Oklahoma mental health department ‘has a long-standing issue' with proper accounting: LOFT
State Rep. T.J. Marti, R-Broken Arrow, whispers with Rep. Anthony Moore, R-Clinton, during a special legislative hearing probing the finances of the Oklahoma Department of Mental Health and Substance Abuse Services on Monday. (Photo by Janelle Stecklein/Oklahoma Voice)
OKLAHOMA CITY — The state's mental health department should go back to budgeting basics and build out guidelines for the services it must provide, the head of a legislative fiscal oversight agency said Monday.
Regina Birchum, executive director of the Legislative Office of Fiscal Transparency, said the Department of Mental Health and Substance Abuse Services is treating its appropriations as 'fungible,' or interchangeable, making it difficult for officials to make sense of how it is being spent.
Of the 195 accounts the Department of Mental Health budgeted for in fiscal year 2024, a LOFT analysis found that 115 were over budget, while 66 were under budget. In all, over $29.3 million was overbudgeted, while about $57.6 million was underbudgeted.
'I would say this is an agency that has a long-standing issue with proper accounting of funds,' Birchum said. 'We're not saying anything improper was done. We're saying that funds are not properly accounted for in such a way that an outsider can determine what they were spent on, and it's our hope that we can make some recommendations that will bring some clarity to them.'
Birchum made her comments under oath during the third day of testimony during a special hearing at the state Capitol where House lawmakers continue to probe reports of financial disarray at the mental health agency as well as why some provider contracts were abruptly cut or canceled. Lawmakers were frustrated at a lack of answers from mental health officials during the first two days of testimony. But at the conclusion of Monday's hearing, some said LOFT helped shed some light on spending and budgeting practices.
Birchum said her agency has been investigating the mental health department at the Legislature's request since early March. In particular, it has been probing the mental health department's reported $43 million deficit and whether the agency's $6.2 million supplement request will be enough to finish the fiscal year.
LOFT assists the Legislature in finding factual information about budgets to hold agencies accountable for properly spending funds.
Birchum said the mental health officials initially believed they had a $63.7 million shortfall, but later found $19.6 million that could be used for Medicaid reimbursements and another $10.5 million in contract savings. That reduced the overall deficit to $33.6 million.
LOFT records indicate investigators were unsure where the remaining $27.4 million would come to reach the $6.2 million figure, but noted the mental health department continued to work on its budget review.
She said the agency's $6.2 million supplemental request includes funding to bridge revenue shortfalls for two different facilities and $4.1 million to cover costs related to the recent mental health competency restoration settlement agreement. The later funding was already appropriated by lawmakers, she said.
Birchum said LOFT was also told that all initial cuts to providers have been restored.
Rep. T.J. Marti, R-Broken Arrow, said after the hearing that lawmakers expect to have some firm budget numbers this week from the mental health department, but said putting caps on what providers can charge for some crisis services could help provide more budget certainty.
Rep. Mark Lawson, R-Sapulpa, who chairs the special committee, said LOFT provided needed detail about the mental health department's 'poor accounting practices' that 'lends to the inability to produce real numbers.'
Lawmakers only have 22 working days left in session. Lawson said the committee needs to quickly determine the current financial picture of the mental health department, if a $6.2 million supplement appropriation will be enough, and what sort of budget the agency needs moving forward.
'I feel much more confident that we could work together to put something together that we feel like has some fidelity to it, but it's certainly concerning that we're this far into session, and we don't have the clarity that we need to do our job,' he said.
Lawson said there likely will be some legislation that emerges from the hearings. Some additional testimony may be conducted behind closed doors because it 'may be of a protected nature' under non-disclosure agreements, he said.
If time allows, the committee may require the state's mental health commissioner to testify again.
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