Workers' Compensation Board

 

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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Workers' Compensation Board
Assessment of Costs to Administer the Workers’ Compensation Program
for the Three Fiscal Years Ended March 31, 2017


Issued: August 21, 2018
Link to full audit report 2017-S-64
Link to 90-day response

Purpose
The objective of this performance audit was to assess the accuracy of the Workers’ Compensation Board’s (Board) reported assessable expenses and compliance with relevant statutes related to the administration of Sections 50(5) and 151 of the Workers’ Compensation Law (WCL). We performed our audit pursuant to legislative mandates included in these statutes, which direct the State 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, 2014 through March 31, 2017.

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 payroll allocation errors in its 2014-15, 2015-16, and 2016-17 statements for the Self-Insurers (WCL Section 50(5)) assessment, resulting in a net underassessment of $1,124,833. These errors were attributed to an incorrect departmental allocation of Board personal service and related expenses. Board officials agreed with our findings, and stated they will implement corrective procedures and make the necessary adjustment for the underassessment.
  • The Board partially implemented the recommendations contained in our prior audit report (2015-S-12), stating the incomplete implementation was due to a misunderstanding and that, with the findings in this report, they will implement the remaining recommendation.

Key Recommendations

  • Verify that personnel associated with the Self-Insurers program are accurately identified as such, and ensure required corrections to inaccurate records are made timely. Make necessary adjustments to future assessment(s) for the errors made to personal service expenses for the three fiscal years ended March 31, 2017 as a result of inaccurate records.
  • Establish a consistent and accurate method to ensure the costs charged for personal service under the self-insurance assessment are representative of the Board’s actual costs to administer the provisions of WCL Section 50(5).

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: Assessment of Costs to Administer the Workers’ Compensation Program for the Fiscal Year Ended March 31, 2014 (2015-S-12)
Workers’ Compensation Board: Internal Control System Components (2015-S-46)


State Government Accountability Contact Information:
Audit Director: Brian Reilly
Phone: (518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236