Tuesday, September 01, 2015
Audit: Health Connector board and management wasted and abused millions of dollars in public funds
by Larry Geller
A new audit report and summary has been posted on the Legislative Auditor’s website that sheds more light on the private non-profit’s abuse of public funds (the Auditor’s words, not mine).
The summary is only a single page of easy, but discouraging, reading. You can have it by clicking here. The complete report is here. The title is Audit of the Hawaiʻi Health Connector’s Mansha Contracts: Connector Board and Management Wasted and Abused Millions in Public Funds.
I’ll snip, but really, it doesn’t take much longer to read the whole summary.
Unsaid in the summary at least is that the way the Hawaii Health Connector was created was the idea of our Legislature. As a private non-profit, it was able to operate beyond public scrutiny or control. The Auditor’s full report reminds the Legislature to take care of dismantling it:
The Legislature may wish to consider amending or repealing as appropriate the relevant sections of Chapter 435H, HRS (Hawaii Health Insurance Exchange), to reflect the dismantling of the Hawaii Health Connector.
A snip from the summary:
We found that instead of taking steps to ensure it selected the most qualified vendor at the best price, the Connector awarded Mansha a multi-million dollar contract based on personal recommendations. In total, the Connector awarded $21.6 million in IT contracts to Mansha. The Connector also failed to sufficiently analyze Mansha’s proposed fees to ensure contract amounts were reasonable, as required by federal procurement standards. Thus, the Connector could neither justify its selection of Mansha nor the fixed fees awarded for each of the two Mansha contracts. Furthermore, the Connector executed vague, poorly written contracts with flawed terms and conditions that prevented it from effectively monitoring and evaluating Mansha’s performance.
The former executive director executed a $168,000 contract amendment without the board’s knowledge or approval. In addition, contracts were not amended to reflect changes in scope of work; and amendments that were made were not done timely. This led to higher contractual costs, further wasting public moneys, and could result in federal enforcement action. Such practices constitute abuse of public funds, which involves behavior that is deficient or improper compared to what a prudent person would consider reasonable and necessary business practice in the circumstances.
It's even worse than this. I attempted early on to connect with someone at the Connector about working on the outreach campaign and was flabbergasted to learn who had already received the contract and who was supporting this person. The two people I was finally able to speak with on the phone refused to do one damn thing to assist my effort and I quickly realized I was getting too close to certain people's rice bowl. What an ugly place we live in when money is involved.