A report released by Oklahoma’s Legislative Office of Fiscal Transparency goes into detail about the widely reported financial troubles at the Oklahoma Department of Mental Health and Substance Abuse Services.

Lawmakers said the report confirmed legislative concerns that led to a change in agency leadership.

On the final day of the legislative session, lawmakers voted to remove Allie Friesen as the state’s mental health commissioner.

The report said LOFT found numerous poor budgeting practices within ODMHSAS that it said contributed to the agency’s lack of understanding about its finances and allowed it to exceed its budget.

Near the end of its fiscal year, which ended June 30th, the agency asked lawmakers for millions of dollars in supplemental funding.

“The LOFT report confirms the Legislature made the right decision in removing the former director responsible for the mismanagement at the Department of Mental Health.” Senate Pro Tem Lonnie Paxton said. “These were not isolated incidents. They reflect a broader failure to effectively manage an agency that serves some of Oklahoma’s most vulnerable citizens. I appreciate LOFT’s thorough and diligent work in bringing these issues to light. I’m confident that, with new leadership and the implementation of these recommendations, the agency can regain stability and refocus on its core mission. LOFT’s work gives us the transparency and insight needed to ensure mental health services are supported with integrity and fiscal responsibility.”

House Speaker Kyle Hilbert said the findings of the report will factor into the Legislature’s continued investigation into the agency.

“This report is a critical piece in our joint House and Senate investigation into what went wrong at this agency and gives us a roadmap to improve budgeting practices not just at ODMH, but across all state agencies.” Speaker Hilbert said. “This report lays the foundation lawmakers need to make informed decisions moving forward and highlights the importance of sound financial practices in every state agency. I appreciate LOFT’s work in digging into this and the new leadership at the agency for providing answers during this investigation. These are critical services Oklahomans need, and we must get this right.”

Here are the highlights provided in the report that lawmakers said led to the financial issues within the department:

• Failing to accurately budget key operational areas
• Treating funds as fungible
• Over-encumbering funds
• Failure to track when funds are expended for a purpose other than originally budgeted
• Failure to reconcile budget to actuals
• Violating the balanced budget requirement by deferring payment for current fiscal year obligations until the next fiscal year
• Billing purchases in the current fiscal year to the prior year’s budget
• Poor purchasing controls
• Increased spending on areas extraneous to the agency’s mission
• Poor contract management
• Lag times in making payments and reimbursements
• Expending funds in ways not authorized by the Legislature
• Failure to track expenditures in relation to legislative direction
• Failure to correct deficient financial practices identified in past financial and purchasing audits
• Increasing spending on administrative staff after identifying a budget shortfall

Read the full report here

Oklahoma Attorney General Gentner Drummond responded to the report with the following statement.

“The LOFT report confirms what I said throughout the legislative session: Gov. Stitt needed to fire Allie Friesen. Instead of acting in the best interests of Oklahoma taxpayers, he acted in the best interest of a failing bureaucrat who never had a good answer for why or how tens of millions of dollars went missing. Thankfully, the Legislature was willing to remove Ms. Friesen so the state Department of Mental Health could benefit from new, more qualified leadership. While I have met with the interim director and have had pleasant discussions, I still do not have any definitive explanation on the millions of missing tax dollars. I have offered to assist the department leadership in any way possible to find and recover these funds. My office stands ready to support them however we can.” AG Drummond said.