DENVER – Federal auditors say Colorado should repay nearly $9.7 million for grants used to set up the state’s health care exchange after concluding that the money was misspent or not properly accounted for.
The audit released by the U.S. Department of Health and Human Services found that Connect for Health Colorado, set up as part of President Obama’s health care law, didn’t sufficiently document how it spent about $4.4 million on contractors and consultants, The Denver Post reported Wednesday. Auditors also accused the exchange of allocating $4.5 million from the grants to pre-pay for contracts that would run past the end of 2014, the time by which all grant money was supposed to be spent.
The audit covers fiscal years 2012 through 2014 and looked at how the exchange spent $183.7 million it received from three federal grants to set up the program. The $9.7 million the audit is recommending be repaid is about 5 percent of the total grant funds.
In addition to failing to sufficiently document payments for subgrantees and travel expenses, the audit also found that Connect for Health Colorado spent more than $211,000 on bonuses for executives and other employees without providing required documentation of their performance evaluations.
Luke Clarke, a spokesman for Connect for Health Colorado, said the exchange agrees with some of the audit’s findings involving documentation, and it has a new management team that has put in place new policies to better document spending.
“It’s been identified, and we’ve acted on it,” said Clarke, who blamed some of the problems on murky federal guidance that exchange officials received while trying to set up the marketplace.
But the exchange disputes how much money it should have to pay back.
Clarke said that after an internal audit identified problems with contracts running past the end date for the grants, the exchange took the money for those contracts and moved it back into the available grant funds. It then paid those contracts with other money.
The audit is one of several that Health and Human Services has conducted of state-run exchanges. An audit of New York’s exchange, for example, recommended that it pay back up to $150 million in grant money, while an audit of Nevada’s exchange found less than $1 million in questionable spending.
