State audit finds Hawaii Health Connector wasted $11 million

HONOLULU (AP) — The Hawaii Health Connector is being criticized for the second time by the state auditor for wasting taxpayer dollars.

In a follow-up report released Tuesday, state auditor Jan Yamane repeated criticism about the state health insurance exchange’s officials improperly awarding contracts and wasting more than $11 million, The Honolulu Star-Advertiser reports (https://bit.ly/1Q7XWyT). In an initial audit in January, she said officials didn’t follow proper procedures for awarding contracts, which puts federal grants at risk.

In particular, the audit is highly critical of a $21.6 million contract with Mansha Consulting LLC, who supervised the work of the Connector’s IT developer. The developer, CGI Group Inc., was paid $74.2 million but delivered a system that was plagued by problems and opened two weeks late in October 2013.

Mansha officials said that the company is owed $4.2 million and was forced to lay off workers after the Connector stopped payments. The Connector said it paid the vendor $14.7 million before cutting off payments and launching an investigation into the company’s performance.

Connector officials said the agency has improved practices over the past year, and that there are errors and inconsistencies in the audit, including the $11 million figure.

“The numbers the auditor used in the report don’t tie to any numbers the Connector supplied to them,” said Executive Director Jeff Kissel. “I don’t know where they got that. The problem is they didn’t review this draft before publishing. If they had, we could have helped them. We disclosed all information about Mansha in public testimony at the Legislature and in public board meetings. Therefore this is not only a rehash of old news to grab new headlines, I would question the wisdom of the auditor’s choice to spend new state resources on this kind of activity.”

The Connector is in the process of transitioning operations to the state and will direct future health care enrollees to the federal healthcare.gov website.

Yamane acknowledges that much of the information in the audit is dated because the Connector operations began to unravel in the middle of the auditing process.