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Feds join Oklahoma health agency inquiry

Preston Doerflinger was named interim state health commissioner after financial irregularities were discovered at the state Health Department. This photo was taken Dec. 11 as he answered questions about the department during an inquiry at the state Capitol. [Photo by Steve Sisney, The Oklahoman]

Preston Doerflinger was named interim state health commissioner after financial irregularities were discovered at the state Health Department. This photo was taken Dec. 11 as he answered questions about the department during an inquiry at the state Capitol. [Photo by Steve Sisney, The Oklahoman]

The FBI and other federal officials are now part of the ongoing investigation into the Oklahoma State Department of Health's finances.

Oklahoma Attorney General Mike Hunter announced Tuesday that attorneys and investigators with his office will work with federal authorities and the state auditor's office to scrutinize movement and management of both state and federal monies at the state Health Department.

The FBI and the Office of the Inspector General of the U.S. Department of Health and Human Services are now both involved in the investigation.

"I appreciate the collaboration of the FBI and HHS in insuring that we can conduct a thorough and exacting review of the situation at OSDH,” Attorney General Hunter said in a statement. "We will get to the bottom of what happened there."

Interim Health Commissioner Preston Doerflinger has said the department used "accounting tricks" for several years to create an illusion that it had a balanced budget. In reality, he said, officials have spent more money than the department took in since 2011.

Lawmakers issued a $30 million emergency appropriation to the state Health Department during a recent special session, in part, to make sure the agency could make payroll.

The Health Department's muddy finances also are being investigated by an Oklahoma multicounty grand jury and a House of Representatives Special Investigation Committee.

On Tuesday, Deborah Nichols, former chief operating officer for the Health Department, testified that the problems at the agency stemmed from mismanagement and sloppy accounting practices over a period of years.

Nichols resigned in November, one of a series of top executives who have exited the Health Department in recent months.

Health Commissioner Terry Cline and his top deputy, Julie Cox-Kain, both abruptly resigned in October after money problems came to light at the agency.

Speaking before the House investigative committee, Nichols said she didn't think anyone stole money from the agency.

"Some of this mismanagement is simply borrowing from Peter to pay Paul and never paying Paul back," Nichols said. "A lot of that has occurred."

Nichols refused to answer questions about whether she had spoken to the FBI.

In a statement, Doerflinger said the Department of Health is cooperating with the ongoing investigation.

"The financial mismanagement at the Oklahoma State Department of Health is a very serious issue for our current employees, the agency and the state of Oklahoma," Doerflinger said. "The attorney general, with the assistance of the FBI and the HHS Office of Inspector General, have an obligation to hold those responsible accountable for their actions and we will continue cooperating with all authorities during the course of their investigation. It is imperative that we make sure this unprecedented situation never happens again."

Also on Tuesday, Doerflinger and State Auditor Gary Jones continued to point fingers at each other over who knew what when about the Health Department.

At a late afternoon news conference, Doerflinger said that he was dismayed at what he called a “false narrative” that he knew about the possibility the Health Department might not make payroll long before it became public.

“if I had this information, I would be screaming bloody murder that we have a state agency in crisis,” he said.

In rebuttal, Jones said Doerflinger was doing “damage control.”

Jones said he even took the unusual step of alerting Doerflinger to the Health Department's cash shortage while an audit was still underway at the agency over the summer.

As state finance secretary, Doerflinger should have grasped the gravity of the situation, Jones said.

“I don't know how many red flags you have to throw up,” Jones said.

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 ›

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