Report 2019-106 Recommendation 2 Responses

Report 2019-106: Workers' Compensation Insurance: Some State Agencies Are Paying Millions of Dollars More Than Necessary to Provide Benefits to Their Employees (Release Date: November 2019)

Recommendation #2 To: Compensation Insurance Fund, State

To ensure that state agencies have adequate time to review settlement requests and provide settlement authority, State Fund should create and follow a policy by May 2020 to provide settlement authorization requests to agencies at least 30 days before settlement conferences.

6-Month Agency Response

State Fund has addressed the California State Auditor recommendation to ensure State Agencies have adequate time to review settlement requests and provide authority by implementing a policy to send settlement authorization requests to agencies at least 30 days before settlement conferences.

Policy:

Settlement authority requests will be provided to state agencies at least 30 days before a settlement conference.

Status:

- Policy was implemented December 2019

- Adjusters are sending settlement authorization requests to State Agencies at least 30 days prior to settlement conferences

- Settlement conferences are tracked with requests monitored to ensure timely submission

- Implementation: Completed

  • Completion Date: March 2020
  • Response Date: May 2020

California State Auditor's Assessment of 6-Month Status: Fully Implemented

State Fund has addressed the recommendation by creating a policy that states it will submit settlement authority requests (SAR) to the state agencies no later than 30 days prior to the mandatory settlement conference (MSC) or trial date. It also tracks this information to ensure the timely submission of SARs, and the reports it submitted demonstrate a decrease in the number of SARs submitted less than 30 days before the MSC.


60-Day Agency Response

State Fund has implemented a policy, new processes, and oversight to help ensure state agencies have sufficient time to review settlement requests and provide authority prior to settlement conferences.

Policy:

Settlement authority requests will be provided to state agencies at least 30 days before a settlement conference.

Current status:

- Policy was implemented mid-December

- Adjusters are sending settlement authorization requests to the agencies at least 30 days prior to settlement conferences

- Post implementation monitoring in progress

- Target date to complete implementation: May 2020

  • Estimated Completion Date: May 2020
  • Response Date: January 2020

California State Auditor's Assessment of 60-Day Status: Partially Implemented

The corrective action indicated appears to address our recommendation. However, State Fund did not provide supporting documentation of the policy or its monitoring efforts, and as a result we are unable to fully confirm the implementation of the corrective action.


All Recommendations in 2019-106

Agency responses received are posted verbatim.