Report Summary
Management Letter
Department of Employee Relations
Fiscal Year Ended June 30, 2002
Key Findings and Recommendations
- The Department of Employee Relations (DOER) does not prepare written agreements with certain non-state organizations enrolled in the State Employee Group Insurance Program. We recommended that written agreements be developed to clarify the billing, payment, and administrative responsibilities, as well as residual funding arrangements should the organizations terminate from the insurance program.
- DOER needs to improve the reporting of required supplemental financial information for the Public Employees Insurance Program (PEIP). Government accounting standards require that public-entity risk pools present historic balances and financial information for the past ten years. The Department of Finance was able to gather fund-level financial information from prior Comprehensive Annual Financial Reports since the fund became self-insured in 1998; however, the accounting pronouncement also calls for other financial details that were not available for inclusion. We recommended that DOER work with the Department of Finance to gather and report the necessary required supplemental financial information.
Management letters address internal control weaknesses and noncompliance issues found during our annual audit of the state's financial statements and federally funded programs. The scope of work in individual agencies is limited. During the fiscal year 2002 audit, our work at the Department of Employee Relations focused on financial reporting for statewide payroll and fringe benefit costs, and liabilities for state employee compensated absences and workers' compensation. We also examined the financial reporting of activities of the State Employee Insurance Fund and Public Employee Insurance Fund administered by the department.
