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Audit finds conflict of interest at state health department

Employees were members of board contracted by the state
State auditors on Tuesday identified a conflict of interest after health department employees served on the board of an immunization nonprofit that was contracted by the state.

DENVER – Three state health department employees served on the board of an immunization nonprofit with which the department contracted, highlighting a conflict of interest.

The problematic situation – which lasted for five years – came to light Tuesday after state auditors investigated an immunization program within the Department of Public Health and Environment.

The program oversees immunization records and tracking, as well as school immunization requirements.

Several Republicans last year tried unsuccessfully to reaffirm Colorado law, which allows parents to opt their children out of immunization requirements. Colorado has some of the nation’s most lax vaccination laws.

The audit says three health department employees – between 2010 and 2015 – served on the board of the Colorado Children’s Immunization Coalition, an organization that advocates for vaccination policies. The coalition works on outreach for the department.

The health department’s immunization program receives federal and state funds, including Tobacco Master Settlement Agreement funds and tobacco tax funds, totaling about $52 million annually.

The department contracted with the coalition using tobacco settlement funds. It awarded $1.8 million in contracts to the coalition from November 2008 through July 2015. From 2012 through 2014, more than half of the vendor’s revenue came from health department contracts.

Given that department personnel were members of the vendor’s board, state auditors raised concerns about a conflict of interest. The Colorado Constitution states that government employees should avoid conflicts of interest to ensure that the state obtains maximum value.

“These three staff members either played a direct role in approving or monitoring contracts with the vendor, oversaw staff who approved or monitored the contracts, or were involved in approving the procurement,” the audit states.

One employee was Dr. Rachel Herlihy, director of the Disease Control and Environmental Epidemiology Division, which oversees immunization efforts in Colorado.

Herlihy said she served as a non-voting volunteer on the board, as an ex officio member or a member who served because of her expertise.

“I certainly followed the guidance of my leadership and brought to the attention of my leadership some of these concerns,” Herlihy told the Legislative Audit Committee.

Dr. Larry Wolk, executive director of the health department, said having staff members on the vendor’s board was an effort to foster good public policy.

“It was the desire of the nonprofit organization to continue to have the department involved so that we would have a collaborative relationship,” Wolk said.

Wolk said staff members are no longer on the nonprofit’s board and the department is revising its conflict-of-interest and procurement policies.

Stephanie Wasserman, executive director of the Colorado Children’s Immunization Coalition, said: “The CCIC board of directors abides by strict ethical funding and legal standards ... to maintain continued financial stability and public trust.”

But Republican Sen. Tim Neville of Littleton, who sponsored the vaccination opt-out parental rights legislation last year, is concerned. He can’t understand why Herlihy remains director of the division.

“It’s pretty bizarre,” Neville said. “She participated on that board, and she broke the conflict-of-interest rules and also they violated the Colorado Constitution.”


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