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Former Oklahoma Health Department official alleges another agency covered up financial problems

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Players in the Oklahoma State Health Department scandal

Michael Romero, chief financial officer with the state Health Department, testifies before the House Special Investigation Committee at the Capitol on Jan. 12. Romero resigned Thursday. [Photo by Steve Sisney, The Oklahoman]

Michael Romero, chief financial officer with the state Health Department, testifies before the House Special Investigation Committee at the Capitol on Jan. 12. Romero resigned Thursday. [Photo by Steve Sisney, The Oklahoman]

Oklahoma City — The state Health Department's former chief financial officer leveled accusations that another state agency helped conceal the department's multimillion dollar budget problems.

However, the Health Department dismissed the allegations from Mike Romero, the former CFO, as baseless and part of a bizarre change in behavior after officials raised issues with his job performance.

Romero's allegations raise questions about whether the Office of Management and Enterprise Services knew about the Health Department's financial mess, and failed to sound the alarm. Preston Doerflinger, the interim health commissioner, previously oversaw OMES.

The Health Department's budget crunch came to light in October, when officials said they wouldn't be able to make payroll without a cash infusion. The Legislature appropriated $30 million and launched an inquiry into the department's finances.

The budget trouble has led to layoffs and shut down programs to prevent child abuse and compensate community health centers that care for people without insurance.

Romero and OMES officials agree the Health Department concealed years of overspending by shifting around money, until it ran out of funds to shuffle.

But in a memo dated Jan. 31 Romero alleged OMES officials sought to cover up the problems.

He wrote that during a meeting in early October, OMES staff had proposed the Health Department “adopt a scheme to use federal funds as a cash flow vehicle for the coverage of upcoming payroll obligations,” something Romero alleged was inappropriate.

He said former Health Department Senior Deputy Commissioner Julie Cox-Kain and former Chief Operating Officer Deborah Nichols were present at the meeting, which was held before the department's financial situation became public knowledge. Nichols and Cox-Kain couldn't be reached for comment Monday.

Many federal grants come with specific instructions about how they can be used, and directing them toward paying unapproved salaries would be a questionable practice. Romero said he and Nichols objected to the plan.

“I am concerned that the OMES employees put forth this option because they were precisely acquainted with the possibility that the statewide accounting system could be abused in this fashion,” Romero said in his memo, a copy of which was obtained by The Oklahoman.

OMES spokeswoman Shelley Zumwalt said Monday that Romero mischaracterized the discussion. She said OMES employees were asking questions to determine whether the Health Department was going to run out of cash, or just not get it quickly enough to make payroll.

“In the course of the discussion, the budget staff inquired about the availability of all and any funds to assist with making payroll,” she said. “To be clear, OMES staff did not make a recommendation to use federal funds for payroll.”

Romero also alleged that some OMES employees knew about the Health Department's financial problems last year and kept the matter quiet. Zumwalt said the office didn't know about the budget issues until Cox-Kain and former Commissioner Terry Cline requested an audit in late September.

The dispute represents a strange turn in the ongoing saga of the Health Department's financial woes. Romero was one of the employees who raised concerns about the budget situation, and before he resigned Thursday had regularly appeared at the state Legislature and committee meetings that discussed the Health Department's future.

In his resignation letter, Romero said the department's leadership was “compromised” and the department's recovery was “tainted with multiple conflicts of interest.” He also alleged Doerflinger was inappropriately monitoring employees' statements to state and federal investigators, because Doerflinger allegedly said Romero's memo conflicted with another employee's “testimony.”

A statement from the Health Department denied Doerflinger improperly monitored the investigations, and said Health Department officials were able to identify factual errors in Romero's memo without any inside knowledge of the inquiry.

“Multiple members of OSDH leadership were able to immediately identify the factual errors and inconsistencies in Mr. Romero's responsive memo on the face of the document due to their knowledge of the OSDH payroll process and all of the relevant facts of the past few months,” the statement said.

Romero couldn't be reached Monday for comment, and Doerflinger's office didn't respond to detailed questions about Romero's allegations.

The Health Department's statement also said Romero only began to complain after problems with delayed payments to the Oklahoma Employment Security Commission under his leadership came to light.

The statement also expressed disappointment that lawmakers had shared what it considered unsubstantiated allegations on social media and said the department would hire a firm to perform an audit of its operations.

“OSDH leadership is continuing to work as quickly as possible to rectify the financial mismanagement of the agency,” the statement said. “We will maintain our course of transparency and fiscal efficiency as we continue our task of righting and right-sizing the agency.”

Meg Wingerter

Meg Wingerter has covered health at The Oklahoman since July 2017. Previously, she lived in Topeka, Kansas, and worked at Kansas News Service and The Topeka Capital-Journal, where she earned awards for business coverage. She graduated from... Read more ›