(1) The health sciences facility shall annually prepare and submit to the state department a report including an evaluation of the implementation of the program, the results achieved by the program based on the annual reports submitted by the administering entities pursuant to section 26-6.4-106 (1)(e), the extent to which the program serves medicaid-eligible persons and provides services that may be provided in part through medicaid funding, and any recommendations concerning changes to the program, including any changes that may be appropriate to enable the program to receive and maximize medicaid funding. Each program contractor and subcontractor and each entity that administers the program shall work with the health sciences facility and the state department to prepare the reports required under this section and section 2-3-113 (2), C.R.S. Any entity that is administering the program is subject to a reduction in or cessation of funding if the state board, based on recommendations from the health sciences facility, determines that the entity is not operating the program in accordance with the program requirements established by rule of the state board or is operating the program in such a manner that the program does not demonstrate positive results.

(2) The state auditor's office, pursuant to section 2-3-113, C.R.S., shall audit each entity administering the program to determine whether the entity is administering the program in compliance with the program requirements and in an effective manner. The audit shall be conducted and reported in accordance with the provisions of section 2-3-113, C.R.S.