In a biting report released Thursday, the state auditor calls the former head of the Hawaii Health Connector “an uncooperative executive director who withheld information,” hampering the board of directors’ ability to monitor the development of its massive IT system.

Coral Andrews was the Connector’s executive director when the audit was winding up, but stepped down in December 2013. Tom Matsuda served as interim director until Jeff Kissell, the current executive director, was hired in October.

The lack of transparency didn’t just affect the Connector’s own work. It also delayed the start of the audit and affected the ability of the auditor’s office, headed by acting Director Jan Yamane, to do its job.

Jeff Kissell, Executive Director of the Hawaii Health Connector speaks to lawmakers at hearing at the Capitol. 29 dec 2014. photograph Cory Lum/Civil Beat

Jeff Kissell, executive director of the Hawaii Health Connector, makes his case for more state support at a legislative oversight committee hearing in December.

Cory Lum/Civil Beat

“At the start of our audit, we encountered resistance from the former executive director, who was reluctant to share any information, claiming the Connector was a separate nonprofit organization and not an entity of the State,” the audit says.

State law created the Connector and requires an annual state audit.

The Connector delayed producing requested data and documents — sometimes by up to two months — and denied direct access to records and files, the audit says.

“Records requested were screened and released to us piecemeal,” the audit says. “As a result, we had no assurance that documents were complete or in existence prior to our review.”

Specifically, the auditors were unable to determine if fees paid to one of the Connector’s consultants were reasonable because the Connector did not provide all the information requested.

The auditors wanted to know more about a $12.4 million contract with Mansha Consulting because as far as they were able to see, the company failed to do what it was hired to do. The auditors are still waiting for information about the number of Mansha employees and subcontractors who actually worked on a particular project from April 2013 to April 2014.

Overall, the 58-page audit hits the Connector hard for inadequate planning and improper procurement leading to an unsustainable state-based exchange.

However, the Connector’s new director is working to right the ship.

Kissell released a nearly 200-page report earlier this month charting a path for the Connector to become sustainable, in part by helping Hawaii’s economy gain more than $500 million in federal tax benefits under the Patient Protection and Affordable Care Act.

The Connector has already received $204.4 million in federal grants, but Kissell told lawmakers that its path to sustainability will require $28 million from Hawaii taxpayers over the next seven years, starting with an estimated $2.5 million to shore up a deficit next year.

The health exchange needs to attract at least 35,000 new members to become sustainable.

Kissell has recognized the Connector’s missteps in the past and vowed a more transparent future. He released a statement Thursday responding to the audit.

“The audit findings detailed many of the challenges the Connector encountered during its first year of business,” Kissell said. “They included deficiencies in the planning process, procurement, and governance. The recommendations are reasonable and have been addressed.”

Read the full audit below.

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