Health Department CFO Identified Financial Problems Within Weeks of Starting

Jan 12, 2018

Credit Oklahoma Watch

The chief financial officer of the Oklahoma State Department of Health quickly found out the agency was spending money it didn’t have.

Mike Romero took the job in mid-April. Within two weeks, problems with the agency's payroll came to his attention.

Romero told the House committee looking into alleged financial mismanagement on Friday initial briefings were heavy on narrative and program information and light on financial data, and that he was not in control of financial briefings made to the Oklahoma State Board of Health.

Romero said he was warning executives by July a fund for HIV and AIDS programs was out of money because payroll had been paid from them.

Romero said that spurred then–Chief Operating Officer Julie Cox-Cain to declare she was seizing command of the financial problems, using an incident command system of management commonly used in natural disaster responses.

"The whole thing from beginning to end reminded me of various oppressive, totalitarian regimes in other parts of the world that have nothing to do with this country or the way that we operate with respect to our responsibility to the public and these funds," Romero said.

Romero said agency officials were not interested in his attempts to point out financial problems, and that led him to tell the State Auditor and Inspector’s Office the agency was a fraud risk. In May, Romero's initial accounting standards disclosure to the inspector's office said he was not aware of any risks.

Romero said his conflict with Cox-Cain and other agency officials came to a head in late September at a director’s meeting, where misleading and false remarks were made about the agency’s financial problems.

Romero said Business Planning Director Felesha Scanlan checked on him in his office after he was so upset he didn’t speak in the meeting.

"And I told her, ‘Look. There are serious violations of law occurring here. They are getting very, very serious. We are not telling the truth to the public. There are communications from public officials that are not honest, and I’m not part of that. And I’m not going to support that,'" Romero said.

Romero told the House committee part of the problem with the agency’s finances were state systems can’t catch misspending. Romero said as long as officials made the right moves, they could spend money as though they had one bucket of money, not distinct operational funds.

"I think that what was happening was these folks didn’t even understand that they were going to go bankrupt with this methodology because they didn’t understand how it worked," Romero said. "They just knew that if they wanted to do something, there was going to be money because there always had been."

Federal, state and local investigators are looking into the state health department's financial problems.