At the first House investigative committee hearing on the Oklahoma Department of Mental Health and Substance Abuse Services’ financial issues, Commissioner Allie Friesen punted several questions to her interim chief financial officer, Skip Leonard, saying he would be able to provide more detail about the dire situation at her agency. But after Leonard testified Thursday, many legislators felt they walked away with no more answers than they had last week while barreling toward May’s budget deadline.
“In the two months now since it was first reported that folks in the department were made aware of the deficit, that we don’t have more clarity and certainty is really what’s concerning,” Chairman Mark Lawson said after Thursday’s hearing.
Leonard was originally on the agenda to testify last week, although after Friesen’s testimony and questioning alone took more than two hours, the committee chairman said Leonard and others would testify this week. On Thursday, Leonard was supposed to address some of the issues Friesen had ducked — for example, how the agency had gone from articulating a $63 million Fiscal Year 2025 budget hole estimate, to a $43 million estimate, to their current ask of a $6.2 million supplemental appropriation to get them through June 30 when the fiscal year ends.
But that didn’t really happen, and by the end of Thursday’s hearing, some lawmakers questioned Leonard being at the helm of the agency’s financial situation.
“I’m the interim CFO here. I’m not a CPA,” Leonard said early during the meeting. “My inexperience is really my experience, because when you go through enough, and you see enough, you begin to draw reference to other things in your past.”
According to Leonard’s LinkedIn, he graduated from Harvard with a master’s degree in public administration and has worked as the vice president of Dartmouth College’s school of medicine, chief foundation officer of the Lee Health Foundation in Florida and vice president of the INTEGRIS Health Foundation. (Friesen became ODMHSAS commissioner in early 2024 after nearly 10 years at INTEGRIS.)
Emphasizing that he has experience working in city and county management, Leonard said he has other people in the agency assist him with the traditional roles of a CFO, like financial planning and budgeting, and he said he seeks to increase revenue at the agency by improving relationships with philanthropists in the state.
Throughout his testimony Thursday, however, Leonard’s remarks often fell short of making lawmakers confident. At one point, Leonard told Rep. T.J. Marti (R-Broken Arrow) he was “not going to be able to do a deep down dive into” the state agency’s financial problems.
“I’m guessing I’m not the only one in here at this point that’s mildly confused at the CFO of the agency not being able to be the one that can do a deep dive into issues. I’m appreciating what you’re bringing to the table in that you’re sitting here answering our questions,” Marti responded. “But if the chief financial officer of the company is more of a visionary on community outreach and not diving deep into these issues, I find that concerning.”
Leonard was seldom able to answer questions with specific figures, and he could not give the committee a specific deadline by which the agency would provide its estimated budget request for FY 26, although he said it should be some time next week. He was unable to answer some questions about the agency’s finances, like what its overhead is on a percentage basis, and when asked if any senior ODMHSAS administrators had been terminated or furloughed in a cost-saving effort, his response included the admission that he did not know what a furlough is.
As lawmakers grew visibly more restless over his three hours of testimony — sometimes whispering among themselves about his qualifications and responses — Rep. Ellyn Hefner (D-OKC) asked why Leonard was still interim CFO of the organization.
“Respectfully, Mr. Leonard, do you recognize your lack of knowledge and skill?” Hefner asked after a long pause in her line of questioning. “Why would you stay in this position with all these months going by, making critical decisions that have definitely hit providers in our districts?”
Leonard said knowledge is one thing, but skill was another, and he insisted he had the latter.
“While I did not have knowledge to some of the things that I learned about what they are, the skill set was finding out we had a problem. The skill set was finding out, how do we address that problem?” Leonard said.
Hefner said prevention of future mistakes is not the primary goal of the committee.
“That this doesn’t happen again is not really why we’re here. We’re here to pay some bills,” Hefner said. “That is what the focus, I believe, should be. You’re talking about the future. ‘I’m here so this doesn’t happen again.’ This is happening. So, please, give us confidence that you are paying attention to the numbers that we need. Interim CFO or not, you have the job.”
Canceled contract confusion continues
One issue the committee seemed particularly concerned with was the cancellation of contracts with a trio of Tulsa-based certified community behavioral health centers. The contracts had been established in 2023, with Grand Mental Health and CREOKS gaining new catchment area in Tulsa County.
