Video: What happened to the Cover Oregon audit?

posted at 10:01 am on February 14, 2014 by Ed Morrissey

How did Cover Oregon blow through more than $120 million and end up with a completely non-functional website? One year ago, when Oregon officials raised questions about the project and the contracts going to Oracle, Oregon Health Authority CIO told other state officials in a Cover Oregon meeting that the Secretary of State’s office had conducted an audit of the contracts, and found no problem. A year later, no one can find any evidence of that audit, which adds yet another dimension to the allegations of fraud involving Carolyn Lawson and Cover Oregon. KATU continues its in-depth investigation of the scandal:

The report goes on to say the issue was resolved, citing an audit by the Secretary of State’s office that “found everything in order.”

But the KATU On Your Side Investigators have learned that that audit – the only piece of evidence used to dismiss major accountability problems surrounding a contract that eventually grew to $119 million – doesn’t exist.

That audit was particularly important because the state’s contract with Oracle lacked the safeguards government’s usually put in place to ensure transparency. ….

The KATU Investigators contacted the Secretary of State’s office to ask for a copy of the audit.

Three different people responded, none of whom had a record of it, and finally it was suggested the Department of Administrative Service might know more.

DAS didn’t know of such an audit either, and referred KATU to the Legislative Fiscal Office.

The LFO didn’t know anything about it, referring KATU back to the Secretary of State’s office.

“I checked with our managers and there is no audit that would substantiate the statement that ‘a SOS audit found everything in order,’” Secretary of State auditor Gary Blackmer wrote to KATU News. “We have not conducted any audits of procurement or accounting practices related to the DHS/OHA Oracle contract.”

The video gives a pretty good overview, but you’ll want to read the full article as well. The QA group Maximus did its own audit, which found exactly the opposite of what Lawson told the rest of the team in that meeting. The problem was that the contracts essentially amounted to “blank checks” because the Cover Oregon team had little documentation about what Oracle was being contracted to produce, and what was provided (Statements of Work, or SOWs) were entirely inadequate. In addition, Maximus found that Oracle used the funds to perform work “outside the scope of the HIX-IT project” — or in other words, it used Cover Oregon money to do other work.

It’s not as if this problem was unnoticed. In that February 2013 meeting, the other Cover Oregon players clearly had concerns about this issue. Lawson put them off by making her claim about the SoS audit, but not everyone was buying it. It also raises the question — again — of what Governor John Kitzhaber knew about the failures of this project and when he knew it. Lawson ended up in tears during the meeting, according to KATU, and at least one of the attendees presumably had a reporting relationship to Kitzhaber (interim state CIO Julie Pearson). It’s difficult to believe that concerns of that depth and at that level eight months before the rollout deadline wouldn’t have reached Kitzhaber’s desk at that time, let alone down the line when the project was clearly derailing.

Don’t be surprised to see fraud investigations at a couple of levels resulting from this scandal.


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Don’t be surprised to see fraud investigations at a couple of levels resulting from this scandal.

On the contrary, I will be greatly surprised at any such investigation – particularly one which results in someone being held accountable.

Hucklebuck on February 14, 2014 at 10:08 AM

Don’t be surprised to see fraud investigations at a couple of levels resulting from this scandal.

Sorry, but I won’t hold my breath for this “investigation” either. If we can hold liberals feet to the fire for Benghazi or Fast and Furious the disappearance of a mere 100 million doesn’t amount to a hill of beans!!

Deano1952 on February 14, 2014 at 10:11 AM

Oops, ^^should have been can’t.

Deano1952 on February 14, 2014 at 10:12 AM

On the contrary, I will be greatly surprised at any such investigation – particularly one which results in someone being held accountable.

Hucklebuck on February 14, 2014 at 10:08 AM

Regrettably, I believe Hucklebuck is exactly right. We’ll get faux outrage, Obama style, “no one is more disappointed/angry/hurt etc than I am” while no actual individual takes any blame whatsoever.

jwolf on February 14, 2014 at 10:13 AM

That audit was particularly important because the state’s contract with Oracle lacked the safeguards government’s usually put in place to ensure transparency. ….

