Report Finds Conflicts of Interest and Procurement Violations in Health Insurance Funds
OSC reviewed proposed procurements from three public health insurance funds: the Schools Health Insurance Fund (SHIF), the Southern New Jersey Regional Employee Benefits Fund (SNJHIF), and the Municipal Reinsurance Health Insurance Fund (MRHIF). Collectively, the three HIFs provide health benefits for more than 100,000 public employees and their families. During the review, OSC found Conner Strong & Buckelew and its related entity, PERMA, had longstanding undisclosed conflicts of interest and improperly controlled contracting processes that led to them being awarded contracts.
What's Next: Corrective Action Plans Due by Nov. 8
OSC directed each of the three health insurance funds to submit a corrective action plan (CAP) detailing how they will eliminate the conflicts of interest and come into full compliance with public contracting laws. The HIFs’ trustees—public officials responsible for protecting the public funds—are required to vote on the CAP in a public meeting. To protect the public interest, OSC also instructed the HIFs to prepare the CAPs without the involvement of current or prospective vendors.
Why Does OSC Review Proposed Government Contracts?
By law, public entities must submit proposed procurements valued at more than $15.2 million for OSC’s review and approval before advertising for and soliciting bids. OSC’s Public Contracting Oversight Division is staffed with attorneys specializing in public contract law, and reviews are guided by New Jersey procurement laws and regulations, which are intended to protect taxpayer funds, encourage free and fair competition, and provide government efficiency and transparency.
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The Office of the State Comptroller (OSC) is an independent State agency that works to make government in New Jersey more efficient, transparent, and accountable. Tasked with examining government expenditures, OSC conducts audits and investigations of government agencies throughout New Jersey, reviews government contracts, and works to detect and prevent fraud, waste, and abuse in New Jersey Medicaid.