Family and Children’s Services lost catchment area owing to that change, and FCS filed a protest with the Office of Management and Enterprise Services alleging CREOKS and GMH had been given more beneficial terms in the state’s determination of catchment areas. With the protest unfolding before an administrative law judge, OMES announced April 10 that all three contracts would be terminated. At last week’s meeting, Friesen testified the contracts would be rewritten, with planned 60-day sole-source stopgap agreements between ODMHSAS and the CCBHCs to prevent disruption in services while the new contracts are negotiated.
OMES purchasing director Amanda Otis also testified Thursday, but neither she nor Leonard could say who, exactly, decided to cancel the contracts.
The cancellations are set to take effect May 10, leaving ODMHSAS just more than two weeks to decide how to contract for continued services. Rep. Marilyn Stark (R-Bethany) asked Leonard how much those contracts are anticipated to cost the state.
“I can’t tell you that cost right now, but I think once those happen, and once we see, we can get down to it. I think the state CFO can’t give you the actual cost, but can give you some processing timelines, but I can’t speak to those particular contracts,” Leonard said. “Specifically, I haven’t been involved in those, as I said before, but I think there are folks that can get you that information.”
Stark asked who would provide that information, and Leonard said he would have to be given time to determine that. Stark seemed displeased.
“So we are issuing contracts as a department, and you nor the director have been able to tell us who wrote those contracts, who’s overseeing those contracts, what they’re going to cost the state of Oklahoma, but we’re proceeding with them?” Stark asked.
Leonard asked Stark to clarify which contracts she was asking about. Her question, while perhaps partially rhetorical, ultimately remained unanswered.
Otis said from her understanding, the cancellations arose from conversations between OMES and ODMHSAS legal teams that began in March. That once again called into question Friesen’s timeline of events, who testified she was not informed of the cancellations until April 10, the day they were announced. Otis said she was not the one who sent out the cancellations, but they simply bear her signature.
Lawson (R-Sapulpa) entered an email exhibit regarding conversations between ODMHSAS and OMES about the contract cancellations. The email was credited to OMES director Rick Rose, who formerly served the House as chief of staff to the speaker’s office. On April 9, according to the email, the legal teams of the two agencies met, and OMES informed ODMHSAS the state of the protest was “unfavorable” and the Tulsa County contracts with the three CCHBCs would be canceled. Otis testified she was not in that meeting, nor the meeting in March, but she said she was “involved in a couple conversations [in March], just with the documents going around.”
Frustrated that the committee had been unable to speak with anyone privy to the cancellations through two weeks of investigation, Rep. Dell Kerbs (R-Shawnee) asked for Otis to figure out and pass along which attorneys were in the meetings.
“This dog don’t hunt,” Kerbs said. “We got canceled contracts that are in litigation, but we can’t answer who the hell canceled the contracts. We can’t even talk to who was in the room. I don’t know if they’ve signed NDAs, they’re ghost employees, they’re out flying kites, I can’t answer the question. So I need those questions answered, because these are real people’s lives out there.”
Kannady hounds ODMHSAS officials on NDAs
ODMHSAS officials did provide an update regarding one item of concern among legislators last week: the issue of ODMHSAS employees signing NDAs. During her testimony April 17, Friesen initially said four employees who retired or resigned in December 2024 signed NDAs, but then, after consulting with her general counsel, she had actually signed “settlement agreements” similar to severance packages. However, she said many current employees had been asked to sign NDAs, although they were optional.
Leonard, who has signed an NDA, explained the rationale Thursday.
“It’s important when when we’re dealing with secure, confidential information, both internal and external investigations — some that you’re not aware of, but some you may be — that we understand our responsibility as a professional, that we know that we have to recognize that we cannot talk about these things, and we have to make sure that everybody understands that,” Leonard said. “No pressure to sign it, but we want to make sure as professionals that we have that responsibility.”
Rep. Chris Kannady (R-OKC), who was particularly concerned with the NDAs, formally requested the testimony of Christina Green, ODMHSAS general counsel, to elaborate further. Green explained a first draft of the NDA was written “pretty quick” as investigations into the agency began and fears of leaks from employees mounted.
“I went to our templates, essentially NDAs that we had used before, and I drafted that one based upon one that had been used before. It was very quickly made aware to me after I reviewed it and a few folks had signed it, that is too restrictive and it just didn’t fit the need that we needed those confidentiality agreements for,” Green said.
The first NDA draft included monetary damages as potential punishment, Kannady said. Green said the second draft was more “symbolic.”
Kannady pushed back on the idea that the NDAs were purely voluntary, however, alleging a whistleblower had alerted him to possible coercion from an ODMHSAS employee named Damon Blankenbaker.
