Secretary of Finance Doerflinger and State Comptroller Lynn Bajema submitted the CAFR to the Governor and the general public which begins with a letter of introduction. Page 7 of the online version, Profile of the Government, begins with this assurance from these two that: “Management of the state, through OMES, is responsible for the accuracy, fairness and completeness of the financial statements presented in this report.”
We now know that the CAFR has serious issues with accuracy at least in regard to the State Department of Health’s finances. Are there more is a fair question and it is clear that these are not the two people that can be trusted to answer that question. Nor do they appear to want to admit that they are responsible for accuracy when even their own letter says they are.
Well maybe the last line of defense—the State Auditor and Inspector Gary Jones’ office----is the place to go for an ‘honest’ appraisal. I refer the reader once again to the CAFR and the enclosed Independent Auditors’ Report. Please read SAI Jones statements in that Report which I will summarize here:
The letter begins with the assertion they have “audited the accompanying statements” with a summary of those they did audit but were done by independent third party auditors. Please note that DoH is not one of those of those and it is represented that it was “audited” by the State Auditor. According to the letter SAI “conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issues by the Comptroller General of the United States.” To wit he comes to the conclusion that “In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the government activities”.
Please find a CPA who is knowledgeable and ask them if these following issues raised by the former CFO Mike Romero make that statement untrue in regards to the DoH: Books that remained unclosed for several years, liabilities created that disregarded existing laws on debt, unreconciled accounts for multiple years and the creation of fictional assets. Then follow up that question with “How difficult is it to spot unreconciled accounts and the fact the books have not been closed for several years?” Their answers will give you the feeling I have right now about this mess!
It gets worse for this last line of defense. OklahomaWatch reported that apparently the SAI has not audited the Department of Health for nearly a decade. Read the state statute for yourself:
“Oklahoma Statutes Citationized, Title 74 State Government, Chapter 8 State Auditor and Inspector, Section 212 Duties and Powers
B. STATE AGENCIES
1. Except as otherwise provided by law, the State Auditor and Inspector shall audit at least once every two (2) fiscal years the books and accounts of all state agencies whose duty it is to collect, disburse or manage funds of the state. The State Auditor and Inspector shall audit a state agency each fiscal year if that state agency is required to be audited on an annual basis pursuant to the federal Single Audit Act of 1984, as amended, 31 U.S.C., Section 7501 et seq. If the state agency is audited only once every two (2) fiscal years, the audit shall cover both fiscal years.”
My sources confirm that an actual audit of DoH has not been done in recent years and the federal Single Audit Act audits that were done and should have caught the allegations of “breached federal funds” were not substantive enough to reach that level even as ‘obvious’ as some of the chicanery was. What part of “the State Auditor and Inspector shall audit at least once every two (2) fiscal years the books and accounts of all state agencies whose duty it is to collect, disburse or manage funds of the state” is not clear?
I think it is time for the legislative committee investigating this travesty to ask for these documents:
1) OMES needs to provide the log of transfers they approved and the work done by their budget analyst when preparing the Governor’s budget in regards to DoH. OMES typically has to give approval for fund transfers and by providing this we will know if they are doing their job and if there are cracks DoH fell through we can close them.
2) SAI needs to provide the work papers on the audits they supposedly did on DoH so that we can judge if they actually performed the procedures that should have caught DoH. Every auditor is required to keep a log of these and other pertinent documents in the audit file for what we call a peer review. This should be a simple process to produce them.
When the watchdogs---OMES and SAI-- have to be watched we are not in a good place as taxpayers.
Opinion of the Editor
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David Van Risseghem is the Director of Sooner Politics.org. The resource is committed to informing & mobilizing conservative Oklahomans for civic reform. This endeavor seeks to utilize the efforts of all cooperative facets of the Conservative movement...