OKLAHOMA CITY – The Oklahoma Department of Mental Health and Substance Abuse Services experienced serious budget problems along with a lack of oversight and financial clarity that caused the agency to exceed its budget, a new report from the Legislative Office of Fiscal Transparency revealed.
The 38-page LOFT report outlined at least 15 budget problems within the department that caused state lawmakers to remove the agency’s executive director in late May.
“LOFT observed numerous poor budgeting practices within DMH that contributed to the agency’s lack of understanding about its finances and allowed it to exceed its budget, resulting in a request for supplemental funds to support agency operations through the end of the fiscal year,” the report noted. “Collectively, these practices also obscured visibility into the agency’s expenditures.”
Senate President Pro Tempore Lonnie Paxton (R-Tuttle) and House Speaker Kyle Hilbert (R-Bristow) asked for LOFT investigation in March after mental health officials requested supplemental funding to maintain operations through the end of the fiscal year.
Paxton said the report underscores lawmakers’ decision to remove Allie Friesen, the department’s former commissioner. He said the report shows the importance of strong financial oversight in agencies that provide critical services to Oklahomans.
Lawmakers voted to remove Friesen from her post in late May, citing a lack of confidence in her leadership and financial mismanagement within the agency.
Paxton said the LOFT confirmed that lawmakers made the right decision.
“These were not isolated incidents. They reflect a broader failure to effectively manage an agency that serves some of Oklahoma’s most vulnerable citizens,” the Senate leader said in a media statement. “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.”
Sen. Paul Rosino (R-Oklahoma City), the chair the Senate Health and Human Services committee echoed Paxton.
“LOFT’s comprehensive work in uncovering the systemic issues that led to this financial mismanagement has shed a light that lawmakers were not getting answers to,” Rosino said.
“Since Admiral Slavonic stepped in as interim director, I’ve been in constant communication with him. I am confident in his efforts to rightsize the agency and return its focus to delivering vital mental health services efficiently and effectively. It is critical we get this right to build public trust and serve those in need.”
House leaders said the LOFT report will influence in the ongoing investigation into the agency’s operations.
“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,” 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.”
House Majority Leader Mark Lawson said the report shows a need for increased transparency across all state agencies.
“When taxpayer dollars are involved, especially in agencies serving vulnerable populations, there must be a high level of transparency and accountability,” Lawson (R-Sapulpa) said. “This report highlights the dangers of poor executive oversight and reinforces the need for reforms to ensure lawmakers, and the public, can trust how agencies are managing their funds.”
Shortly after the report was released, Attorney General Gentner Drummond issued a media statement praising the LOFT report.
Drummond said he met with the agency’s interim director, retired Rear Admiral Gregory Slavonic. He said he and Slavonic had pleasant discussions, but Drummond added he did 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,” Drummond said. “My office stands ready to support them however we can.”
A legislative investigation of the agency continues.