Department of Civil Service

Administration of the Workers' Compensation Agreement (Follow-Up Review)

The Department is periodically billed by the State Insurance Fund for workers' compensation benefits paid to State employees by the Fund as well as for a portion of the administrative expenses incurred by the Fund in processing the benefit payments. In our prior audit report 91-S-110, we found that, because the Department was late in paying bills from the Fund, it incurred significant interest penalties. We also found that, due to weaknesses in internal controls, the Department was overcharged by the Fund. We further determined that the amounts billed by the Fund could be significantly reduced if alternative methods of calculation were used. In our follow-up review, we found that good progress had been made by the Department and the Fund in addressing these problems. 95-F-26