Key Finding and Recommendation
Legally mandated transfers to the state’s General Fund will significantly reduce the State Employee Group Insurance Program (SEGIP) reserves. In addition, because insurance premiums for some employees were paid from federal funds, regulations require an equitable refund to the federal government for its share of funds transferred. We recommended that the Department of Employee Relations work with the Department of Finance to determine the amount owed and to build reserves beyond the minimum level.
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 2003 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 statements for the State Employee Insurance Fund and Public Employee Insurance Fund, which are administered by the department.