State Education Department
School Districts' Casualty and
Property Insurance Programs (Follow-Up Review) Most school districts
purchase casualty and property insurance from private insurance companies. In our prior
audit report 93-S-79, we examined the procedures used by the State Education Department to
oversee this activity. We found that, because the insurance cost data reported to the
Department by the school districts was often inaccurate, the Department could not analyze the
data to identify districts with unexpectedly high costs. We visited eight districts and found
that the costs of at least two of these districts were significantly higher than necessary because
the districts did not use a competitive process to purchase their insurance policies. As a result
of our intervention, one district accepted a competitive proposal from another insurance
company at savings that exceeded $100,000 a year. We recommended that the Department be
more active in its oversight of school district insurance purchases. In our follow-up review,
we found that, due to reductions in staffing, limited progress had been made in implementing
our prior audit recommendations. However, Department officials told us they are trying to
find a way to implement our recommendations with fewer staff.
For a complete copy of Report 95-F-54 here.
For a copy of the 90-day response click here.