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Denver comp program failed to implement recommendations: Auditor

Denver city hall

The City and County of Denver’s Department of Finance failed to implement multiple recommendations regarding its workers compensation program made by an audit team in 2018, according to an audit released Thursday.

In the report, Denver City Auditor Tim O’Brien noted that five of 15 recommendations made to reduce risk associated with the city’s workers compensation program were implemented following the October 2018 audit. The city maintains a self-insured and self-administered workers comp program and purchases excess coverage for individual occurrence costs greater than $2.5 million.

According to the auditor, the city failed to properly charge workers comp salary continuation benefits, resulting in a 10% understatement in total workers comp costs.

The report also said the workers comp program failed to have a formal strategic plan, its risk management information system failed to support its current business practices, and the program failed to adequately follow through on obtaining and reviewing vendors’ service organization controls reports.

However, Denver did follow 2018 audit advice in implementing a payroll system for indemnity payments, evaluating the self-insurance retention level, updating business policies and procedures annually, strengthening check handling controls, and adding a formal review process for injured workers with multiple workers comp claims.