But insurance spokeswoman Ann Roberson said the lack of spending was unrelated to the state's opposition. She said the Cabinet agency, which reports to the governor, applied for the money last year before realizing the data collection capabilities of the National Association of Insurance Commissioners, the national standard-setting and support group made up of the states' chief insurance regulators.

The state insurance agency asked for and received extensions on the other two grants of $1 million each, which were initially set to expire in late September.

One grant was to study how to create a health-insurance exchange or some alternative. As of Aug. 31, the agency had spent $63,000 of the $1 million, largely on the $102,000 annual salary of the project manager hired in March, according to the audit.

Also in March, Haley appointed 12 people to serve on a committee to study health exchanges. The group was initially supposed to submit recommendations by Friday but requested additional time. The report to her is now due Nov. 30, Roberson said.

The agency hired the University of South Carolina for $180,000 to do surveys and focus groups on health exchanges, but that money hadn't been paid since the work wasn't done, the audit said. The new deadline for getting reimbursed through that grant is Dec. 31.

The third grant has been extended through March.

It's meant to fund a review of insurance rates across the state. Since August 2010, $199,000 of that $1 million grant had been spent. That included the salary of that project manager, hired in December for $100,000 a year, but most of it went toward computer updates, the audit said.

An additional $375,000 is obligated to an actuarial firm, which was hired in June to analyze health insurance rate increase filings in South Carolina to determine whether the rates being charged for health insurance coverage are reasonable.