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Performance Audit of King County Workers’ Compensation Program

August 23, 2005

This performance audit of the count's self-insured workers' compensation insurance program was adopted with the Auditor’s Office 2004/05 work program as a self-initiated study. Workers’ compensation is insurance provided by employers to cover employees for job-related injuries and illnesses. It pays for the medical costs of job-related injuries or illnesses, and for wages lost for injured employees who are unable to work. County workers’ compensation claims are managed by the Office of Safety and Claims Management (SCM) of the Human Resources Division of the Department of Executive Services.

This audit follows the 2004 Financial Audit of the Workers' Compensation Program, which found that the financial health of the Workers’ Compensation Fund was deteriorating in that the fund balance was decreasing while the unfunded liability of current workers’ compensation claims was increasing.

Audit Highlights

Workers’ compensation is insurance provided by employers to cover employees for job-related injuries and illnesses. It pays for the medical costs of job-related injuries or illnesses, and for wages lost for injured employees who are unable to work.

The 2004 Financial Audit of the Workers’ Compensation Program found that the fund balance in the Workers’ Compensation Fund was inadequate to cover the future liability of current claims, and the deficit was increasing.

The audit recommended that the county consider aligning the time-loss benefit in the transit workers’ collective bargaining agreement to make it more comparable to other county bargaining units. The report made eight other recommendations for promoting further compliance with best practices for enhancing worker safety, managing claims, controlling medical costs, improving timely return-to-work, and deterring and investigating fraud.

Workers’ compensation is insurance provided by employers to cover employees for job-related injuries and illnesses. It pays for the medical costs of job-related injuries or illnesses, and for wages lost for injured employees who are unable to work.

The 2004 Financial Audit of the Workers’ Compensation Program found that the fund balance in the Workers’ Compensation Fund was inadequate to cover the future liability of current claims, and the deficit was increasing.

Recommendation Status

Of the 9 recommendations:

  • DONE: 9
    Recommendations have been fully implemented. Auditor will no longer monitor.
  • PROGRESS: 0
    Recommendations are in progress or partially implemented. Auditor will continue to monitor.
  • OPEN: 0
    Recommendations remain unresolved. Auditor will continue to monitor.
  • CLOSED: 0
    Recommendation is no longer applicable. Auditor will no longer monitor.