OKLAHOMA CITY (OBV) – The Oklahoma Department of Mental Health and Substance Abuse Services’ financial practices are under intense scrutiny with multiple investigations being conducted.
An Oklahoma House of Representatives select committee that was created to review finances at the Department of Mental Health held its first hearing on Thursday
State Auditor and Inspector Cindy Byrd is performing a forensic audit of the Department of Mental Health.
The Legislative Office of Fiscal Transparency (LOFT) is reviewing existing contracts and finances to provide a third party perspective on how the Department of Mental Health has handled state-appropriated money.
Those investigations are in addition to Gov. Kevin Stitt appointing a special investigator to probe the Department of Mental Health’s spending and contracting practices.
The select committee is reviewing the following issues:
- Reports of using current fiscal year funds to cover prior year expenses
- The cancellation of Certified Community Behavioral Health Clinic (CCBHC) contracts and its impact on service continuity
- The agency’s request for FY25 supplemental funding
- The unexplained allocation of $5 million for an electronic medical records (EMR) system that was never implemented
- Long-term budget planning for FY26
- Updates related to the federal court-ordered consent decree impacting ODMHSAS
“With just over a month remaining in the legislative session, this investigation is a top priority,” said House Speaker Hilbert, R-Bristow. “Our goal is to understand the department’s financial practices, ensure accountability and determine whether additional funding is truly necessary before the session concludes.”
House Majority Leader Mark Lawson, R-Sapulpa, is the committee’s chair.
“This is a critical moment for mental health services in Oklahoma,” Lawson said. “We must balance compassion with accountability and ensure those in crisis receive the help they need, while taxpayers can trust their dollars are being spent wisely.”
Allie Friesen, commissioner of the Department of Mental Health, testified before the committee on Thursday. Tulsa District Attorney Steve Kunzweiller, Tulsa Police Officer Lt. Amber McCarty and Tulsa Police Officer Lt. Amber McCarty also testified.
“Likely, within the last year and a half, I have shared a similar concern and questions,” Friesen said regarding concerns over the Department of Mental Health’s finances. “I am hopeful we all will leave today with clear alignment as to the current situation of the Department of Mental Health and Substance Abuse Services, how we got here and where our vision is moving forward.”
The Department of Mental Health has a $43-million deficit, according to Friesen. She said that amount was reduced from an originally discovered $63-million shortfall.
The deficit was discovered in February, Friesen said.
“We were alerted that there was some potential concerns with our Title 19 funding, and that we may be short of the amount of funds that we really needed this fiscal year, FY25,” she said.
Friesen was asked if she could identify the source of the deficiency.
“The initial concern was that the true amount that the department required was not originally requested. At a high level, it seems as if, historically, the required Title 19 funds that the Department of Mental Health needed in order to pay the Healthcare Authority for our portion of the costs was not adequately requested,” she said.
Friesen said her goal is for the Department of Mental Health to be a reliable, accountable and transparent organization.
“Unfortunately, that is not what this administration inherited,” she said. “We realize that the communications and the coverage and the rumors that are flying around are not positive. And we have been very open with that. We want to shine a light on the things that have been seen before. And that is not to have some kind of witch hunt, that’s not to get anybody in trouble. That is to fix the system so that we can be accountable, and that this legislative body feels comfortable and confident in appropriating dollars [to the Department of Mental Health and Substance Abuse Services], knowing that they are going to where they are supposed to go.”
She said the situation at the Department of Mental Health has been and still is “chaotic.”
“Frankly, we are moving towards a much more stable, confident place as an organization,” she said.
The hearing went over the following issues:
- The current financial condition of the ODMHSAS
- The unknown use of specific fund allocations such as the $5 million allocated for upgraded electronic medical records system, which was never implemented
- The use of current year appropriations to pay prior years expenses
- Cancelled CCBHC contracts
- The department’s need for a FY25 supplemental to fulfill its financial obligations in the current fiscal year and the amount needed to do so
- Future budget needs for FY26
- The current state of the federal court-ordered consent decree on the Department of Mental Health
Friesen said she’s not a politician and has failed to “understand how all these pieces fit together.”
“I own that and am trying to learn from smarter people around me as to how to better navigate through that,” she said. “My priority has been and will always be ensuring access to high-quality care. We have made mistakes and we have tried to quickly own those mistakes as quickly as humanly possible.”
Stitt began pursuing an investigation following “disturbing discoveries” related to the previous ODMHSAS leadership’s finances and contracting practices.
“I’ve had frustrations with the mental health department for years and now that we have Commissioner Allie Friesen putting a fresh set of eyes on the department, it’s clear there are problems that need special attention,” Stitt said. “What we need is an independent third party who can focus all their energy on shining light on this agency and rooting out bad actors.”
Stitt’s investigation will look into every aspect of the Department of Mental Health, including its finances, employment records and contracting practices to see if any laws were broken, according to officials from the governor’s office.
Stitt spoke about ordering an investigation during his weekly news conference, last week. He said Friesen found points of concern after she fired the Department of Mental Health’s chief financial officer as well as other lieutenants within the agency.
“Sometimes, when you have people at agencies who have been there for 30-40 years, they’re moving the ball pretty good, they understand how this building works and they’re paying every invoice so nobody squawks,” Stitt said.
Stitt then referenced Elon Musk, who has become a source of controversy for his cuts to federal agencies through the Department of Government Efficiency (DOGE). President Donald Trump created DOGE and empowered Musk to run it.
“If you listen to what Elon said – and I totally can see it – when he’s talking about DOGE, the best way to make sure nobody makes ripples is to just pay every single invoice, right,” Stitt said.
Stitt said Friesen is trying to make the Department of Mental Health more efficient and focus spending where it needs to go.
“You’re seeing the bureaucracy kick and scream as she is actually putting a spotlight on this stuff,” Stitt said. “I tell people, ‘Let’s shine a light on some of these dollars. Let’s see where all the mice scatter to. That’s what you’re seeing right now – the rats are running and they’re screaming.”
The Governor said some contracted mental health providers are charging the state exorbitant sums.
“The numbers that I have seen, we have some providers charging the state, on the mental health side, up to $6,700 per patient, per month. And then some are charging $2,700. That’s a question we’re all digging into,” Stitt said. “If you’re in business and you can bill the state, and [the state] automatically pays it out without asking questions, that’s a pretty good business model. If you’re [a] business and can send unlimited invoices and get paid, I bet you some of those businesses get pretty good at figuring out how to continue to bill the state.”
Friesen said Stitt is firmly behind implementing accountability and transparency in the Department of Mental Health.
“My top priority is the well-being of the Oklahomans in our care, and I want to get everything out in the open so we can focus back in on our core mission. The department welcomes this investigation and will fully cooperate,” Friesen said.
Stitt’s special investigator will have access to all records except health information, governor’s office officials said.
The House select committee will continue to conduct hearings over the coming weeks, with the following individuals testifying:
- Skip Leonard – Interim CFO, ODMHSAS
- Regina Birchum – Director, Legislative Office of Fiscal Transparency
- Aaron Morris, CFO, State of Oklahoma
- Barrett Brown – Former Chief of Staff, ODMHSAS
- Janet Cizek – CEO, Community Treatment Integrations of Oklahoma
- Jon Greenwood – CEO, Gateway to Prevention
- Adam Andreassen – CEO, Family and Children’s Services
- Amanda Otis – Purchasing Director, State of Oklahoma
