Audit of Connect for Health Colorado finds thousands of dollars in questionable donations and credit card purchases

Days before open enrollment begins on Connect for Health Colorado, a new audit raises serious concerns about how the state health exchange is managing its finances.   

The audit comes after a CBS Colorado investigation found the exchange was sponsoring events by left-leaning political interest groups, including a gala by Progress Now, and events by the Immigrant Rights Coalition, Pueblo Pride, and a Transgender Day of Remembrance.

Connect for Health CEO Kevin Patterson told CBS Colorado at the time that the sponsorships were a mistake.

According to a state audit prompted by CBS Colorado's investigation, Patterson fixed the mistake. The sponsorships happened between 2022 and early 2023. The audit covered July 2023 to December 2024. While it didn't uncover any political donations, it did uncover other questionable donations as well as questionable credit card transactions.

Connect for Health receives millions of dollars in taxpayer funding, both directly and indirectly, and auditors found some of that funding is going toward dubious purchases, including $13,000 in alcohol over an 18-month period; $9,000 of that was expensed as "professional development."

Auditors say that, between 2023 and 2024, Connect for Health spent $468 thousand sponsoring 261 events. They looked at 49 of them, or 19% and didn't find any political fundraisers, but they did find other issues.

State law requires sponsorships further the exchange's mission of increasing access to affordable health insurance, but auditors found that a third of the sponsorships didn't appear to do that. It flagged a $5,000 donation for the Denver Zoo Flock Party, $7,500 for a United Way luncheon that featured an address by a famous actress, a winning bid of $2,500 to have dinner with a notable couple, and $12,000 for Court Appointed Special Advocates. Patterson's wife was on the nonprofit's board at the time.

"There are a number of elected officials that were at that particular event. There are folks that work in the community that work around health issues. And so, making the rounds in the room are a part of, a strong part of, the outreach; how we actually get more people on the exchange. I think the problem entailed from that is the lack of documentation, lack of clear policies and procedures. And, so, we know we can do a better job with that," said Patterson.

Auditors also raised red flags regarding some of Patterson's credit card purchases that they say "included high dollar transactions with inconsistent documentation to justify the business purpose and amount."

According to the audit, Patterson spent just over $64,000 on travel, meals and lodging over an 18 month period, including $1,400 in food and drinks at an upscale D.C. restaurant, $1,200 at the Chophouse, $400, $900, and $1,400 on three separate occasions at the Broadmoor, and $9,000 in alcohol for two staff appreciation parties that auditors say were expensed as "professional development".

"The processes weren't good. Oversight processes weren't enough," says Patterson. "We own that. It's important to note, though, that no funds were misused, but falling short of our public expectations is still falling short."

Auditors made several recommendations, including revising policies and procedures to ensure sponsorships align with Connect for Health's mission and credit card purchases are for business purposes only. Patterson says he has already put in place new board review protocols and reporting standards and is in the process of implementing other changes to improve accountability.