Internal Controls: Oversight of Longshore Special Fund Needs Improvement
Highlights
Pursuant to a congressional request, GAO reviewed issues concerning financial reporting and internal controls related to the Special Fund established by the Longshore and Harbor Workers' Compensation Act (LHWCA), focusing on: (1) the feasibility of actuarially calculating the unfunded liability of the LHWCA Special Fund; (2) whether controls exist to prevent inappropriate claims from being referred to the Special Fund; (3) whether recipient data are matched against other agencies' databases to reduce the risk of payments being made to ineligible recipients; (4) whether there are equitable distributions of assessments among the insurance carriers/self-insured employers as compared to their claim levels; and (5) the status of changes to the Longshore computer systems.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Labor | To reduce the risk of Special Fund payments being made to deceased or otherwise ineligible recipients, the Secretary of Labor should direct the Assistant Secretary for Employment Standards Administration to implement a regular program of matching recipient data from the Special Fund to the SSA's death index. The match should be done monthly, in conjunction with the match of the Black Lung and the Federal Employees Compensation Act recipient data match with the SSA's death index. |
Closed – Implemented
SSA Death Index matches are now done monthly.
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| Department of Labor | To reduce the risk of Special Fund payments being made to deceased or otherwise ineligible recipients, the Secretary of Labor should direct the Assistant Secretary for Employment Standards Administration to develop and implement procedures to adequately monitor the continuing eligiblity of the orphaned cases. The monitoring techniques employed should be similar to those used by self-insured employers and insurance carriers. |
Closed – Implemented
DOL hired an auditor in August 2000. The auditor's duties include auditing the entitlement of the "orphaned" cases. The auditor is verifying the entitlement of all (500)orphaned beneficiaries on a cycle basis, beginning with the oldest claimants.
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| Department of Labor | To help achieve the intended prorated distribution of assessments among the self-insured employers and insurance carriers, the Secretary of Labor should direct the Assistant Secretary for Employment Standards Administration to develop and implement a more comprehensive plan to expand the DOL's auditing of the LHWCA payment data submitted by self-insured employers and insurance carriers. |
Closed – Implemented
DOL continues to audit selected carries/self-insurers through their contract audit firm and have put carriers and self-insurers on notice that accurate reporting is a condition of continuing authorization. An experienced senior claims examiner has been assigned to improve the audit process by working with the contract audit firm. In addition, she is working on improving the accuracy of the existing Longshore Case Management System database in order to improve the results of matching the industry Report of Payments with the Program's database of cases. Further, she is more stringently enforcing the existing requirement that employers and carriers support their Reports of Payments with a detailed list of cases. This requirement was reemphasized in a formal Notice issued in January 2001. These efforts improve the reporting, matching, and database accuracy.
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