Learn More Open the Books

Auditor’s report proves the need for forensic audits…

…If not much, much more.

The Auditor General’s Report on the Management Audit of the Workers’ Compensation Program is out. You can find the various versions here (Summary HTML), here (Summary PDF), and here (full version PDF).

While no one in Illinois doubts the integrity of the Auditor General’s department, this audit proves that the auditor general processes, along with the powers of the office, are inadequate when it comes to dealing will Illinois’ special brand of non-governance.

First, let’s look at what sparked this audit.

In late 2010, the Bellville News Democrat “reported that nearly 389 Menard employees received $10 million from taxpayers for workers’ compensation injuries. More than 230 claims were filed by guards for repetitive trauma damage to their wrists and elbows that were caused by locking and unlock cell doors.” This must be due to the extra hard springs and mechanics inside Illinois prison doors. Regardless, the story triggered a Federal investigation, which seems to be on-going.

It also triggered HR 131, which can be read here.

HR 131 resolves that roles of CMS (Central Management Services), The Workers’ Compensation Commission, and the Attorney General’s office be “analyzed,” along with settlement and arbitrator processes. It calls for a review of “conflict of interest” policies, along with a comparison of claims history by State workers to claims filed by all other workers covered under the Workers’ Compensation program. To make sure that the resolution is serious, it requires that the agencies being audited “cooperate” with the Auditor General.

The outcome? A pretty report, full of facts and figures, which is tepidly critical of missing data, the absurd lack of integrity, procedural controls, or standards. Laws regarding integrity in the arbitration process are ignored, and were found to be inconsistent. It culminates in a set of “recommendations.”

From the report;

…the General Assembly may wish to consider further changes to the structure and operations of the Workers’ Compensation Program as it applies to State employees. (pages 123-125)

Then again, they may not. That’s the problem. Thus endeth the saga of another “management audit” in Illinois.

Forensic Audits are the solution

For the Good of Illinois has taken its share of criticism for our position that the entire state needs systemic forensic audits of every agency going back as far as possible. We hear that such audits are “expensive” and “take time and resources” away from government agencies. Our response? A Forensic Audit, conducted in an adversarial manner, would NOT have cost the city of Dixon $30-50 million dollars. The tepid CAFR (comprehensive audited financial report) did cost Dixon that much, simply by rubber-stamping pro-forma audits of a corrupt set of books.

We submit that the Workers’ Comp audit discussed above proves our critics wrong. There simply isn’t enough clout to the existing audit procedures to force change – and it is force that is required.

The audits we need in Illinois should provide for claw-backs of misspent money and criminal charges for fraud and malfeasance. Audits should also result in firings of state employees who ignore procedures, rules, and regulations attached to their job description and offices. Loss of pension benefits for malfeasance should be considered as well.

When nearly 35% of state employees are in some form of Workers’ Compensation case against their employer, it is time for the entire system to be gutted and rebuilt. Management Audits simply aren’t up to the task.

Below are some outcomes from the Summary Section of the Auditor’s report.


According to data received from CMS, for the period January 1, 2007, through December 31, 2010, State employees filed a total of 26,101 workers’ compensation claims. Two types of injuries accounted for three-quarters of all injuries (sprains and contusions). For 13,412 (51%) claims, the primary injury
involved a sprain. Contusions accounted for another 6,235 (24%) claims.

Number of Claims Filed by Agency

Three agencies accounted for 16,629 (64%) of the total claims filed during 2007-2010 (DHS, Corrections, and IDOT). Together, DHS and Corrections comprised over half of all claims (53%) filed, at 8,950 and 4,989 claims filed, respectively (See Digest Exhibit 1). Certain facilities and employing units drive the large number of claims that were filed by these two agencies. At DHS, for instance, employees
at Chester Mental Health Center filed 1,180 claims during the four-year period, giving that facility the highest number of claims for any facility or employing unit in State government during that timeframe. Overall, six of the top 10 employing units for workers’ compensation claims filed during 2007-
2010 were DHS mental health or developmental centers.


Public Act 097-018, effective June 28, 2011, imposed additional requirements on DOI for the purpose of identifying and detecting workers’ compensation fraud. The Fraud Unit at the Department of Insurance is required to procure and implement a system utilizing analytics such as predictive modeling, data mining, social network analysis, and scoring algorithms for the detection and prevention of fraud, waste,
and abuse. The Act states that this system must be implemented on or before January 1, 2012. As of February 28, 2012, the DOI Fraud Unit had not procured or implemented the required system. (pages 115-122)

Leave a Comment

No Responses to "Auditor’s report proves the need for forensic audits…"

No comments yet