An internal audit of Connect for Health Colorado found millions of dollars in mistakes, the latest in a string of audit reports showing poor financial controls at the state health insurance exchange last year.
The audit, presented to the exchange board Monday, found questionable costs of as much as $12 million — most described as “material weaknesses” in internal controls.
The $12 million includes $5.6 million paid for future software maintenance that will fall outside the period of the federal grant. Auditor Steve Corder said the exchange might have to reimburse the federal funds.
Connect for Health CEO Gary Drews said the exchange had received permission from the federal Centers for Medicare and Medicaid Services to use the grant to purchase future support services. But CMS later amended its erroneous decision, he said.
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He said the exchange is looking at spending the money during the grant period for something else.
The exchange also mishandled more than $6 million in pass-through federal grants to subcontractors, according to auditors. The exchange lacked procedures for proper monitoring of the funds, the report said.
Board member and finance committee chairman Arnold Salazar said the report was “a fair and accurate representation of where we are financially.” It reflected weakness in accounting practices and internal controls, he said which staff has been working to fix in recent months.
Corder told the board that auditors found understaffing of the organization related to accounting, which even made doing the audit difficult.
Date: March 23, 2015