Department of Civil Service

Development of the State Computerized Authorization Network for the Health Insurance Program

In 1988 the Department contracted with a private company to develop and operate an automated system in support of the health insurance program. We examined the development of this system (the State Computerized Authorization Network or SCAN) and found that because of weaknesses in planning, contract administration and management oversight, the SCAN was not developed in an effective and efficient manner. At the time of our audit, the total cost of SCAN development, maintenance and operation ($18.9 million) exceeded the original contracted cost by $13.1 million, parts of the development were three years behind schedule, and development was not yet complete. We believe weaknesses in Department oversight may have contributed to these delays and cost overruns. 94-S-13