MINNEAPOLIS (WCCO) — Minnesota Legislative Auditor James Nobles has begun an audit of MNsure, the state’s health exchange.

Nobles said MNsure should have known about the extent of problems with the sign-up website, after the state paid out tens of millions of tax dollars to build it.

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A rollout that he says “failed” in many ways.

“I think it is fair to use that word,” said Nobles in an interview with WCCO-TV. “It has not worked as promised. So clearly we have not delivered on giving the public what we told them they would have.”

The top-to-bottom audit will look at MNsure from the first federal dollar spent, and if any state officials knew about problems but kept them quiet.

“When you are managing a large contract of this importance, you cannot stand on the sideline and hope that things go well,” the legislative auditor said.

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Gov. Mark Dayton sent a stinging letter Dec. 13 to IBM-Curam, which MNsure says built a critical component of the website that determines eligibility for tax credits and benefits.

In the letter, Dayton said the product has “significant defects, which have seriously harmed Minnesota consumers. … Your product has not delivered promised functionality and has seriously hindered Minnesotans’ abilities to purchase health insurance or apply for public health care programs through MNsure. … I request that you immediately deploy whatever people or resources are needed to correct the defects in your product that are preventing Minnesotans from obtaining health insurance through MNsure.”

In a written statement, Mary A. Welder, IBM Rochester Initiatives and Media Relations, said: “While the majority of concerns expressed by Governor Dayton three weeks ago have been addressed, IBM continues to work aggressively with the other suppliers in helping the State of Minnesota make MNsure a more positive experience for Minnesota citizens. As an example, the percent of suspended applications decreased by two-thirds between mid-December and early January and the system is now handling cases at over a 97% daily success rate. To sustain the progress, we are providing services and resources beyond the scope of IBM’s contractual responsibilities at no cost to the state and our technical teams are working to resolve remaining issues as quickly as possible. IBM is committed to working in partnership with the State of Minnesota and the other suppliers to continue improving MNsure.”

The Legislative Auditor says he’ll look into whether MNsure misled the public about its problems, even as it encouraged Minnesotans to sign up, and if it learned the scope of its problems only after the website went live and consumers started complaining.

“We should never have gone live on October 1, and subjected citizens to the frustrating experience that many of them have had,” Nobles said.

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MNsure’s Executive Director resigned in December in part because of the rollout problems. In a written statement, MNsure spokesman John Schadl said: “We are squarely focused on making the consumer experience through MNsure a better one. We welcome the effort by the Office of the Legislative Auditor to review past processes and decisions, and we hope this review is able to identify additional strategies for improvement.”