A special Oklahoma House of Representatives committee spent nearly four hours exploring budget shortfalls, contract cancellations and the Oklahoma Department of Mental Health and Substance Abuse Services' request for additional funding Thursday afternoon.
House Speaker Kyle Hilbert, R-Bristow, called the hearing after the state mental health agency requested a supplemental $6.2 million appropriation, just weeks before the end of session.
"This is a critical moment for mental health services in Oklahoma," committee chair Rep. Mark 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."
Commissioner Allie Friesen, who has overseen the department since January 2024, was the main subject of interrogation, spending at least two hours fielding questions from lawmakers.
During her opening remarks, she described the department's current status as "chaotic" and said the past few months have been "painful and arduous" for her leadership and community providers alike, illustrated by the fact that four investigations into the department are underway.
Friesen said she welcomes the scrutiny.
"What this administration will not tolerate is, 'make it look good and don't show anybody the bad,'" she said.
Addressing the budget shortfall
Friesen said she was first made aware of a budget deficiency at the end of February, about a month after presenting to the House and Senate about the agency's financial standing.
She said the agency's deficit totals $43 million, a figure confirmed by interim department CFO Skip Leonard and State of Oklahoma CFO Aaron Morris, who have also been called to testify before the board. While initially expected to be closer to $63 million, Friesen said further investigation and internal operation optimizations were able to bring the number down.
Friesen did not provide an exact list of reasons why the shortfall occurred, but did point to previous leadership, including the agency's former chief financial officer, Richard Edwards. She also said, while the legislature met last year's appropriation request, she expects the agency was not being honest about its needs.
Under her supervision, Friesen said a new culture of "transparency" is being introduced to the department.
"The lack of responsiveness to this culture shift, frankly, is one of the driving reasons that there are people that are no longer with the organization," she said.
In total, four staff members left the agency in December and were asked, but "not required," to sign what Friesen referred to as both "nondisclosure" and "settlement agreements" during the meeting.
The committee requested to see the agreements, and Friesen said she would share them, pending a review of their confidentiality requirements.
Contract cancellations
Last week, three behavioral health care service providers in Tulsa received notice their contracts with the department were being terminated, effective May 10. The termination letters were sent by email from the Office of Management and Enterprise Services, or OMES.
Friesen, who maintained the letters were not related to the budget shortfall, said the emails were a result of "miscommunication and misunderstanding." She said the department only became aware of the cancellations after one of the affected service providers contacted her office.
"So, it's your testimony that OMES acted unilaterally outside of the purview of the department to cancel those contracts?" Speaker Pro Tem Anthony Moore asked Friesen.
Friesen said she, nor her general counsel, who had been on a "well-deserved two-week vacation," were aware the letters were issued to GRAND Mental Health, CREOKS and Family & Children's Services.
She said the timing and "wording" of the letters were unfortunate, given the legal matters already underway with service providers in Tulsa.
Tulsa County District Attorney Steve Kunzweiler, who spoke after Friesen, questioned her authenticity.
"There was only three [providers] that got the cancellation notices," Kunzweiler said. "All three happened to be the ones that were involved in challenging a [request for proposal]."
Kunzweiler is referring to an ongoing dispute filed by Family & Children's Services, joined by CREOKS, claiming GRAND Mental Health was given an unfair advantage during a proposal request process before Friesen took charge.
Tulsa-area service providers are also on the other side of a historic federal lawsuit against the department, he said. The lawsuit claims the department has failed to fulfill its responsibilities to the state's incompetent criminal defendants, and Kunzweiler fears this has made Tulsa a target.
Community impact
"What's your team's plan on going forward in stabilizing what has already been done out in the field right now?" Rep. Dell Kerbs, R-Shawnee, asked Friesen, referring to staff cuts and the culture of confusion that has ensued from departmental drama.
Friesen said some state behavioral health care facilities are making changes without the department's request.
"There are some providers that made decisions independently, to lay off staff, to close facilities, and we were not notified of that," Friesen said. "Some we learned about through [the] media. And as soon as we realize that, we're obviously very concerned and we don't want that to happen."
But lawmakers pressed her. They claimed that service providers had insisted Friesen told them she could not request a supplemental payment to fill the budget gaps.
"I do not believe those words came out of my mouth," Friesen said. "What I may have communicated is that certainly it's not a fun ask to make to anybody, including the legislature as a whole."
What happens next
Eight other witnesses, including executives of provider organizations in Tulsa, have also been called to testify before the committee.
Lawmakers expressed gratitude for those who have already spoken, but say they never want to be in this position again.
"It is our main intention to avoid being in a similar situation like this, with any state agency, moving forward this close to the end of session when we're heavily involved in budget negotiations anyway," Lawson said.
Other investigations into the department will continue.
This report was produced by the Oklahoma Public Media Exchange, a collaboration of public media organizations. Help support collaborative journalism by donating at the link at the top of this webpage.
