MNsure, the state's new online health insurance marketplace, lacked adequate control over its big marketing budget and hasn't always complied with rules laid out by state and federal officials, or its own board, the state legislative auditor said in a report released Tuesday.
While the state agencies that helped create MNsure generally had adequate internal controls and complied with most legal requirements, the auditor found:
• MNsure did not appropriately authorize $925,458 of additional marketing work or execute a contract amendment until after the contractor completed work.
• MNsure did not design and implement adequate internal controls over collection of receipts from applicants.
• MNsure did not monitor employee access to functions in the state's accounting system that require separation of duties between employees.
• The Department of Commerce and MNsure did not maintain complete and accurate inventory records of equipment purchased for the Exchange.
Regarding the marketing money, the auditor's report said MNsure's ex-marketing director signed off on nearly $1 million in spending beyond the original budget without first getting written OK from management.
MNsure's chief financial officer signed off on the spending jump in mid-May "even though the contract had expired six weeks earlier," the report said.
The audit also noted that MNsure's five paid board members received a total of $100,254 from May 2013 through December 2013.
In a letter accompanying the report, MNsure CEO Scott Leitz said the organization has fixed, or is in the process of fixing, all of the problems laid out in the audit.
The legislative auditor's office is required to look at how the state spends federal dollars, which have funded MNsure. The federal government awarded $155 million in grants to the state to develop MNsure.
Legislative Auditor Jim Nobles launched the MNsure inquiry earlier this year as questions swirled about MNsure's troubled fall launch and how the state handled contracts with several vendors that helped build MNsure's website.