(Editor’s note: Around 5:30 p.m. Friday, May 2 — eight hours after the publication of this article — an ODMHSAS spokesperson released a statement claiming the agency had the “ability to confirm that payroll will be processed for the fiscal year as scheduled” after “swift action and collaboration that has taken place over the past 24 hours.” The following article remains in its original form but includes statements released by legislative leaders earlier Friday.)
The confusing crisis within Oklahoma’s Department of Mental Health and Substance Abuse Services has left the agency unable to make payroll in the first week of Mental Health Awareness Month, Speaker Kyle Hilbert told House members Thursday evening.
“Very late this afternoon, Majority Leader Mark Lawson received a call from the ODMHSAS legislative liaison stating they have insufficient funds available to make payroll for Wednesday, May 7, and are $23 million short for the remainder of FY 25,” Hilbert (R-Bristow) wrote in an email. “This is the first we have heard from the agency about being unable to make payroll. On March 31, in a meeting in my conference room, I specifically asked if there would be any cash flow issues before the end of May and was assured there would not be.”
Hilbert said Commissioner Allie Friesen confirmed that the agency’s payroll period and remaining obligations through June 30 are in jeopardy without a $23 million supplemental appropriation — the latest lurch upward on the rollercoaster of ODMHSAS shortfall estimates. (Hours after the publication of this article, Hilbert announced that Friesen had extended the “date for running out of funds” two weeks to May 21.)
In April, Hilbert tasked Lawson (R-Sapulpa) with chairing an investigative committee, which has met three times to hear sworn testimony from a half-dozen witnesses, including Friesen, interim CEO Skip Leonard and Tulsa County District Attorney Steve Kunzweiler.
During Friesen’s testimony April 17, lawmakers asked whether “mismanagement” was to blame for ODMHSAS’ monetary mess, but Friesen said she could not answer that question owing to multiple “investigations” being conducted by the agency’s internal inspector general. Since then, however, ODMHSAS inspector general Dewayne Moore has resigned after 21 years of employment.
“I would like to add a special thanks to our wonderful commissioner, Allie Friesen, deputy commissioner Kim Corcoran, general counsel Christina Green, division director of workplace safety and threat management Damon Blankenbaker, our other leadership members and, of course, my wonderful team of investigators, advocates and auditors for the difference each of you have made in my life,” Moore wrote in a resignation email obtained by NonDoc.
Lawson said he was “deeply concerned” by Moore’s resignation.
“[We] heard testimony recently that there are several ongoing investigations within the department, and this sudden departure is worrisome,” Lawson said. “We will continue to monitor the goings on at ODMHSAS. Despite this news, the House remains committed to executing its duty of delivering a budget to the people of Oklahoma before we adjourn at the end of this month.”
Moore and senior director of communications Kelsey Davis are among the latest high-ranking departures at the agency, which has seen its financial fiasco take center stage during this year’s budget negotiations. Many departing employees have signed settlement agreements aimed at restricting their public comments, Friesen testified, and remaining agency leaders have been encouraged to sign non-disclosure agreements. As news reporting on ODMHSAS issues continued, the agency’s “10th-floor staff” were called to a “mandatory” meeting to discuss the NDAs, security breaches and information leaks April 10 — the same day the Office of Management and Enterprise Services canceled a trio of contracts with nonprofits in Tulsa County amid a heated appeal over changes to the territories of certified community behavioral health centers, or CCBHCs.
Asked by NonDoc whether she has met with FBI agents about those contracts or related matters, Friesen said she was “unable to comment on any ongoing investigations.”
“If you have any questions about federal investigations, you should speak with the FBI directly,” Friesen said through a spokesperson.
While the House investigative committee chose not to ask Kunzweiler the extent to which concerns at the agency — such as allegations of collusion involving the Tulsa County nonprofit contracts — are being criminally investigated, he told NonDoc that his frustrations with ODMHSAS have grown over the years.
“Follow their spending priorities. They allowed all of their infrastructure to decay. They increased salaries and the number of administrative positions to the detriment of their loyal troops on the line. They exclaimed they had ‘no money’ yet lavishly spent it on Super Bowl ads and automated vending machines,” Kunzweiler said. “Their culture of moral corruption, decay, gross incompetence (and) extreme indifference is the very definition of malfeasance.”
As Kunzweiler noted, ODMHSAS drew criticism for spending millions of dollars on Narcan vending machines during the tenure of former Commissioner Carrie Slatton-Hodges, but Friesen’s administration removed them from deployment. On Friday, however, the agency announced it was “strategically redistributing” the controversial vending machines “to high-need communities across the state.”
Friesen also issued a statement regarding the ODMHSAS payroll situation.
