- Associated Press - Thursday, December 14, 2017

OKLAHOMA CITY (AP) - Four employees of the Oklahoma State Department of Health sounded the first alarms about dire financial problems at the agency when they approached auditors conducting a routine review of the agency in early August, State Auditor and Inspector Gary Jones told lawmakers on Thursday.

Jones said he first learned of the problems when the workers told his auditors that they wanted to revise their fraud statements, a routine practice in which Jones says auditors ask employees if they are aware of any potential fraud or financial wrongdoing.

“That pretty much opened up the floodgates,” Jones said in testimony to an Oklahoma House investigative committee.

Jones said he collected information and verified some financial data. By Sept. 1, he had “major concerns” about the agency’s finances and notified Secretary of Finance Preston Doerflinger, he said. The severity of the financial problems became public on Oct. 30, when former Health Commissioner Terry Cline resigned after the board of directors accused him of mismanaging the department’s finances. Republican Gov. Mary Fallin then appointed Doerflinger to take over the beleaguered agency.

An audit of the agency’s finances is underway, the attorney general’s multicounty grand jury is investigating and the Legislature appropriated $30 million during a special session to ensure the agency could make payroll and pay vendors.

The agency also has announced plans to lay off about 200 employees.

Doerflinger has said agency officials for years improperly juggled money between the department’s accounts and expanded the agency’s mission and operations beyond its funding levels. He said agency officials borrowed money across funds, kept accounting periods open for multiple years and improperly spent money on new programs that should have been used to restore previous expenditures.

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