State Auditor Has Concerns with L&I's Pension System

March 2, 2009

A new report out from the office of the State Auditor finds that the Department of Labor and Industries' pension "system's internal controls are inadequate to ensure public resources are safeguarded."

The Auditor's office found that L&I, which runs the state's Workers' Compensation program among other things, only reviews about 20% of pension payments under $25,000. In fiscal year 2008, there were $8.8 million worth of pension payments for less than $25,000. The Department has one-time payments over $25,000 independently reviewed. 

Fraud, abuse or miscalculations are top concerns for state officials, particularly within L&I. This Department deals with a massive financial system and so any hiccups can result in million of dollars wasted (see the whole Retro fiasco fro!
m a few weeks back). In fact, for years Washington Policy Center has advocated for tighter fraud prevention efforts from both L&I and Employment Security, which handles unemployment checks.

The Auditor's report does not state that there actually was any misuse or abuse of the system, but it did say that "system weaknesses increase the risk that payments could be made to people who are no longer eligible for benefits. Additionally, they increase the risk that inappropriate payments, due to error or misappropriation, could occur."

Our hope is that L&I take the findings by the Auditor's office seriously. While steps have been taken over the years by L&I to cut down on misappropriation of taxpayer dollars, if the State Auditor is still finding holes in the system those holes should be addressed immediately. 

Comments

re: State Auditor Has Concerns with L&I's Pension System

Thank You for the information. L & I has an online fraud referral system (you do not have to reveal your idenity to file a fraud report) at their website at http://access.wa.gov/business/fraud.aspx
I will be looking into this individual
Labor & Industries
Investigator

re: State Auditor Has Concerns with L&I's Pension System

Why do you assume that in order to be on L&I that you have to be poverty stricken? L&I is not charity or welfare. It is a fund that you have paid into for many years of hard work and is yours to use in case of an on-the-job injury. Sounds to me like you're just jealous that he invested wisely while he was working and has something to show for his labors.