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Connect for Health Colorado asked to repay nearly $10 million

Federal audit says agency misspent funds

Connect for Health Colorado Asked to Repay $10 Million

COLORADO SPRINGS, Colo. - A just-completed federal audit reveals that a Colorado agency created to help people find affordable health care insurance misspent nearly $10 million in grant funds.

The audit was conducted by the Inspector General's Office for the U.S. Department of Health and Human Services.

The office audited Connect for Health Colorado, a Denver-based organization also known as the state's health insurance marketplace that opened in 2013 and is considered the state's version of the federal Affordable Care Act.

According to the 29-page audit, the agency failed to follow federal guidelines for spending and documenting several grants administered by the U.S. Centers for Medicare and Medicaid Services.

Among the audit's findings:  The agency improperly awarded bonuses to executives and employees; approved unallowed spending for certain social activities; required the use of personal credit cards for agency purchases; and failed to fully disclose possible conflicts of interest.

Furthermore, the audit shows the agency improperly approved spending for support and maintenance contracts and moved costs between grants to correct accounting errors.

Kevin Patterson, the agency's CEO, disagrees with the findings and is appealing them.

Patterson said the money in question, just under $9.7 million, is only 5 percent of the agency's total funds received.

He attributes the discrepancy to what he describes as "mixed advice" on spending and accounting habits during the agency's first two years, and said the agency has improved those habits and made corrections where necessary.

The USCMM is expected to make a final decision on the matter within six months.

Peggy Herbertson, executive director of SET Family Medical Clinics in Colorado Springs, doesn't believe the agency intentionally misspent money.

"Hopefully, they'll be able to say why they did things the way they did, and that the feds will agree with them on that," she said.  "It's a new program so as guidelines come out, people interpret them the way they think they are, and the way they think it will best suit their state."

Herbertson said it's unclear how the situation will affect uninsured or under-insured people seeking health care coverage.

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