 60 percent of its funding from the federal government.

In September, the department said it faced an immediate, multimillion budget shortfall due to a loss of state and federal funding. The agency said it would implement furlough days for some employees, layoff up to 250 employees in 2018 and make other cuts because of a budget crisis.

The department is not, however, one of three state agencies that lost millions of dollars this fiscal year from the Oklahoma Supreme Court's ruling that struck down a cigarette fee. Cline announced the cutbacks in the middle of the budget year, months after he learned how much money he would receive from state appropriations.

The allegations in the 2015 letter include misappropriation of public funds, the same concern that now plagues the department. It does not include much detail beyond alleging mismanagement of federal funds and personnel grievances.

After receiving the complaint, Pruitt's office forwarded the letter to the state Health Department.

"Since this is a matter within your jurisdiction, we are referring it to you for such action as you deem appropriate," wrote the AG's office.

It's not uncommon for investigators to notify agencies about a complaint. What's not clear, however, is why the attorney general allowed the Health Department to investigate its own chief officials who were accused of criminally mismanaging federal funds.

The attorney general's office underwent a staff turnover with Pruitt's departure to serve in the Trump administration, and an agency spokeswoman said current staff may not be aware of the complaint or how it was handled.

A separate complaint signed "concerned employees" was sent to the FBI. The letter, also obtained by The Oklahoman, asked for help after several administrators quit "because they were (asked) to do things that were neither legal nor appropriate."

The FBI could not confirm the letter's authenticity.

Surprise shortfall

Considering the Health Department's public comments, the crisis came as a surprise. State Rep. Josh Cockroft, R-Wanette, who sits on the Legislature's joint budget committee, said the Health Department told lawmakers in May that it would be adequately funded for the year.

"It came as a shock to us when these midyear furloughs and cuts begin to take effect," Cockroft said. "That immediately raises a red flag to me."

While the Health Department only had its state budget cut by 2.8 percent this fiscal year, the agency has lost more than 29 percent of its state funding since 2009.

In response to questions about what federal funding the agency had lost, agency spokesman Tony Sellars wrote in an email that the agency had lost about $8.8 million in grants over the past few years.

The biggest loss was a $6.4 million federal grant for home visits to at-risk pregnant women, with the hopes the interaction will prevent child abuse and neglect.

Doerflinger, who was named interim health commissioner, said in an email that he will partner with the governor's office, state auditor and the state attorney general's office to begin an in-depth analysis of Health Department's budget problems.

Doerflinger couldn't say where the agency's budget problems had come from. He also said he wouldn't rule out moving forward with previously announced furloughs and layoffs at the agency.

"We are analyzing the fiscal situation and will provide more information in the near future," he wrote.

City-county departments

Concerned about an unfolding budget crisis at the state level, the OKC-County Health Department and the Tulsa Health Department sent a joint letter to the state last month asking for a full accounting of how state and federal funding has been distributed.

The county health departments asked for the information after state agency told both departments it would begin billing $868,000 annually for STD testing and medication due to the budget crisis.

The health departments have yet to receive a response to their request, but OKC-County Health officials met with Doerflinger on Tuesday and were encouraged by the change in leadership, said Jackie Shawnee, spokeswoman for OKC-County Health.

"We are excited and hopeful that some of those things will be looked at now," Shawnee said.

Related Photos
Capitol renovation continues with the scaffolding moving to the east and north sides of the building, Friday, October 6, 2017. Photo by Doug Hoke, The Oklahoman

Capitol renovation continues with the scaffolding moving to the east and north sides of the building, Friday, October 6, 2017. Photo by Doug Hoke, The Oklahoman

<figure><img src="//cdn2.newsok.biz/cache/r960-7927529214d85ea48983df1f46df4ec5.jpg" alt="Photo - Capitol renovation continues with the scaffolding moving to the east and north sides of the building, Friday, October 6, 2017. Photo by Doug Hoke, The Oklahoman" title="Capitol renovation continues with the scaffolding moving to the east and north sides of the building, Friday, October 6, 2017. Photo by Doug Hoke, The Oklahoman"><figcaption>Capitol renovation continues with the scaffolding moving to the east and north sides of the building, Friday, October 6, 2017. Photo by Doug Hoke, The Oklahoman</figcaption></figure>
Brianna Bailey

Brianna Bailey joined The Oklahoman in January 2013 as a business writer. During her time at The Oklahoman, she has walked across Oklahoma City twice, once north-to-south down Western Avenue, and once east-to-west, tracing the old U.S. Route 66.... Read more ›

Dale Denwalt

Dale Denwalt has closely followed state policy and politics since his first internship as an Oklahoma Capitol reporter in 2006. He graduated from Northeastern State University in his hometown of Tahlequah. Denwalt worked as a news reporter in... Read more ›

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