Workers' Compensation Board


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NYS Comptroller


Taxpayers' Guide to State and Local Audits

Workers' Compensation Board
Assessment and Collection of Selected Penalties

Issued: September 24, 2013
Link to full audit report 2011-S-3
Link to 90-day response

To determine whether the Workers' Compensation Board (WCB) is properly billing, collecting and promptly depositing, in appropriate accounts, selected legislatively mandated penalties.

The Workers' Compensation Law allows health care providers, which have provided services to WCB claimants, to notify WCB in writing when the claimant's insurance carrier fails to pay or notify them within 45 days that payment is not being made for a bill that has been submitted. WCB staff review the notification, and if it is determined that payment should have been made by the carrier, the law requires WCB to impose a $50 penalty (HP-1 penalty) on the carrier. The proceeds of these penalties are to be deposited in the State's general fund.

Key Findings

  • While WCB properly bills for the HP-1 penalties, it has not been making sufficient efforts to collect all of the penalties owed. WCB does not take any enforcement actions against carriers who do not pay; instead WCB routinely sends quarterly billing statements to the carriers without any follow-up collection efforts.
  • As of October 18, 2011, there were 26,981 HP-1 penalties outstanding, totaling about $1.4 million. However, a significant amount of these posted receivables were due from entities which WCB subsequently determined it should not have been assessing penalties on, or collecting penalties from.

Key Recommendations

  • Take enforcement actions against carriers who have not paid their outstanding penalties, including referral to the Attorney General and State Insurance Department.
  • Adjust accounts receivable and other WCB accounting records for the penalties it has inappropriately assessed on ineligible entities.

Other Related Audits/Reports of Interest

Workers' Compensation Board: Workers' Compensation Program: Statement of Assessable Expenses for the Three Fiscal Years Ended March 31, 2011 (2012-S-71)
Workers' Compensation Board: Workers' Compensation Program Statement of Assessable Expenses for the Two Fiscal Years Ended March 31, 2008 (2009-S-45)

State Government Accountability Contact Information:
Audit Director: Frank Patone
Phone:(212) 417-5200; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236