Self-funded Health Plan Follow-Up

The Office of Human Resources fully implemented one recommendation made in the original audit report. However, the office only partially implemented three others, and it has not taken steps to address the risks three other recommendations had sought to resolve.

Human Resources complied with the ordinance that requires an external audit of dependents’ eligibility every five years, and this resulted in cost savings. The external audit found 614 ineligible dependents who were enrolled in the city’s health benefit, which allowed Human Resources to remove them from the city’s plan saving over $2 million.

Remaining Risks

The recommendations the Office of Human Resources did not fully implement present several lingering risks. Among them:

• Human Resources did not develop and implement policies and procedures for reviewing eligibility for the city’s self-funded health plan, monitoring third-party contracts, and aligning its processes with federal standards for internal controls. Until it does, the office risks further errors in processing employee and dependent eligibility, making decisions using incorrect information, not communicating health plan changes promptly, and unauthorized individuals having access to the United Healthcare online portal.
• Human Resources cannot ensure that a review of United Healthcare’s service provider report will be performed annually and cannot guarantee that material exceptions in the control environment are addressed promptly, accurately, and appropriately. This could adversely affect city employees’ health benefits. Furthermore, undocumented processes are subject to institutional knowledge loss in case of staff turnover and other changes.
• Human Resources may spend more taxpayers’ money on a medical claims audit than is needed by not identifying risks and specific needs before outsourcing the work to third parties.

Auditor's Letter

October 2, 2025

In keeping with generally accepted government auditing standards and Auditor’s Office policy, as authorized by city ordinance, we have a responsibility to monitor and follow up on audit recommendations to ensure city agencies address audit findings through appropriate corrective action and to aid us in planning future audits.

In February 2024, we audited the city’s Self-funded Health Plan and found risks involving policies and procedures, oversight, and contract monitoring. The Office of Human Resources agreed to implement all seven of our recommendations.

We recently followed up and found the Office of Human Resources fully implemented one recommendation, partially implemented three, and did not implement three other recommendations.

The Office of Human Resources complied with the ordinance that requires an external audit of dependents’ eligibility every five years, and this resulted in cost savings. However, it did not fully address all the risks associated with our original findings. Consequently, we may revisit this and other remaining risk areas in future audits to ensure the city takes appropriate corrective action.

We appreciate the leaders and team members at the Office of Human Resources who shared their time and knowledge with us throughout the audit and the follow-up process. Please contact me at 720-913-5000 with any questions.

Denver Auditor's Office


Timothy O'Brien, CPA

AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor

Denver Auditor's Office

201 W. Colfax Ave. #705 Denver, CO 80202
Email: auditor@denvergov.org
Call: 720-913-5000
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