“There is an indication that he called a meeting and threatened the employees, saying that if they did not sign the NDAs, or violated the NDAs, he would go in ‘full cop mode,'” Kannady said.
Leonard and Green both said they never attended such a meeting and denied any knowledge of Blankenbaker’s alleged comments.
Leonard’s testimony, including two recesses and about half an hour of testimony from Green interspersed, lasted just under three and a half hours. At exactly 5 p.m., Leonard’s testimony ended. Acknowledging the importance of continuing work despite the evening hour, Lawson called Otis to testify.
A video recording of the investigative committee’s meeting is available to watch on the House website. The following moments from Thursday’s testimony, with time stamps in parentheses, may be notable to those following the investigation:
- Speaker of the House Kyle Hilbert (R-Bristow) asked a few questions on how the agency went from a $63 million shortfall to a $6.2 million funding request, specifically what specifically was cut or added to get to the new number. “I can’t answer all those questions completely,” Leonard said, a common response on the day. Earlier in his testimony, Leonard said the agency went from a $63 million estimate to a $43 million estimate when the agency realized $20 million worth of Medicaid funding had been improperly labeled (1:42 p.m.). Leonard told Hilbert three contract cuts were worth $2.9 million, fixed utilization savings on existing contracts amounted to $8 million and approximately $4 million from contracts that may not be paid out. Obviously, that does not add up to the nigh-$37 million difference between $43 million and $6.2 million, but Leonard said he would send a spreadsheet fully explaining where the difference lay to the committee (2:14 p.m.);
- The NDAs brought up by Kannady were not entered into public record. During Green’s testimony, Lawson advocated for an executive session to discuss the NDAs and the investigations they are supposed to protect. (3:11 p.m.). While Leonard mentioned internal and external investigations, Green only mentioned internal investigations, led by ODMHSAS’ inspector general (3:02 p.m.);
- Green said an OMES staff member sent an email to an ODMHSAS’ staff contract writer alerting ODMHSAS to the Tulsa-area CCBHC contract cancellations the afternoon of April 9. The ODMHSAS staff writer passed the information along to ODMHSAS’ assistant general counsel because Green was on vacation. Friesen had previously denied having prior awareness of the impending cancellations (3:15);
- Despite a groundbreaking in March 2024, the proposed Donahue Behavioral Health Hospital will no longer be built as it was originally proposed. “Donahue has been a longstanding issue, it was way too expensive — I guess, I wasn’t here — but it turned out to be way too expensive, and we’ve come up with an alternative,” Leonard said. He said $7.5 million in private donations, $1.5 million from Oklahoma County and $1 million from Oklahoma City that were used to lease land from Oklahoma State University’s OKC campus will be recouped and returned to the donors and local governments. However, OSU officials have previously said much of that money was already spent preparing the site. While Leonard said the hospital will no longer be built on that land, ODMHSAS is awaiting approval from ARPA on a new plan (4:07 p.m.); and
- Lawson questioned the legality of OMES canceling the contract with Family and Children’s Services. In the contracts with CREOKS and Grand Mental Health, OMES is specifically listed as parties to the contract, but in the Family and Children’s Services contract, OMES is listed only as a signee ensuring compliance with state law. Otis said from her understanding, OMES acted within its authority, but upon Lawson’s request, she said she would provide what statutory or constitutional right OMES has to terminate a contract without being an official listed party (5:07 p.m.).
After the meeting, Lawson said that while he has a “tremendous amount of confidence” in the House budget team, time is ticking for the committee to validate ODMHSAS’ financial needs. The Legislature is attempting to approve a budget by the last Friday in May. Lawson said he plans to call state CFO Aaron Morris in to testify at future investigative committee meetings, along with representatives of the OMES and ODMHSAS legal teams. Regina Birchum, the director of the Legislative Office of Financial Transparency who was scheduled to testify Thursday, will also speak at some point, he said.
Last week, Lawson mentioned he hoped to understand better how ODMHSAS had arrived at a $6.2 million request from an initial $63 million deficit. Asked if he accomplished that Thursday, Lawson’s answer was simple: “No.”
“[Hilbert] had some really good questions about that,” Lawson said. “We asked Mr. Leonard to provide a more detailed spreadsheet of that, because how are you mapping that out? I think we are prepared to get some interesting information from Ms. Birchum here with LOFT. Again, that’s someone that’s in-house, and we’re gonna go and find as much information as we can so that we can make a good decision.”
