Oklahoma Department of Corrections officials grossly underreported the amount of cash held in two key agency funds to Gov. Mary Fallin as she was preparing her state budget recommendations for each of the past two years, documents obtained by The Oklahoman reveal.
It's “clear that the manner in which the DOC accounts for its funds needs to be more accurate, more transparent or both,” Fallin administration spokesman Alex Weintz said in a prepared statement Wednesday.
“The governor is not comfortable giving the agency more resources until it has thoroughly investigated these issues.”
Corrections officials reported to the governor that the agency had a balance of $7,452,758 in its main revolving fund and $615,250 in its Inmate and Employee Welfare Fund as of Dec. 28, 2011, records reveal.
However, financial records maintained by the state Office of Management and Enterprise Services show the agency had more than $12.3 million and $3.1 million, respectively, in those two accounts at the end of December 2011.
A year later, corrections officials reported to the governor that the agency had balances of $6,758,840 and $1,441,842 in the two accounts, while state Office of Management and Enterprise Services documents indicate the agency had more than $13.6 million in the main revolving fund and more than $3.7 million in the other fund at the end of December 2012.
The documents prepared by corrections officials understated by millions of dollars the amount of money the agency had available to meet various expenses without additional appropriations from the Legislature.
Justin Jones, director of the Corrections Department, was unavailable for comment Wednesday.
Asked about the discrepancies, Greg Sawyer, the corrections department's chief of business operations, said he was told by the agency's chief financial officer that the department had provided the governor with an “estimate of income to the fund” rather than providing cash balances.
“He (the chief financial officer) said there was confusion over what the OMES analyst said they wanted in the survey, so he gave them an estimate of the income,” Sawyer said in an email.
Preston Doerflinger, director of the Office of Management and Enterprise Services, said he believes the governor's request was clear.
“One of two things happened,” Doerflinger said Wednesday. “Either they misunderstood a very simple question or there is a significant — I would say gross — underreporting of what the balances were in these accounts.”
“That concerns me even more,” Doerflinger said, after being read Sawyer's explanation. “Not understanding what balance means — which is cash available.”
Doerflinger said he is thankful that former State Auditor Steve Burrage is on the Corrections Department's governing board because he believes Burrage will get to the bottom of the issue.
“The bottom line is we need good, accurate information from the agencies to be able to make responsible decisions,” Doerflinger said. “If we can deal accurately with each other, then we can best deploy the resources that we have….There's no question that the DOC has needs, but the problem is when you've got monies sitting in revolving accounts that appear to not be accurate and that they're not utilizing appropriately, then how best are we to know and what confidence are we to have in taking into consideration the need for additional resources.”
Doerflinger said the governor would love to see improvement in prison programs and pay for correctional officers, but currently “we have little confidence in the accounting practices that are occurring at the Department of Corrections.”
Weintz said it is now clear to the governor that “the Department of Corrections has millions of dollars in revolving funds to address its immediate needs.”
“Governor Fallin knows there are many hardworking public servants at DOC, and she respects the work they do,” Weintz said.
“Their leadership has not served them well by failing to fully and accurately disclose the agency's finances.”