Auditors eye Colorado exchange

The state-based public health insurance exchange in Colorado has accurate financial statements, but it also has some problems with accounting and internal controls, according to a draft audit report.

The finance committee of the exchange, Connect for Health Colorado, included the draft in a meeting packet.

The nonprofit Patient Protection and Affordable Care Act (PPACA) exchange is reporting a $36 million gain in net position for 2014 on $110 million in operating revenue, compared with a $17 million gain in net position on $44 million in operating revenue for 2013.

The operating revenue total for 2014 includes $86 million in federal grants, $1.5 million in other grants, $20 million in program revenue, and $2.2 million in fees for exchange services, or revenue generated by selling health insurance to consumers.

See also: PPACA exchange update: Distribution is hard

The program revenue figure includes $15 million from the CoverColorado risk pool program, which shut down due to the start of the PPACA exchange program and implementation of PPACA underwriting rules. That figure also includes million in insurer money that might have otherwise gone to CoverColorado.

Auditors associated with the legislature released a highly critical audit report earlier.

The new draft report, prepared for Connect for Health board members by an unnamed auditor, has a different tone but also identifies financial management concerns.

For a look at what the independent auditors told the exchange board, read on.

1. The managers are cooperating and doing what they can to correct errors.

In a table describing the auditors’ “communication with those charged with governance,” the auditors said, No disagreements arose with management during the course of our audit.” Elsewhere, the auditors said, “Management has corrected all known and likely misstatements,” and “no instances of noncompliance material to the financial statements of the exchange…were disclosed during the audit.”