New state watchdog criticizes Oklahoma CARES Act spending

OKLAHOMA CITY (AP) — A legislative watchdog has delivered a scathing report on how Gov. Kevin Stitt’s administration spent millions of dollars of federal coronavirus relief on things barely connected to the pandemic, such as technology upgrades for state agencies and a tourism ad campaign.

The newly created Legislative Office of Fiscal Transparency released its draft report late Wednesday. It criticizes CARES Forward — the entity created by the Stitt administration to manage the federal funds — for inconsistent data management, a lack of transparency of expenditures, and incomplete documentation.

“A significant component of relief funds was used for pre-existing needs and government modernization,” the report said. “Several projects under these categories may be at risk for not meeting the federal standards for ‘necessary’ expenses in responding to the pandemic.”

Oklahoma received more than $1.5 billion in funding from the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, but the LOFT report focuses on $1.26 billion that was allocated by the Stitt administration. Among the highlighted spending is $148.7 million to fund state agency IT upgrades, $18 million for updates to ten state welcome centers, and $2 million on an ad campaign featuring Stitt to promote Oklahoma tourism.

“In funding projects indirectly related to the pandemic, CARES Forward missed opportunities to better address outstanding direct needs, such as a more strategic deposit into the Unemployment Insurance Trust Fund and investing in health initiatives like testing and contact tracing to limit the spread of the virus,” the report says.

The CARES Forward team was led by Stitt’s Chief Operating Officer John Budd and former Budget Secretary Mike Mazzei, and included a team of Cabinet secretaries and state employees with expertise in federal grants and auditing.

Budd and Mazzei, who left office in October, pushed back in a letter to the agency last month saying its report “began with findings in mind and was largely an agenda-driven exercise to simply find fault with the work of the CARES Forward Team, perhaps due to the unusual circumstance of the executive branch being given direct authority to expend funds by the federal government.”

In a statement Thursday, the governor’s office said it respects legislative oversight as a critical government funding and plans to continue working with the House and Senate.

“We look forward to meeting with the LOFT Legislative Oversight Committee to discuss our concerns with the current LOFT process,” the governor’s office said.

Stitt has talked about improving his relationship with Republican leaders in the House and Senate, which became strained last year as budget negotiations broke down and lawmakers ended up overriding the governor’s vetoes to approve a budget.