HHAHAHA as anyone who works with Oracle can attest… it doesn’t matter who you are, you accept Oracle’s contract terms or you don’t get a signed contract.

Defenestratus on February 14, 2014 at 10:14 AM

Not off the subject.

None of the most evil of the commie Democrat agenda could have ever been passed and signed into law without the aid and comfort from the RINO’s.

Not one.

Old man Bush is a buddy of Bill Clinton.

Young Bush wanted to be liked by the commie Democrats.

McCain has his hands warmed every day by putting them in commie Democrat pockets.

Romney got elected Gov. of Mass. by getting commie Democrat voters to vote for him.

The old WWII vet they ran was a go along Senator for his whole time in the U.S. Senate.

If you go along you will be in the fatal crash when it happens and we are on ice, going to fast, and these commie Democrat drivers are drunk on power.

The wreck comes.

APACHEWHOKNOWS on February 14, 2014 at 10:14 AM

Democrats will be democrats

tcufrog on February 14, 2014 at 10:15 AM

Tbe one area Obama is not leading from behind

cmsinaz on February 14, 2014 at 10:15 AM

Follow the money…

albill on February 14, 2014 at 10:17 AM

Winner hucklebuck

Spot on

cmsinaz on February 14, 2014 at 10:18 AM

Had the architects of Cover Oregon been tailors, they would have at least succeeded in covering their own asses.

pwrefugee on February 14, 2014 at 10:22 AM

Oregon got a real bargain. The Federal non-working website cost 5 times as much.

pilsener on February 14, 2014 at 10:27 AM

It doesn’t matter, or “what difference does it make”, a democrat controlled committee made the error, so it just won’t matter, and the people won’t care.

We have to wait until their is some Republican, somewhere, even if it’s after the fact, they need someone to blame.

Meanwhile, Bush did it…

right2bright on February 14, 2014 at 10:28 AM

Take this crime of the Obama Care.

The RINO’s put up Romney, he plays nice with this thug, McCain said Obama would be a good Pres. they enabled this commie nut job.

Now he is in office, he and his nut job liberal loon hate America cult inside the commie Democrats take over and put up this Obama Care.

Now any good Gen. and or E-8 Army Ranger or E-7 Navy Seal would take a look at the deal and advise.
Looks like they are going to run a dumb ass ambush and do so with out the facts, not enough ammo, not enough planning and what we need to do is LET THEM BUST ON THOUGH. Lag back, act like we are bugging out to the rear and suck them in full bore.

Once they get Obama Care up and running (it would have been a sure fail total) then counter attack “ambush”. They would be out there flat footed with no escape other than to get wiped out and or give up and turn in their guns to U.S..

Still not to late, now we have to force them to put it all into effect as written (not read) all of it 100% down to the last worst part. Make them eat it raw with no water to drink.

All the R’s have done so far is put these commie nut jobs on notice of the worst crap thus helping them know which crap to delay.

Get in every state sue the shit out of the Adm. and force them to put the full thing into effect now before April 1, 2014.

They would have to back down or be wiped out in Nov.

Attack do not stay on defense.

APACHEWHOKNOWS on February 14, 2014 at 10:33 AM

The problem was that the contracts essentially amounted to “blank checks” because the Cover Oregon team had little documentation about what Oracle was being contracted to produce, and what was provided (Statements of Work, or SOWs) were entirely inadequate. In addition, Maximus found that Oracle used the funds to perform work “outside the scope of the HIX-IT project” — or in other words, it used Cover Oregon money to do other work.

What is it about the ACA, and the effort in a number of states (OR, MD, MN, CA, WA, and HI to think of a few troubled implementations), where so many who should have known better, engaged contractors with apparently little to no standard protections towards the interests of the taxpayer and vague (at best) statements of work?