“The new leadership team at ODMHSAS is committed to transparency and accountability. As we continue to uncover financial and operational mismanagement and promote a culture shift to one of transparency, we continue to find concerning practices that need to be remedied,” Friesen said. “The department is working with the governor’s office, OMES and the Legislature and they are confident that no services will be interrupted and all team members will be paid on time.”
Follow @NonDocMedia on:
Facebook | X | Text or Email
‘We’re going to have hearings’
In his full email to House members, Hilbert said Friesen told him “she was first made aware of this cash flow issue [Wednesday],” one day after she met with legislative budget leaders to answer questions behind closed doors about what funding ODMHSAS will need to avoid service reductions and reimbursement cuts for mental health providers.
Hilbert wrote to his colleagues:
Apologies for the late night email. I want each of you to have as up-to-date information as I have. Very late this afternoon, Majority Leader Mark Lawson received a call from the ODMHSAS legislative liaison stating they have insufficient funds available to make payroll for Wednesday (May 7) and are $23 million short for the remainder of FY 25. This is the first we have heard from the agency about being unable to make payroll. On March 31, in a meeting in my conference room, I specifically asked if there would be any cash flow issues before the end of May and was assured there would not be.
This evening, I received confirmation via text message from Commissioner (Allie) Friesen that the report Rep. Lawson received from her legislative liaison was accurate. She stated in the text that she was first made aware of this cash flow issue [Wednesday] after 3 p.m.
Obviously, we all have an abundance of questions. I just got off the phone with Pro Tem (Lonnie) Paxton and we agreed to circle up again in the morning to discuss next steps. I will communicate with you all further information as I receive it.
Earlier Thursday, Hilbert told media that the House investigative committee intends to call Friesen to testify again after Tuesday’s lunch meeting failed to foster confidence among legislative leaders. At the time, Hilbert did not know the agency needed an immediate supplemental appropriation to make payroll in May.
“We are going to invite them to come back to testify further,” Hilbert said. “We’re expending public taxpayer dollars, so that conversation should happen in a public environment. And also, frankly, with the time crunch (…) with the scope and the breadth of this problem, I want all 4 million Oklahomans helping us dig into this. So I think the public hearings have been helpful.”
Asked about his conversations with Gov. Kevin Stitt’s office early this week about the prudence of the House’s investigation, Hilbert declined to say whether Stitt asked him to stop the hearings.
“We’re going to have hearings, and we’re going to invite them and look forward to seeing them at the next hearing,” Hilbert said.
By Friday afternoon, Hilbert had released a new statement revealing another change in the information provided by Friesen and announcing a Monday meeting of the House investigative committee.
“We have asked the commissioner to meet publicly with the House Select Committee on Mental Health Monday morning to explain under oath how they have reached this latest number,” Hilbert said. “We are out of time and will not accept any more delays. Individuals at ODMHSAS have known about this shortfall for months yet it is the final month of legislative session and we still do not have answers. This is unacceptable.”
Speaking Tuesday immediately after lawmakers’ private meeting with Friesen, Senate President Pro Tempore Lonnie Paxton said “everybody’s interested” in getting accurate numbers and avoiding cuts to Medicaid reimbursement and mental health services.
“If we need to backfill FY 25, what is that number? And what is the number we need to appropriate to properly run that department. That’s our main thing right now,” said Paxton (R-Tuttle). “We’re trying to work out a budget, but the mental health budget piece is in question, so we’re trying to figure that out. That is of paramount importance.”
By Friday afternoon, Paxton had sent his own email to senators saying that “it appears an emergency vote will be necessary to fund ODMHSAS payroll through the end of FY 25.”
“Unfortunately, we once again find ourselves forced to respond to a crisis created by an executive agency,” Paxton said. “The situation at ODMHSAS is not an isolated oversight. It is just the latest in a long line of failures, and we are left with yet another multimillion-dollar disaster dumped at the feet of the Legislature, and ultimately the taxpayers of Oklahoma. Now, it falls to us to act swiftly and clean up the mess.”
House Appropriations and Budget Committee Chairman Trey Caldwell said Friday morning that Tuesday’s meeting between Friesen and legislative leaders was tense.
“The deeper we dig into the Oklahoma DMHSAS, the more we realize that they lack a basic understanding on governmental accounting principles, and it seems they were using statutorily obligated funds for whatever they wanted,” said Caldwell (R-Lawton).
(Update: This article was updated at 1:35 p.m. Friday, May 2, to include Hilbert’s statement that Friesen shifted the “date for running out of funds from May 7 to May 21. It was updated again at 2:10 p.m. to include a quote from Paxton’s email to senators.)
