Auditor General Findings

“By periodically seeking competitive bids for insurance and negotiating with qualified bidders, the District could demonstrate compliance with State law and also gain additional assurance that insurance coverage was obtained at the lowest cost consistent with acceptable quality.”

“The Legislature has recognized in State law that fair and open competition is a basic tenet of public procurement and that such competition reduces the appearance and opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically.” This is Auditor General reference to FL Stat 287.001.

“Good business practices dictate that, when acquisitions are not through the competitive solicitation process, the selection and purchase of services should include documented considerations of how direct negotiations and contracts best meet the user’s needs. Effective procurement procedures serve to increase public confidence in the procurement process.”

  “District personnel indicated that it was unnecessary to competitively select self-insured plan TPAs or certain commercial insurance providers because the District directly negotiated the applicable agreements pursuant to SBE rules… and cites SBE Rule 6A-1.012(15), Florida Administrative Code… Notwithstanding this response, as Section 112.08, Florida Statutes, sets forth bidding requirements when contracting for health insurance services, the exception provided by the rule does not apply.”

“Without adequate procedures for verifying that over-aged dependent children are eligible for extended health insurance coverage, there is an increased risk that the District’s self-insurance plan may incur unnecessary claim payments… A similar finding was noted in our report No. 2015-160”

“Board-adopted collective bargaining agreements required the District to provide a comprehensive group health and hospitalization insurance policy for each full-time employee and, pursuant to State law, each eligible retiree.”

“District personnel indicated that it was unnecessary to competitively select the health, life, and other insurance providers considering that the current providers dominate the market of the geographic area… Notwithstanding this response, by periodically seeking competitive bids for insurance services and negotiating with qualified bidders, the District could demonstrate compliance with State law”

“…the District had not established procedures to monitor whether the agent competitively selected insurance providers” 

“…the District should have performed, or contracted for the performance of, a test of claim payments processed by the service agent to obtain those assurances.”

“District personnel indicated that they did not perform a review of claims documentation for the District self-insurance plan because they relied on an insurance consultant to approve payments to the District service agent prior to making claim payments.” 

“Notwithstanding, the Board had not established policies or procedures, as of that date, identifying the plan’s target net position balance or funding level and the funding sources to subsidize the plan if the plan is not self-sufficient.”

“To ensure that only eligible dependents participate in the District health insurance plan, procedures to obtain and verify documentation supporting dependent eligibility are necessary.”

“…according to District personnel, they relied entirely on the management service company to verify dependent eligibility during initial enrollment and open enrollment. However, the contract did not require the management service company to obtain and verify dependent eligibility.”