Given that the vast majority of the implementations were disasters, this is almost the rule rather than the exception. And in another element of the pattern – the government’s involved in these most egregious examples of failure are all Democrat run.

It goes beyond incompetence….and should involve criminal fraud on a number of levels. We’re talking $600M for the federal site and at least three quarters of a billion for the 6 states I named above.

Athos on February 14, 2014 at 10:36 AM

Too many people look at these problems individually. That is an error. All of these incidents are not problems, they are evidence. Evidence that our government at all levels has gotten out of control. Do any of you really believe that we…the people…still control our government?

At the start, each “representative” actually represented about 30,000 people. Today, each Representative is elected by a potential total of over 720,000 people. Look at it this way…if the 30k to 1 ratio held today, the House would consist of 1,500 elected officials. And…if today’s ratio were applied to the first Congress, thee would be 5 members of the House…and 8 states would have no representation.

We are no ruled by a Dictatorship (or a Proletariat, if you will)537 people…none of which is about to give up their power, much less discontinue claiming more, over each of our lives.

TKPedersen42 on February 14, 2014 at 10:42 AM

ps

Some one pay Karl Rove just to shut the hell up.

APACHEWHOKNOWS on February 14, 2014 at 10:52 AM

How did Cover Oregon blow through more than $120 million and end up with a completely non-functional website?

Do you ask a question?

Lanceman on February 14, 2014 at 10:54 AM

It probably won’t matter in the long run because nobody gives a damn anymore. I can remember the day, long ago and not so long ago, when a half a million people marched in the streets to protest the acts of the government. Now you can hardly get a few thousand. I truly thought congressional waivers for Obamacare or “insider-trading” would be great issues that would draw out people on both sides. I didn’t see any outrage from the Tea Party or Occupy people. I know the TP says they are focusing on local issues which is fine and dandy. So is walking and chewing gum at the same time. I need to go check my mail now to see if the Tea Party Patriots have sent me another expensive mailer this week asking me for money.

Jackson on February 14, 2014 at 10:56 AM

It doesn’t matter because the Cover Oregon people care.

jvermeer on February 14, 2014 at 10:58 AM

How much has been spent on all of the state run exchanges? Colleagues of mine with experience in operating complex websites say a website like Oregon’s should be done for between 500k to 1M.

This whole boondoggle is preposterous.

wmdawesrode on February 14, 2014 at 11:05 AM

Private Sector: Somebody goes to jail.

Public Sector: Weee! What the heck…its somebody else’s money.

Yes, let’s give the government more control of our lives…

Micah68 on February 14, 2014 at 11:08 AM

One way or the other it will get “fixed”.

Total fail of the system the two party evil money cult has U.S. under.

We The People stand up and elect people who will do the job.

One of them is a short term deal that is needed.

One of them is a just a bit longer but more deadly deal of total fail and much much worse conditions for the whole of the U.S. and the world.

In the end it will be U.S. (We the People) who have to pick up the parts damaged and fix them, or we all go back in time to times as bad as the U.S.S.R. in the 1940′s to 1990.

Allowing the evil to continue will be our crime on ourselves.

APACHEWHOKNOWS on February 14, 2014 at 11:11 AM

Does anyone really think that even if an investigation shows corruption that the taxpayers will get their money back? Check’s in the mail?

Kennyraisin on February 14, 2014 at 11:18 AM

But the KATU On Your Side Investigators have learned that that audit – the only piece of evidence used to dismiss major accountability problems surrounding a contract that eventually grew to $119 million – doesn’t exist.

