Gregory M. Davids
State Representative
District 288
‘llmore and Houston Counties
Minnesota
House of
Representatives
COMMITTEES:
CHAIR, TAXES
‘COMMERCE AND REGULATORY REFORM
‘VETERANS AFFAIRS DIVISION
WAYS AND MEANS,
October 20, 2015
Ms, Allison O"Toole, Interim CEO
MNsure
81 East 7th Street, Suite 300
St. Paul, MN 55101-2211
via electronic delivery
Ms. O'Toole,
‘Thank you for your appearance before the MNsure Legislative Oversight Committee (LOC) last
week. Prior to the meeting, LOC members were made aware that Congress is conducting an
investigation into MNsure’s handling of federal funds, In response to my question about whether
MNsure intends to meet the October 28 deadline set forth in a request for documents, you stated
that the request was “not a new matter in our minds” and that you hope to mect the deadline.
Since the LOC hearing, I have leamed that this response was incomplete, On September
appeared before the U.S. House Energy and Commerce’s Subcommittee on Oversight and
Investigations. Your testimony states that “MNsure is financially sustainable. We have a
balanced, conservative and sustainable budget that is based on real numbers and real
experience.
This is not supported by MNsure’s own budget documents. As mentioned at the LOC hearing on
August 20, MNsure’s most recent three-year budget plan indicates expected revenues of $4.5
million from the MNsure Tax. Administrative expenses are listed at $8.1 million. To date, we
have not received an adequate explanation of how MNsure covers the $3.6 million difference
Given that the only other sources of revenue listed are “CIO Establishment Grants” and “DHS
Reimbursement,” I have very serious concems about MNsure’s financial management.
‘The budget plan also indicates a total cost to finish building, repairing and operating MNsure of
almost $270 million over the next three years, including nearly $74 million in 2017. At the
P.O. Box 32, Preston, MN 55965, (607) 961-3608,
585 State Office Building, 100 Fev. Dr. Martin Luther King Jj. Bl. St, Paul, Minnesota 85155-1298, (651) 298.0278
FAX: (681) 206-6978 Email: rp.greg.davidash
&August 20 LOC hearing, MNsure’s COO testified that MNsure received federal approval to
spend grant money through the end of 2016. Yet, the budget lists $8.4 million in revenue from
CCTIO grants under 2017 revenue
‘The closest explanation I’ve received to date for these discrepancies is that MNsure is spending
grant money according to federal regulations and that IT funds are not being spent on operational
expenses. However, that does not explain which source of revenue is covering the administrative
shortfall. Despite making a request over two months ago for documentation of federal vatiances
and extensions, I have not received anything to support MNsure’s assertion that its spending
follows federal requirements.
T renew my request for documentation showing federal approval for the spending of planning and
IT grants on costs not originally allowed, as well as extensions for spending of federal funds
beyond the time originally permitted, Further, as discussed in the October 15 hearing, please
keep the LOC apprised of correspondence and documents shared between MNsure and
Congress.
swf)
ELS.
tive Greg Davids
Co-Chalf, MNsute Legislative Oversight Committee
ce (via electronic delivery)
‘The Honorable Governor Mark B. Dayton