City Controller Wendy Greuel issued her latest audit, raising serious concerns about the City’s Worker’s Compensation Salary Continuation Program for employees injured on the job. Her audit finds potential savings of up to $5.2 million annually by bringing the City’s non-sworn employee payment program in line with other jurisdictions in the State of California.
Greuel called on the responsible departments and City leaders to act immediately to protect taxpayer resources and reduce t he benefits to a level comparable with others throughout the State. The State Rate for temporary disability is two thirds of an employee’s take-home pay not to exceed $1 ,067 per week, while Los Angeles pays an employee’s full salary for the first 52 weeks. As all disability pay is tax-exempt by law, the City’s policy creates the potential for earning more than 100% of salary and, in some instances, employees earn more while on disability leave than while working.
“I am deeply concerned by the findings of this audit. While it is critical to support our injured employees, Los Angeles absolutely cannot afford to leave $5 million a year on the table that could go towards keeping our children safe and our roads paved,” said Greuel.
Greuel’s audit found that Injury on Duty (IOD) payments have increased dramatically each of the last four years, from $12.6 million in 2009 to over $19 million in 2012. According to the audit, this increase is most likely a result of employees receiving payments for a longer period of time, rather than an increase in the number of employees receiving payments.
The audit also evaluated system controls to prevent overpayments. A test sampling of payment data identified $127,000 in overpayments due primarily to departments’ failure to terminate salary continuation payments following the 52 week period and a failure to communicate between two independent systems.
“I am pleased that the Personnel Dept is working closely with my Office to enhance oversight and improve communications and controls for Workers Compensation” Greuel said.
Controller Greuel has conducted more than 80 audits and and claims she uncovered more than $160 million that the City has lost to wasteful spending, fraudulent activity, and abuse of city resources.