Tuesday, December 5, 2023
Hawai'i Free Press

Current Articles | Archives

Thursday, January 29, 2015
Procurement Violations: Feds May Demand Hawaii Health Connector Repay Grant
By Hawaii State Auditor @ 4:47 PM :: 4195 Views :: Health Care

Audit of the Hawai‘i Health Connector

Inadequate planning and improper procurement led to an unsustainable Health Connector

Board of Directors’ inadequate planning led to an unsustainable health exchange

Hawaii State Auditor Report No. 15-01, January 2015

The Hawai‘i Health Connector Board of Directors and management could not agree on what Hawai‘i’s health insurance exchange could be or should be. The Connector board never made that fundamental decision but continued its work without a finalized strategic plan. As a result, the Connector is unsustainable due to high operating costs and Hawai‘i’s unique market of uninsured—only 8 percent of the population, about 100,000 residents. The interim executive director concluded that even with substantial reductions to the estimated $15 million annual operating budget, the Connector would not be sustainable. It would have to dramatically increase fees on participating exchange plans or the State would need to assess a fee across the market to preserve services.

In addition, the Connector did not have IT staff to manage the project’s development or monitor contracts, relying on vendors to self-report their progress. In addition, the board’s ability to monitor its massive IT system’s development progress was impaired by an uncooperative executive director who withheld information. Throughout the website development process, the board was largely unaware of the Connector’s myriad problems.

Connector did not properly procure and administer its contracts and monitor costs, putting federal grants at risk

The Connector received $204.4 million in federal grants to support the planning and establishment of Hawai‘i’s state-based health insurance exchange. We found the Connector did not properly procure or administer its contracts and circumvented its own procurement policies and procedures when hiring consultants. Contracts were awarded without following proper procedures to ensure competitive pricing and procurement documentation was disorganized or missing from most contract files. Many of the Connector’s IT consultant contracts were amended numerous times and costs ballooned as the Connector continued to rely on their services.

The Connector receives almost all its funds from grants awarded by the federal government. Strict federal regulations govern the use of these moneys. We noted numerous questionable travel and entertainment costs as well as unsupported severance pay. These questionable costs may be disallowed by the funding agency, and noncompliance with federal regulations may result in repayment of amounts or suspension and termination of a federal grant.

Agency response

The Connector suggested minor technical changes to our report but generally agreed with our findings and recommendations.

FULL TEXT: Audit of the Hawaii Health Connector 

SA: Audit finds former Health Connector leader's inadequacies

HNN: State audit finds Hawaii Health Connector not sustainable

CB: Audit: Bad Planning, Procurement Made Health Connector Unsustainable

SA: Audit blasts Hawaii Health Connector management


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Back da Blue Hawaii

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute


Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui


Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport


OHA Lies

Opt Out Today


Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii



Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii


Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu


West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii