For Immediate Release:
February 10, 1997
For additional information contact:
Bob Slade, Executive Assistant
(919) 733-3217
State Auditor Ralph Campbell, Jr. today released a performance audit report on the Workers’ Compensation Program in North Carolina as administered by the North Carolina Industrial Commission, organizationally located in the Department of Commerce. The program is a "no-fault" system which entitles workers to benefits for on-the-job injuries without having to prove employer negligence and which provides the vast majority of employers in the State with protection from unlimited liability for employee injuries. The Commission is also responsible for the administration of tort claims against the State, the childhood vaccine-related injury compensation program, and death benefits for firemen, rescue workers, law enforcement officers, and the civil air patrol. This audit was legislatively commissioned by the 1996 Second Session of the General Assembly, and reviewed only the Workers’ Compensation Program.
For fiscal year 1996, the Commission processed approximately 87,000 workers’ compensation claims and 4,700 requests for hearings. Additionally, the Commission held 2,500 initial hearings and heard over 600 appeals. Total operating expenses for the Industrial Commission during that year were $8.7 million. In addition, the State of North Carolina, as a covered employer, paid benefit claims to state employees of $28.5 million, and expended approximately $681,000 to manage the Workers’ Compensation Program in the various state agencies.
State Auditor Campbell stated, "It is imperative that we provide a system which is fair and utilizes every means to provide workers with just and expeditious compensation for their work-related injuries. To help meet this goal, we focused on achieving a complete understanding the total operations of the program, including where workers’ compensation personnel are located throughout state agencies. We also determined the costs associated with the administration of the program, and we identified areas where the effectiveness and efficiency of program operations could be improved."
Auditor Campbell continued, "Procedurally, we determined that the Commission should:
clearly define the "backlog" of pending cases and refine case management to improve the timeliness of hearing cases and prevent overstating the backlog,
expand the use of mediation to settle cases rather than using the formal hearings process to improve the timeliness of handling disputed cases, and
standardize statistical reports on program operations to provide reliable program data for evaluation by the public, private businesses, state agencies, and the General Assembly."
"Organizationally," Mr. Campbell said, "we have identified a number of areas where we believe staffing changes would
enhance operations. Specifically, we recommended that the Commission should:
request from the Office of State Personnel a classification study for the workers’ compensation nurses,
examine the workloads of personnel in the medical fees section and the necessity of maintaining the ratio of a legal secretary for each deputy commissioner,
change procedures to have the Safety Education section target employers with high accident rates and consider consolidation of this function with that performed by the OSHA division within the Department of Labor, and
improve coordination with the Department of Insurance for Fraud Investigations and consider consolidating these two units."
The Office of State Personnel (OSP) conducted a study of Commission salaries as required by the legislation. In this study, State Personnel evaluated the current salary levels for the Commissioners and certain other positions within the Industrial Commission. Major findings of the study as concurred with by the Office of the State Auditor were:
the salary for the Chairman could be increased to $88,460 from $72,638;
salaries for the Commissioners could be increased to $86,752 from $70,869, and
the salary range for the Deputy Commissioner classification (grade 83 with a range of $50,143 - $84,512) was found to be competitive and no change in the pay range for the class was recommended, although in-range adjustments to correct individual problems should be considered.
State Auditor Campbell concluded, "The North Carolina Industrial Commission has a difficult task in administering the
Workers’ Compensation Program on behalf of North Carolina’s many employers and their employees. We were encouraged
by the fact that the Chairman has been receptive to the procedural recommendations contained in this report, and, in fact, the
Commission has already taken steps to implement many of the recommendations."
Copies of the report including the agency response are available by contacting the Office of the State Auditor at the address
above or by electronic mail (reports@aud.osa.state.nc.us). The full text of the report and this press release are also listed
on the OSA Internet home page, http://www.osa.state.nc.us/OSA/.
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