Health Depart­ment shifted fed­eral HIV/AIDS money to other pur­poses

The Oklahoman (Sunday) - - FRONT PAGE - BY BRI­ANNA BAI­LEY AND DALE DENWALT Staff Writ­ers

Over a pe­riod of sev­eral years, the state Health Depart­ment shifted some fed­eral money into pro­grams it was never in­tended to fund.

Now of­fi­cials say the state Health Depart­ment faces a $30 mil­lion fund­ing short­fall this year, which could grow if the agency has to re­pay the fed­eral gov­ern­ment.

In Au­gust, the state Health Depart­ment was forced to end an $8.5 mil­lion pro­gram with the Ok­la­homa To­bacco Set­tle­ment En­dow­ment Trust that funded grants for things like lighted walk­ing trails at city parks and school play­ground equip­ment across the state, records show.

The state Health Depart­ment ended the grant pro­gram after it came dan­ger­ously close to missing a pay­ment for a fed­er­ally funded pro­gram to help treat HIV and AIDS patients.

Since 2011, the state Health Depart­ment has spent $4.9 mil­lion on the Cer­ti­fied Healthy Ok­la­homa pro­gram. The state Health Depart­ment con­tracted with TSET to ad­min­is­ter the grants and pro­mote the pro­gram.

Over the past five years, the Cer­ti­fied Healthy Ok­la­homa pro­gram has pro­vided schools and cities with more than $2.5 mil­lion in grants to pro­mote fit­ness and health. The grants are pro­vided as in­cen­tives for im­ple­ment­ing well­ness poli­cies like ban­ning smok­ing on city prop­erty and in­creas­ing op­por­tu­ni­ties for phys­i­cal ac­tiv­ity.

As part of the pro­gram, the city of Ada was awarded a $100,000 grant in 2015 to in­stall new light­ing and emer­gency call boxes on a mu­nic­i­pal walk­ing trail. Ru­ral school dis­tricts in Po­rum and Warner used grant money for things like new drink­ing foun­tains, phys­i­cal ed­u­ca­tion and play­ground equip­ment.

With its fi­nances rapidly un­rav­el­ing in Au­gust, the state Health Depart­ment abruptly ended its fund­ing of the Cer­ti­fied Healthy Ok­la­homa pro­gram. The state Health Depart­ment also asked TSET for the im­me­di­ate re­turn of $3 mil­lion so it could re­pay money owed to a fed­eral HIV and AIDS pro­gram, Do­er­flinger said.

At a news con­fer­ence last week, In­terim Health Com­mis­sioner Pre­ston Do­er­flinger, who has been tasked with help­ing to un­tan­gle the state Health Depart­ment’s com­pli­cated fi­nances, ac­knowl­edged that the agency had bor­rowed be­tween dif­fer­ent pots of money to fi­nance cer­tain pro­grams, in­clud­ing funds that were sup­posed to be re­stricted for a spe­cific use.

“These ac­tions were tak­ing place in or­der for the agency to pur­sue var­i­ous and costly pro­grams beyond the agency’s core pub­lic health ini­tia­tives,” Do­er­flinger said.

Au­dits pointed out prob­lems

State au­di­tor re­ports dat­ing back to 2015 pointed out prob­lems with the state Health Depart­ment’s han­dling of fed­eral money, records show.

A state au­dit of fed­eral funds that year found the state Health Depart­ment was not rec­on­cil­ing ex­pen­di­tures with the Of­fice of Man­age­ment and En­ter­prise Ser­vices in a timely man­ner, with as much as six months lag time on monthly re­ports. Rec­on­cil­i­a­tion is an ac­count­ing process to en­sure fi­nan­cial records are ac­cu­rate. The au­dit also found prob­lems with the state Health Depart­ment’s han­dling of fed­eral funds from the U.S. Depart­ment of Agri­cul­ture for nu­tri­tional pro­grams.

“Unal­low­able ac­tiv­i­ties and/or costs could oc­cur and not be de­tected when timely rec­on­cil­i­a­tions are not performed,” the au­dit found.

Fed­eral money for pub­lic health pro­grams makes up the bulk of the state Health Depart­ment’s an­nual bud­get. Of the agency’s cur­rent

$393 mil­lion bud­get, $235 mil­lion (57 per­cent) is fed­eral money. Just 16 per­cent of the state Health Depart­ment’s cur­rent fund­ing, about $63.5 mil­lion, is from state ap­pro­pri­a­tions.

