Oklahoma Department of Agriculture owes money to unknown entity

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(Update: At 11:45 a.m. Monday, March 26, NonDoc published a follow up to this story concerning the Oklahoma Department of Agriculture.)

The Oklahoma Department of Agriculture Food and Forestry owes about $55,000 to another state agency, but Secretary of Agriculture Jim Reese says administrators have not been able to determine which agency is supposed to receive the money.

In November, NonDoc reported that the U.S. Treasury siphoned about $835,000 of federal funding from Oklahoma to resolve what Reese called a “billing dispute” with his agency.

As a result, state agencies that lost federal funding were sent letters about the offsets and have had to reach out to the Office of Management and Enterprise Services (OMES) for help reclaiming the money from the Oklahoma Department of Agriculture.

Two payments — one for about $14,000 and another for about $41,000 — are still pending because state administrators have been unable to identify the affected agency, Reese said.

“We have a ZIP code and an agency number that doesn’t correlate to anything Oklahoma has,” Reese said. “It says ‘Department 2563’. So we don’t have a place to pay.”

When first asked about the treasury offsets Tuesday, Reese said he believed the situation had been resolved. Later, however, he confirmed that two payments were still delinquent to the unidentified agency.

“My staff did know and has been looking for the last two weeks,” Reese said. “I just didn’t know that was going on. OMES had been looking for it. They didn’t know who it is.”

Reese said the Tulsa ZIP code includes a two-building complex at 444 S. Houston Ave. The Robert S. Kerr Building and the J. Howard Edmondson Building house several agencies:

• Department of Human Services
• Office of Juvenile Affairs
• Department of Rehabilitation Services
• Alcoholic Beverage Laws Enforcement (ABLE) Commission
• Corporation Commission
• Department of Corrections
• Workers Compensation Court
• Workers Compensation Commission
• Tax Commission
• Supreme Court

The building also contains offices for OMES and the Oklahoma Department of Agriculture.

“I thought it was done. I just thought it was done,” Reese said of the financial snafu. “I’m going to call those agencies and try to find out which one [we owe money].”

Reese: ‘At this point, we just don’t know’

Members of the Oklahoma House of Representatives expressed disbelief when discussing the Department of Agriculture’s financial misadventure.

“It definitely is a problem,” said Rep. John Pfeiffer (R-Orlando). “The most disturbing thing about this, to me, is this is one that we caught. How many of these are out there?”

Pfeiffer, chairman of the House Appropriations Subcommittee on Natural Resources and Regulatory Services, said he has a good relationship with Reese. But he expressed dismay that House committee chairmen — tasked with providing public oversight — were not alerted to the issue.

“To find it out in the way we did is frustrating,” Pfeiffer said. “I hope in the future he brings these things to our attention.”

Reese himself did not know about the unpaid reimbursements until approached about the situation by NonDoc.

Asked what he would say to members of the public who might be shocked that his agency owes money to a separate department it cannot identify, Reese paused for 30 seconds, laughing briefly before clearing his throat and responding.

“The Treasury sends the letters directly to the agencies and they do not notify OMES, and they do not notify the agency that it was taken to offset for,” he said. “And I know that both OMES and U.S. Wildlife Services has asked for a full accounting of the offsets and where they came from, but we haven’t gotten those except to the degree that this one says ‘Department 2563, Tulsa ZIP code.'”

Shelley Zumwalt, director of public affairs for OMES, called treasury offsets “problematic.”

“Every agency simply looks like ‘State of Oklahoma,’ so we have to do some detective work to determine who caused the offset and what agencies were shorted,” Zumwalt said. “Once determined, standard process is that the agency that caused the offset reimburses the agency that was shorted. Reconciling these payments happens frequently and it’s not unusual.”

Reese said his agency has received “several offsets” from the U.S. Treasury and that “a lot of agencies” have received offsets as well. He speculated that the agency designated “Department 2563” may have moved from the Kerr-Edmondson complex, potentially not receiving postal correspondence from the federal government.

“This may be a smaller agency. It may be an agency that has been consolidated,” he said. “We just don’t know. At this point, we just don’t know.”

Rep. Josh West: ‘Completely unacceptable’

Among the entities who experienced hiccups in funding are the Oklahoma Military Department, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the Oklahoma Department of Veterans Affairs, the Office of the State Treasurer, the Department of Rehabilitation Services, the Department of Corrections and Oklahoma State University.

Rep. Josh West, chairman of the Veterans Caucus, said the offsets are a problem and that agency directors need to find answers.

“In a time when we have continued to cut our state agencies like the Oklahoma Department of Veterans Affairs and the Oklahoma Military Department, this is completely unacceptable and needs to be further investigated,” said West (R-Grove). “There’s a lot of implications with this.”

Process efficient for feds, tough for state

Reese noted that the federal government’s action was less efficient for the state agencies affected.

“This is very efficient from the federal government side because the federal government considers the state of Oklahoma as one tax entity,” Reese said. “So the federal government says, ‘We don’t care where we get the money. The state owes us the money, and we’re going to take it from anybody who gets our money.’ So they just start making cuts. From the Treasury standpoint, it’s their most efficient (option) because they just take it.

“But from our standpoint, yeah, we would have much rather it come straight from us and identify us as the offset, and that would have been done in very short order.”

RELATED

Department of Agriculture ‘billing dispute’ frustrates lawmakers by William W. Savage III

(Correction: This story was updated at 11:11 a.m. — five minutes after it published — to note the correct date that Reese was asked about the issue.)

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