COMMENTARY – Government “right-sizing,” voter sentiment and the top state news story of 2017

OKLAHOMA CITY – Suddenly – in a matter of weeks – Oklahoma’s case in point for bad government is the state Department of Health. 
Paul Monies at Oklahoma Watch, reporters for The Oklahoman, and other journalists have set the table with the depth of shocking issues of waste, fraud and abuse at the department. 

As personnel costs and salaries increased from 2011 to 2016, top agency staffers were robbing Peter to pay Paul. Even as low energy prices put recurring pressure on state finances — preventing the big budget growth of earlier years — millions of dollars were mis-allocated at the agency. 
The most egregious decisions diverted money intended to benefit Oklahomans suffering from HIV and full-blown AIDS to cover recurring expenses. The money in question flowed from federal programs, meaning the explicit avoidance of guidelines connected to the federal dollars is a serious, and possibly criminal, matter.

As a result of open-record requests (, Mr. Monies reported (beginning in mid-December) shocking specifics, including an internal agency memorandum finding (in his summary): 

– Debt of more than $30 million as a result of the financial maneuvers, constituting “unconstitutional indebtedness of a state agency.”
– Creation of agency “borrows,” or transfers, that amount to “fictional assets.”
– False claims that liabilities were reconciled.
– Breaching restricted federal funds, such as a fund for an HIV/AIDs program, and restricted state funds, such as revolving funds.
– Agency payroll expenses that grew to $150.8 million in fiscal year 2018, up from $132.7 million in 2011.
– Money “fronted” on contracts, including more than $13 million to the Tobacco Settlement Endowment Trust and $1.5 million to the University of Oklahoma Health Sciences Center.
– An absence of business discipline on health programs where “a wish or desire gets executed without deliberation.”
– Omissions to the Legislature and the Board of Health regarding the financial position of the agency.

As a result of such shenanigans, the federal government plans to deny $115 million for what Monies describes as “safety-net hospitals.” ( 

Here is my modest new contribution to the story: Sources requesting anonymity say that Cline’s problems as a manager began long before his tenure at the state Department of Health.
When Cline ran the Department of Mental Health and Substance Abuse more than a decade ago, key allies of the agency and its purposes grew concerned with mis-allocation of resources and bad performance by some employees.
Members of the agency’s board pressed for some firings, wanting a house-cleaning and better management. After saying he would do so, Cline instead departed for an out of town job, leaving the mess to his successor. While there seems to be no sense that Cline personally benefited from the problems, he clearly did not have the stomach to force needed change. 
The scandal at Health might be rooted in bad motives, or it could be simple mismanagement. ( 

Regardless of how one characterizes it, this is jarringly bad news. A state grand jury is investigating. The federal Department of Health and Human Services is probing. Attorney General Mike Hunter said he appreciated “the collaboration of the FBI and HHS” for a “thorough and exacting review of the situation. … We will get to the bottom of what happened there.” 
The Health Department scandal is so deep and shocking that it gives pause to voters. Oklahomans want good public schools, and believe in sustaining programs like those intended to benefit medical patients in special need. But they also want reasonably good performance in the use of tax money.

As for the House Special Investigation Committee, they have already heard from Deborah Nichols, the former chief operating officer for the Health Department about what The Oklahoman’s Brianna Bailey summarized as “mismanagement and sloppy accounting over a period of years.” 
State Rep. Josh Cockroft, R-Wanette, commented it was “completely unacceptable” for any agency to so poorly manage tax resources. These days you hear things like “insufficient oversight” and “inadequate internal controls” regularly applied to state governance.  

Taxpayers are more than dubious about expanding government and raising revenue at a time when it is clear that some agencies are horribly managed. If any more agencies have issues remotely similar to the Health Department, the range of the scandal – already bad enough – could equal hundreds of millions of dollars, or more. 
The Board of Equalization certified, on December 20, the state government could have more than $425 million in tax revenue growth in the coming year, relieving at least much of the budget pressures that led to Governor Mary Fallin’s call for a second special session — after her inexplicable veto of the first special session’s budget plan. 

The Health Department scandal is the number one public policy of the state news story of 2017, as I’m explaining in analysis for CapitolBeatOK and in my weekly segments discussing policy issues with News9’s Alex Cameron. 
The state House and Senate are putting our government under a microscope. A legislative “hotline” for whistleblowers could yield useful insights. All of this is long overdue. 
Rather than hectoring legislators to ignore problems and increase taxes on working families, Governor Mary Fallin should support the kind of oversight and “right-sizing” she promised in her 2010 and 2014 campaigns.

NOTE: McGuigan is founder and editor of, an online news service, publisher of The City Sentinel newspaper, and a member of the Oklahoma Journalism Hall of Fame. He appears every Saturday morning on News9’s Capitol Report.