A relatively new legislative watchdog office uncovered millions in questionable spending from a deal the Oklahoma Tourism and Recreation Department inked with a local barbecue chain to open new state park restaurants.

That same entity has been credited with spurring changes in how state leaders disperse federal stimulus funds.

And $32.5 million in new funding to eliminate Oklahoma's 13-year wait for developmental disability services can partly be traced back to a report from the office that showed smaller financial investments intended to reduce the waiting list weren't working.

When Republican legislative leaders created the Legislative Office of Fiscal Transparency three years ago, they envisioned an impartial entity to review state agency programs and spending.

They say LOFT has already exceeded their expectations.

LOFT conducts evaluations of state agencies and programs based on legislative priorities, current events and other factors. The evaluations are intended to improve the delivery of state services, boost government efficiency and save taxpayer dollars.

House Speaker Charles McCall, R-Atoka, said LOFT can root out wasteful and duplicative government spending.

"It's the right thing for the taxpayers of Oklahoma that they know that there's accountability on how their tax dollars are being spent and utilized," he said. "I think it's a great entity to help us identify how we can do things better."

Lawmakers wanted independent look at government spending

Senate Pro Tem Greg Treat, R-Oklahoma City, who authored the 2019 legislation to create LOFT, said he had the nonpartisan Congressional Budget Office in mind when envisioning what should be created on the state level.

Lawmakers were wholly dependent on state agencies for details on their budgets and programs, Treat said. The Legislature needed an independent look at state finances rather than having to take agencies at their word, he said.
"We went from being in the dark on a lot of information to getting to see a lot more insight," he said.

Director Mike Jackson has led LOFT since May 2020. His team now includes about a dozen people.

A former lobbyist and executive vice president at the State Chamber, Jackson represented Enid for 10 years in the Oklahoma House that included a two-year stint as speaker pro tempore.

The Legislature appropriates $1.7 million annually to fund LOFT. When lawmakers created the entity, they repealed a similar venture called the Agency Performance and Accountability Commission.

LOFT is better because it's a freestanding entity that's independent of the executive branch and largely free from legislative influence, McCall said. The earlier commission was made up of gubernatorial and legislative appointees.

"You've got $1.7 million annually that's potentially looking at a $9 billion appropriated budget and the federal money that's coming in on top of that, so a total spend of the state that's probably around $22 billion," McCall said. "It's a very small investment and a very high return."

LOFT was modeled off similar offices in New Mexico and Mississippi, Jackson said.

Before publicly releasing its findings, LOFT communicates with the state agency being evaluated and gives the entity a chance to respond. Some agencies have pushed back against or openly criticized LOFT's findings.

But even just asking questions about an agency's strategic vision and program delivery helps, Jackson said.

After LOFT dug into the Tobacco Settlement Endowment Trust, the entity changed some of its programs to spread its grant funding to regions of the state that were not receiving aid, Jackson said. TSET was initially critical of the LOFT report, and questioned why the watchdog office wasn't pushing lawmakers to implement new policies to reduce tobacco use.

Jackson said changes like those at TSET are what motivates him to continue LOFT's work.

"We're not here to seek glory," he said. "We're here to perform a duty and ensure that Oklahoma government and the delivery of that government is transparent and improved, especially from an efficiency standpoint."

What has LOFT accomplished?

The office has released 17 reports that include more than 200 recommendations for state agencies and lawmakers. Some of those suggestions have been put into 21 pieces of legislation, seven of which have become law.

In one of its most noteworthy reports, LOFT raised numerous questions about the Oklahoma Tourism and Recreation Department's contracts with Swadley's Foggy Bottom Kitchen to operate eateries in six state parks.

LOFT determined the agency lost $12.4 million in taxpayer funds because there was insufficient oversight of the now-defunct deal that has since come under scrutiny from the Oklahoma State Bureau of Investigation and a special House committee.

Jackson said he hopes his office never finds anything so egregious again.

"I do think that our report really ... encouraged more questions to be asked, which will ultimately lead to more answers on what happened," he said.

Jackson also said a LOFT report on CARES Act spending ultimately changed how the Legislature is handling federal pandemic relief funds appropriated through the American Rescue Plan. Lawmakers are taking a greater role in spending the latest round of federal relief funds after Gov. Kevin Stitt's administration largely decided how to spend $1.26 billion in CARES Act money.

In a 2021 report, LOFT was critical of how the Stitt administration spent CARES Act funds. Executive branch officials slammed the report as full of inaccuracies and said there was documentation justifying all of the spending.

The Oklahoma Legislature also adopted several LOFT recommendations pertaining to regulating the state's medical marijuana industry.

Lawmakers passed and Stitt approved this year a bill to implement a nearly two-year moratorium on issuing new medical marijuana business licenses.

Other new laws that stem from LOFT recommendations include making the Oklahoma Medical Marijuana Authority a standalone state agency and the agency implementing a secret shopper-style cannabis program. The OMMA has also increased its coordination with other state agencies to regulate medical cannabis.

Treat, who leads the state Senate, credited LOFT with the Legislature's decision to devote $32.5 million in new funding to eliminate the Department of Human Service's developmental disability waiting list.

After LOFT studied local teacher compensation, lawmakers approved legislation touted by Stitt that will allow the state to use some lottery funds to match salary increases offered by local districts to certain teachers. The LOFT report similarly recommended the state set aside funds to help districts fill critical teaching positions.

Some legislative Democrats pushed back on the report that said Oklahoma leads the way in regional teacher pay when adjusted for cost of living and state and local tax burdens. The National Education Association ranks Oklahoma teacher pay at third or fourth in the region, depending on the year in question.

After the report was released, Democratic Rep. Melissa Provenzano, of Tulsa, accused LOFT of inflating the numbers to make it look like "everything is coming up roses" in Oklahoma. Many Republican lawmakers touted the report's findings.

LOFT typically factors in the cost of living when making comparisons across state lines, Jackson said. He also said the National Education Association recommends states factor in the cost of living and a teacher's purchasing power when making salary comparisons.

What's next for the watchdog office?

A member of the LOFT Oversight Committee, Rep. Cyndi Munson, D-Oklahoma City, opposed the creation of the watchdog office because she thought it would duplicate work being done by legislative staffers.

Munson said she appreciates the deep dives into various state government functions and services, but she said the agencies or programs chosen for evaluations feel rather arbitrary. She questioned whether politics were at play in those decisions.

She said she wants to know more about what, if anything, happens after LOFT presents its findings to the oversight committee — a bipartisan and bicameral legislative body that oversees the watchdog office.

The oversight committee should have in-depth discussions about what policy changes should be made based off of LOFT reports, she said. Munson also questioned whether state agencies were changing any of their practices following LOFT evaluations.

"We can't just have these meetings and have these conversations and then it stops there," she said.

LOFT is working on follow-up reports to detail any changes that occurred at agencies or within programs they previously evaluated. Those reports will be complete about a year after the initial evaluation.

Treat said he's hopeful that over time LOFT can do long-term evaluations of policy changes to determine if they were effective.

"As a legislator, one of the things that I have found somewhat frustrating when I look back is I've been able to be a part of improving Oklahomans' lives," he said. "It feels good in the moment, and then you move on to the next fight and the next issue.

"It'll be nice to have a group within the Legislature to look at whether that really hit the target."

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