Kind of like the idiot Eric Holder’s investigation of IRS corruption?

slickwillie2001 on February 14, 2014 at 11:57 AM

Biggest benefit of big government to big government worker bees:
You can slice’n’dice responsibility for anything over so many workers and different departments and offices, that no one truly has any answerable culpability for anything.
And as long as ‘smoking gun’ documents and tapes aren’t discovered, those at the top enjoy plausible deniability. “I didn’t know! I wasn’t told!”
And those at the top know their #1 responsibility is to the people to make sure that those smoking gun documents and tapes never exist in the first place.
Big government business as usual! I’m so proud of my state… we’re just like Washington, D.C. now.

Marcola on February 14, 2014 at 12:01 PM

It appears to me, from seeing the hearing on tv for the federal exchange….which don’t forget, got the blame and was “fired,” and here…Oracle…must have used the states money to do other work…

That in the case of both the federal exchange and the Oracle work, the clock was running, the companies were there, and the HHS was not sending them the information needed to make the website work. Therefore they can be blamed for doing no work. These companies showed up, sent in their charges, but the data was withheld. Some of it for political reasons…we could not know until after Nov 2012 what was going to go into the website, in case it got out.

Fleuries on February 14, 2014 at 12:05 PM

Wow. Just Wow! Sounds like some money laundering going on. 120M to Oracle? I bet Larry Ellison is laughing all the way to the bank

ConservativePartyNow on February 14, 2014 at 12:36 PM

Well, maybe they can use the Krugman War Against Space Aliens defense-all the money got paid out, so it went to stimulating the economy. Any actual product would just be a side benefit.

talkingpoints on February 14, 2014 at 12:45 PM

Are Dem’s the guilty party? If so, never mind, nothing too see here.

usejwat on February 14, 2014 at 12:50 PM

Don’t be surprised to see fraud investigations at a couple of levels resulting from this scandal.

Hey, they’ll pass around a bong, everyone will take a hit…..NO PROBLEMS HERE!

GarandFan on February 14, 2014 at 1:00 PM

You’d expect this kind of thing in third world countries, or even very corrupt countries like Russia where handing out money to friends of government officials is part of life. Sad to see it happening more and more in the US.

My husband works in computers, in part building websites, and is completely appalled at the amount of money thrown at companies for this debacle called Obamacare, without results. I would love to see a full accounting of all the money handed out nationwide. Who got it? What were the results? There should be a list of all those involved and they should never ever get any government money again. In fact they should be made to pay back much of what they got in fines for not producing results.

Annielou on February 14, 2014 at 2:01 PM

Walden calls for federal investigation of Cover Oregon

U.S. Rep. Greg Walden and three congressional colleagues — all fellow Republicans— on Thursday requested a federal investigation of Oregon’s troubled health insurance exchange, which has been unable to sign up a single person through its online portal because of technical problems that were known months before it was supposed to launch.

“The catastrophic breakdown of Cover Oregon is unacceptable, and taxpayers deserve accountability,” Walden and the others wrote in a letter to the U.S. Government Accountability Office.

kakypat on February 14, 2014 at 2:59 PM

Yeah, but: It’s Oregon, and ObamaCare, and Larry Ellison, who’s cool with Dems, so: Whatevs, dude.

orangemtl on February 14, 2014 at 4:47 PM

It also raises the question — again — of what Governor John Kitzhaber knew about the failures of this project and when he knew it

Ah, another graduate of the Obama “gummint by Constitution” course, I see…
“Don’t know nuthin
Don’t see nuthin
Don’t hear nuthin
Ain’t I great or what?
Oh, and mean Republicans something something…”

DublOh7 on February 14, 2014 at 5:17 PM

John Kitzhaber equals incompetence.Just what the people of Oregon need. Another four years of his style government. This is what you get with leftist democrats that run state government. Nothing for the tax dollars that come from local tax payers.

regmgr on February 14, 2014 at 6:12 PM

How much money was Oracle slipping to Lawson, and will we ever know?

Rusty Nail on February 14, 2014 at 7:25 PM

You can bet there will be a strict and completely merciless audit, that being the upcoming:

IRS audit of KATU and its owners in 3..2..1

s1im on February 15, 2014 at 1:32 PM