Sound accounting policies and practices help ensure a financially sustainable Exchange. These policies and practices, including financial reporting, also promote the Exchange’s accountability to management, government, and the public.

*Milestone details:

*Full name: Develop financial reporting, audit, internal controls, accounting policies, and other related practices for the Exchange.

*Relevance to the ACA:

The Exchange is subject to a number of accounting requirements and to the oversight of HHS and GAO. Relevant sections include:

§1311 - Eliminates federal funding for Exchanges beginning January 1, 2015 and requires that Exchanges be self-sustaining. Allows Exchanges to charge assessments or user fees or employ other methods to generate revenue. Prohibits Exchanges from using funds for giveaways, retreats or excessive compensation.

§1313 - Requires the Exchange to account for expenditures and be subject to annual audits. Allows investigations by the Inspector General of HHS into the activities of the Exchange. An Exchange must provide periodic reports of its activities if requested. The Secretary of HHS is authorized to take action by withholding funds from the state in the event of a pattern of fraud and abuse.

§1313 - Payments made to or through the Exchange are subject to the False Claims Act, which rewards whistleblowers who report misuse of federal funds.

§1313 - Before 2019, the GAO is required to undertake a study on Exchange activities and make recommendations for improvement.