Purpose

The purpose of this performance audit is to determine whether the Workers’ Compensation Board (Board) has adequate procedures in place to accurately report its assessable expenses related to the administration of Sections 50(5) and 151 of the Workers’ Compensation Law. We performed our audit pursuant to legislative mandates included in these statutes, which direct the Comptroller and the Chair of the Board to ascertain the annual amount of expenses incurred in the administration of these Laws. Our audit covered the period April 1, 2013 through March 31, 2014.

Background

The primary responsibility of the Board is to ensure that employees who are unable to work due to injury or illness are compensated under programs covering both occupational and nonoccupational disabilities and sickness. Coverage for these benefits, with limited exception, is to be provided by their employers. The Board is also responsible for tracking its costs to administer the Workers’ Compensation Program (Program) and assessing these costs on participating insurance carriers, self-insurers, and self-insured political subdivisions of the State.

Key Findings

• The Board has adequate procedures in place to ensure that it accurately identifies and reports its assessable expenses in all material respects.
• The Board made minor payroll allocation errors that had no net impact on the total assessment of about $212 million. These errors occurred because some workers were charged to the wrong department payroll. Board officials agreed with our findings and stated they have corrected the errors.
• The Board implemented the recommendations contained in our prior audit report (2014-S-43).

Key Recommendations

• Ensure that the appropriate corrections are made to the FY 2014-2015 assessment.
• Continue working with the Office of General Services’ Business Service Center to ensure that personal service costs reconcile to employee payroll expenses and are allocated appropriately for future assessments.

Other Related Audits/Reports of Interest

Workers’ Compensation Board: Assessment of Costs to Administer the Workers’ Compensation Program for the Two Fiscal Years Ended March 31, 2013 (2014-S-43)
Workers’ Compensation Board: Internal Control System Components (2015-S-46)