agency audits
The Oklahoma State Department of Health is being audited by Oklahoma State Auditor and Inspector Gary Jones. (William W. Savage III)

The Legislature could end its eight-week special session Friday through a “cash and cuts” approach spurred by lawmaker calls for agency audits. Oklahoma’s new Agency Performance and Accountability Commission is set to meet Dec. 7, but Gov. Mary Fallin and State Auditor and Inspector Gary Jones have questioned lawmaker rhetoric on the topic.

“There are people in the Legislature who say, ‘We should just audit. We will find savings.’ That’s just saying, ‘I don’t want to vote for something. I don’t want to fix our problems,'” Fallin said Wednesday morning. “Now, do I think we need to audit agencies? Absolutely, and we do. But frankly, the State Auditor and Inspector’s Office has had a lot of cuts to their budget, and he tells me it’s hard for him to do the audits because he doesn’t have a lot of money right now, and that’s one of the reasons why we need to fix our structural problems in our state budget.”

Jones, meanwhile, audits agencies already at the request of Fallin or the state’s attorney general. Jones also noted that the Oklahoma Constitution allows House Speaker Charles McCall (R-Atoka) and Senate President Pro Temp Mike Schulz (R-Altus) to jointly direct him to audit any state agency.

“There’s never been an official request from the Legislature (since I have been auditor),” said Jones, who was elected in 2010. “Now, I will tell you there are dozens and dozens of House or Senate members who have come to us wanting us to audit someone. We told them the procedure and never got any further request. Not one.”

McCall and Schulz were the lead authors on HB 2311, which was signed by Fallin in May. That bill established the Agency Performance and Accountability Commission, and directed that Fallin, McCall and Schulz each appoint three members to its board. The 10th member is slated to be the director of the Oklahoma Office of Management and Enterprise Services or a designee.

Acting OMES director Denise Northrup said she will fill that 10th position but noted that the Legislature itself is in charge of the new commission.

“HB 2311 states that the cost of the contract for any independent comprehensive performance (audit) shall be paid for by the Legislative Services Bureau,” Northrup said. “No additional funds were appropriated to LSB in FY 18.”

The commission is scheduled to hold an initial organization meeting 1 p.m. Dec. 7 in room 412C at the Capitol, according to House staff.

While an agenda does not currently appear to be publicly available, NonDoc obtained a PDF that lists eight of the nine appointed commission members:

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Senate staff noted that the final appointed member is John O’Connor of Tulsa, who was appointed Oct. 11.

‘Come audit me!’

While auditing state agencies has been a hot Capitol topic in special session, the Dec. 7 initial meeting will give the commission only about three weeks to create and submit an annual report that is required by Dec. 31 in statute.

“I made my appointments early on, and then the House and Senate made theirs much later, and I kept pushing for that,” Fallin said. “But they’re going to look at the structure of government in general. You’ve got outside people who are great business people, they’re going to look at this, but it’s not going to solve our problem for this next session. It might help out in the year 2020, hopefully, and I think it’s the right thing to do, that’s why I signed the bill, but we’ve got issues right now that we need to solve for making the payroll in November for the Health Department and things like that.”

Embroiled in a $30 million funding scandal that caused former Commissioner of Health Terry Cline to resign at the end of October, the Oklahoma State Department of Health has become the prime specimen in the Petri dish of agency incompetence.

Jones is currently conducting a forensic audit on the agency, and House members passed HB 1028 Wednesday. That bill will require OSDH to submit a “corrective action report” to the Legislature by Jan. 1 that would prepare for a 15 percent appropriations cut.

“We don’t get to audit these agencies,” Rep. John Bennett (R-Sallisaw) said Wednesday when debating a separate bill. “A performance or forensic audit would give us those numbers in details so we would know for a fact whether we need to decrease their funding or increase their funding.”

Bennett and other conservative lawmakers have preached agency audits as a necessity before passing new revenue measures.

“If I were an agency head, I’d be jumping up and down saying, ‘Come audit me!’” Bennett said Wednesday. “Have you heard one of those agency heads doing that? Nope.”

Over a four-year cycle, the Agency Performance and Accountability Commission will be tasked with spearheading agency audits for the top-20 agencies in terms of appropriations.

“Whether Oklahoma is experiencing budget surpluses or shortfalls, it is important state agencies are using taxpayer dollars efficiently and are delivering services effectively,” Schulz said in a statement provided to NonDoc. “The Agency Performance and Accountability Commission will provide lawmakers with a lot of valuable information on state budget trends and best-practices from the private sector. All of that data will help lawmakers set spending priorities in the budget and guide us as we work to improve the efficiency and performance of agencies. I look forward to seeing the work of the commission and their recommendations.”

But Jones noted that the Agency Performance and Accountability Commission has lower thresholds for its audits than his office would.

“If we do the audits, we have to do them according to government auditing standards, and all of our people have to be certified and qualified to work on an audit, and the information has to be made public,” said Jones, who is running for the 2018 Republican gubernatorial nomination. “I think sometimes [legislators] don’t like the answers they get back, so I think they may want to narrow the scope of what they want looked at and not look at the overall picture.”

But while Fallin said she looks forward to the new commission beginning its work, she hopes lawmakers will continue to focus on fixing Oklahoma’s revenue problems.

“Those are the types of issues we need to be working on — immediate solutions for immediate problems,” the governor said. “It’s nice to say, ‘Let’s audit.’ It’s nice to say, ‘Let’s look for ways,’ but when you’ve cut agencies so much, you can keep looking for ways, but to me that kind of seems like people who want to cut and go home.”

The House vote on a new appropriations bill that cuts dozens of agencies passed 56-38 Wednesday afternoon.

Read the Agency Performance and Accountability Act

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