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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

MNsure: Planning and Establishment Grant Expenditures
Compliance Audit


Financial Audit Division Report 17-07 Released March 17, 2017

We audited MNsure’s use of the State Planning and Establishment Grants (establishment grants) it received under the Patient Protection and Affordable Care Act (Affordable Care Act) in fiscal year 2016.1

Our first objective was to determine whether MNsure’s expenditures complied with current federal restrictions on spending money from establishment grants2 and other federal requirements.3 We tested a sample of expenditures for items such as services MNsure purchased from other state agencies or private vendors, grants to organizations helping people obtain insurance through MNsure, as well as MNsure’s payroll and indirect costs.

Our second objective was to determine whether MNsure’s controls were adequate to ensure it complied with federal requirements. Therefore, we also tested MNsure’s internal controls over its expenditures from establishment grants.

Our third objective was to determine whether MNsure had resolved issues from our previous audit.


We concluded that MNsure complied with restrictions on spending from establishment grants and other federal requirements. We also concluded that MNsure had adequate internal controls to ensure compliance. We have one noncompliance concern, as noted in our audit finding. It is a repeat finding from our previous audit of MNsure.

Audit Finding

  • MNsure did not maintain complete and accurate inventory records of equipment it purchased. This is a repeat finding.4

1 Federal grant award numbers for the State Planning and Establishment Grants for the Affordable Care Act’s Exchanges Program: 4 HBEIE120176-01-10, 4 HBEIE120177-01-11, 4 HBEIE130163-01-18, and 4 HBEIE140181-01-12.
2 Beginning January 1, 2015, the U.S Department of Health and Human Services’ Center for Consumer Information and Insurance Oversight (CCIIO) revised its requirements to prohibit state-based exchanges from using establishment grant money for continued maintenance and operations. Instead, CCIIO required exchanges to use the federal grant money only for activities the federal government had approved in the exchanges’ work plans and budgets.
3 The OMB Circular No. A-133 describes general compliance features including: activities allowed or unallowed, allowable costs/cost principles (A-87), cash management, period of availability of federal funds, procurement and suspension/debarment, reporting, subrecipient eligibility and monitoring. We also ensured compliance with the federal requirements listed in the Compliance Supplement for the State Planning and Establishment Grants for the Affordable Care Act’s Exchanges (CFDA 93.525) and the U.S. Department of Health and Human Services – Notice of Award – General Terms and Special Terms and Conditions.
4 Office of the Legislative Auditor, Financial Audit Division Report 16-08, MNsure (Finding 2) issued March 24, 2016, and Financial Audit Division Report 14 21, Minnesota Health Insurance Exchange: MNsure (Finding 4) issued October 28, 2014.

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