Shift­ing money

Cash flow prob­lems at the state Health Depart­ment came to a head ear­lier this year when the depart­ment missed pay­ments on in­voices for a fed­er­ally funded HIV and AIDS treat­ment pro­gram.

The Ryan White HIV/ AIDS Pro­gram helps pay for in­surance premi­ums and med­i­ca­tion for HIV and AIDS patients. It is the­largest fed­er­ally funded pro­gram for peo­ple with HIV.

The fed­eral Health Re­sources and Ser­vices Ad­min­is­tra­tion, which ad­min­is­ters the Ryan White pro­gram, be­came aware over the past sev­eral months that the state Health Depart­ment had un­paid in­voices for HIV care and treat­ment that it should have had enough money to cover, said Martin Kramer, a spokesman for the agency.

The Ok­la­homan has filed an open records re­quest to find out the amount of the un­paid in­voices. Kramer would only say the un­paid amount was “less than $2 mil­lion.” The money has since been re­paid.

Do­er­flinger said is­sues with fund­ing for the Ryan White pro­gram led to the dis­cov­ery of deeper fi­nan­cial prob­lems within the agency.

“That was a cat­a­lyst for a lot of this,” Do­er­flinger said.

The state Health Depart­ment had reached a point ear­lier this year when it was about to miss a pay­ment on a health in­surance pre­mium as­sis­tance pro­gram for HIV and AIDS patients, Do­er­flinger said.

At the state Health Depart­ment’s re­quest, TSET im­me­di­ately re­turned $3 mil­lion from the Cer­ti­fied Healthy Ok­la­homa pro­gram in Au­gust, ac­cord­ing to agency records.

The state Health Depart­ment used the money re­turned from TSET to re­pay the Ryan White HIV/AIDS pro­gram, Do­er­flinger said.

“It was a very crit­i­cal time, but it just got them through that,” Do­er­flinger said.

TSET will con­tinue to eval­u­ate the ef­fi­ciency of the Cer­ti­fied Healthy Ok­la­homa grant pro­gram and its fu­ture fund­ing, Ex­ec­u­tive Di­rec­tor John Woods said in a state­ment.

“While we value the part­ner­ship with the Ok­la­homa State Depart­ment of Health, we rec­og­nize the dif­fi­cult bud­getary sit­u­a­tion they are in and un­der­stand the depart­ment needed ad­di­tional funds to carry out the work,”

Woods said.

In a let­ter to TSET dated Aug. 8, for­mer Se­nior Deputy Health Com­mis­sioner Julie Cox-Kain ac­knowl­edged that state Health Depart­ment fund­ing for Cer­ti­fied Healthy Ok­la­homa grants had con­tin­ued although a con­tract for the pro­gram ex­pired in 2013.

Cox-Kain blamed the end of the state Health Depart­ment’s fund­ing for the grant pro­gram on dwin­dling state and fed­eral fund­ing.

“In ad­di­tion to state re­duc­tions, de­clines in fed­eral rev­enue place in­creased bud­get pres­sure on the state Health Depart­ment to the point we can no longer sus­tain our cur­rent pro­grams,” she wrote in the let­ter.

Cox-Kain re­signed in Oc­to­ber along with Health Com­mis­sioner Terry Cline as bud­get prob­lems at the agency con­tin­ued to mount. At­tempts to reach her were un­suc­cess­ful.

It was not un­til Sept. 27 that the state Health Depart­ment pub­licly ac­knowl­edged its fund­ing prob­lems and an­nounced plans for lay­offs and work fur­loughs.

The state Health Depart­ment is now seek­ing $30 mil­lion in sup­ple­men­tal fund­ing from the Ok­la­homa Leg­is­la­ture. With­out ad­di­tional money, the agency will not be able to pay its em­ploy­ees by the end of Novem­ber, Do­er­flinger said last week.


The Ok­la­homa State Health Depart­ment is in Ok­la­homa City. Of­fi­cials say the depart­ment faces a $30 mil­lion fund­ing short­fall this year, which could grow if the agency has to re­pay some fund­ing to the fed­eral gov­ern­ment.

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