Audit: Group health plan for state workers ignored bidding rules, engaged in 'wasteful spending'

Nevada’s group health insurance program for state employees consistently failed to seek competitive bids on nearly $96 million worth of contracts over the past four fiscal years, according to a recent state audit that also found examples of “wasteful spending” and state policies not being followed.

An audit report released last week by the Legislative Counsel Bureau’s Audit Division into the contract management practices of the Public Employees Benefits Program, or PEBP, found that leadership of the health insurance program consistently failed to follow state laws and policies requiring contracts be put out to bid every four years, choosing instead to extend contracts in violation of normal practices for state agencies.

The audit also found PEBP management often privately negotiated contract extensions without putting them out to a competitive bid, including one instance where one under-performing vendor had a contract extended and scope expanded after PEBP staff took paid trips to their headquarters at an estimated cost of more than $7,000.

PEPB Executive Director Laura Rich, appointed in March 2020, said that the agency has since cancelled that contract and has begun putting multiple contracts out to bid this year and next year. She added that PEBP had accepted all recommendations from auditors and that a compliance package would come up at the agency board’s meeting next month.

Read more: https://thenevadaindependent.com/article/audit-group-health-plan-for-state-workers-ignored-bidding-rules-engaged-in-wasteful-spending