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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
Department of Employee Relations

Programs Selected For

Fiscal Year 1995 Statewide Audit


Public Release Date: April 24, 1996 No. 96-17

Department Background

The Department of Employee Relations (DOER) is the central human resource agency for the executive branch of state government. Its duties include personnel administration and labor relations. The department operates the insurance and workers' compensation programs for state employees. It also responds to the general public seeking information about employment and organizations involved in human and civil rights issues. DOER administers the Public Employee Insurance Program (PEIP) which provides public employees with insurance benefits. It also administers the Minnesota Employee Insurance Program (MEIP) which provides insurance benefit plans to private employees. Wayne Simoneau is the current acting commissioner, replacing Bruce Johnson in September 1995.

Selected Audit Areas and Conclusions

Our audit scope was limited to those areas material to the State of Minnesota's Comprehensive Annual Financial Report for the year ended June 30, 1995. We audited the revenues and expenditures of the State Employee Insurance Program, the Public Employee Insurance Program, the Minnesota Employees Insurance Program, and the estimated workers' compensation liability.

The DOER Insurance Division manages several insurance programs which covers state, public, and certain private employees. The division adequately ensures that the enrollment data in the state's insurance system agrees with carrier enrollments. The division properly bills and collects premiums for enrollees maintained on the state's insurance system; however, improved financial control is needed over premiums collected for enrollees not maintained on this system. The Employee Insurance Fund has accumulated significant cash funds averaging over $79 million daily during fiscal year 1995; however, these funds are not aggressively invested. In addition, the department should take a more active oversight role involving key financial provisions and limits of its State Health Plan under contract with Blue Cross Blue Shield. We also noted concerns with payment invoices missing from fiscal services files and other controls over contract services.

The DOER Workers' Compensation Program manages and controls claims costs for work-related injuries to state employees. Workers' compensation specialists maintain a computerized system to estimate the state's financial exposure to these injuries. However, DOER does not always retain critical information supporting the estimated liability determination.


Office of the Legislative Auditor, Room 140, 658 Cedar St., St. Paul, MN 55155 : or 651‑296‑4708