RALEIGH Gov. Pat McCrory doesn’t think the state is ready to expand Medicaid or ready to run its own health exchanges – two provisions of the Affordable Care Act.

McCrory’s office made the announcement Tuesday morning just hours before the state House is supposed to take up a bill that would bar the state from participating in those two actions. The Senate passed the bill last week.

In making the announcement, McCrory pointed to a recent Medicaid audit that showed the state had overspent its Medicaid budget by more than $1.4 billion – $375 million of which was state money.

“In light of recent Medicaid audits, the current system in North Carolina is broken and not ready to expand without great risk to the taxpayers and to the delivery of existing services to those in need. We must first fix and reform the current system,” McCrory said in the statement.

Last week, just hours before the Senate vote on the Medicaid and health exchange legislation, McCrory had asked lawmakers to move slower, given the unknown financial ramifications. The governor was worried that the legislation could threaten money for the current system that tracks the state’s Medicaid patients, according to a letter his administration sent to Senate leaders.

As for the health exchanges, in his announcement Tuesday morning, McCrory said there had not been enough preparation in state government during the past year to build “necessary and reliable systems to implement a state exchange.”

The exchanges are online health insurance shopping centers for individuals and small businesses. Republican lawmakers did not pass needed legislation to set up the exchanges in the last session.

A bill that would have helped set up the exchange passed the House but was not taken up in the Senate. Senate President Pro Tem Phil Berger said at the time that he wanted to wait and see whether the Supreme Court upheld the Affordable Care Act.

Before former Gov. Bev Perdue left office, she took the first step toward the creation of a state-federal exchange partnership that would give North Carolina some oversight flexibility.

The state received a $74 million grant from the federal government to help establish the exchange. The legislation would require the state Insurance Department to return the money.