The following excerpts are part of a Department of Health and Human Services Report from the Office of the Inspector General. The report states, “Colorado Did Not Correctly Expend Establishment Grant Funds For Establishing A Health Insurance Marketplace.” The report can be found on the Internet here.
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended, is to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the health and welfare of beneficiaries served by those programs. This statutory mission is carried out through a nationwide network of audits, investigations, and inspections conducted by the following operating components:
Office of Audit Services
Office of Evaluation and Inspections
Office of Investigations
Office of Counsel to the Inspector General
The report explains why the agency did the review–the review was part of a series of reviews of establishment grants for State marketplaces across the Nation. You can read the details if you choose, but the details are not what is important here–what is important is that the Federal and State governments never work as well as the free market.
This is the list of what the review found:
1. The Colorado marketplace did not expend $9,678,635 of Federal establishment grant funds in accordance with Federal requirements. Specifically, the Colorado marketplace:did not adequately document $4,398,333 in costs that it charged to the establishment grants;
2. charged the establishment grants $4,504,799 for unallowable hardware and software operational support and maintenance contract costs whose periods of benefit occurred after December 31, 2014;
3. improperly transferred costs totaling $312,449 from one establishment grant to another without demonstrating that these cost transfers were performed to correct bookkeeping or clerical errors;
4. did not efficiently and effectively administer establishment grant funds totaling $463,054 consisting of improperly awarded executive and employee bonuses, overpayments to subgrantees, unallowable promotional giveaway items, excessive and unreasonable tips, vendor rebates that were received but not credited to the establishment grants, and unallowable social activities;
5. drew down establishment grant funds that it did not immediately use;
6. entered into contracts with consultants and other contractors that did not conform to Federal and State requirements and the Colorado marketplace’s own policies on contract administration, including approval procedures and required contract information; and
7. engaged in a number of procedures and practices that, contrary to Federal requirements and cost principles and, in some cases, to the Colorado marketplace’s own policies, (1) required the use of personal credit cards to purchase equipment, supplies, and services for the marketplace, (2) permitted self-approval of purchases on behalf of the previous executive staff, (3) permitted incomplete and inadequate disclosure of possible conflicts of interest, (4) did not properly document inventory of equipment, and (5) allowed the use of establishment grant funds to purchase equipment for a previous Chief Executive Officer (CEO) who kept it for personal use when the CEO left the organization.
These findings were caused by a lack of adequate stewardship of Federal funds. Specifically, the Colorado marketplace had not developed, finalized, and implemented policies and procedures to ensure that it expended and accounted for establishment grant funds in accordance with Federal, State, and Colorado marketplace requirements.
This is a chart showing the bonuses given:
Ed Morrissey at Hot Air posted an article about this report today.
The article concludes:
Later in the report, the IG explains that this was spent on a holiday party, with “cake, punch, holiday cards, and decorations.” Why the Colorado exchange felt it necessary to charge the federal government for those expenses will be one of the more interesting explanations we’ll hear … if we ever do hear it. At any rate, such expenses are explicitly prohibited from federal grants, as the IG points out in the report.
The whole report is damning for the arrogance of the bureaucracy when it came to spending federal grant money, especially on a flop like ObamaCare. One has to wonder just how many other states have used their federal grant money in such a cavalier manner, and for little purpose in the end.
It might be a good idea to note at this time what the planned future of ObamaCare actually was. Had Hillary Clinton been elected as President, the Democrats in Congress would have acknowledged that ObamaCare had failed and suggested a single-payer (read that ‘government run’) healthcare program similar to what Canada and the U.K. have to replace ObamaCare. When Donald Trump was elected, things got complicated for the Democrats. As I write this, they are fighting to preserve ObamaCare long enough so that it can fail and be replaced by single-payer healthcare. Hopefully the Republicans will not let that happen and will repeal ObamaCare quickly.
Let’s get the government out of healthcare.