The audit report for ASG for Fiscal Year 2019 lists among its findings a miscalculation of workers’ compensation.
The auditors noted severalrs in formulas and calculation of net present value, resulting in a significant adjustment to the accrued workers compensation liability.
Additionally there appeared to be no substantial baseline to substantiate the methodology used to calculate the liability .
“The effect of not having an appropriate baseline, or reasonable estimate could be material to the financial statements,” said the auditors.
Errors related to the incorrect calculation based on family members receiving benefits, or age calculations were also found.
According to the audit report accrued workman’s compensation claims at the end of FY2019 stood at $2.6 million. The year before compensation claims were recorded at $3.1 million.
The auditors recommended that that ASG acquire the services of a licensed actuary to review their estimates and calculations to determine a proper baseline similar to the requirement of post employment benefit plans, which determine appropriate life expectancy and which will also account for those receiving benefits beyond the life expectancy period.
ASG agreed with the finding. Treasury met with the Workman’s Compensation Commission in February 2019 to present and explain the purpose and reasons for an actuary report.
The Commission accepted the proposal and will work with Treasury to acquire an actuary.
The FY2019 audit for ASG also identified control deficiencies with ecise tax documentation.
The auditors said supporting documents related to the collection of excise taxes could not be found.
Based on their sample size and the number of samples that were missing documentation the auditors were still able to validate with reasonable assurance the balance of excise tax reported in the financial statements.
However with the number of lost documents noticed in the sample, there appears to be a control deficiency that should be corrected.
They were unable to determine through their inquiries and review of procedures how or why the documents were not available for review.
Said the auditors, “With the amount of paper files, it’s possible that the documents were misfiled, attached to other documents or were misplaced and lost.”
The auditors recommended that management and staff review the procedures for processing paperwork related to excise taxes.
They also recommended that the government consider an electronic filing system with unique identifiers contained in the documents that would allow them to be searched if misfiled or misplaced.
ASG agrees with this finding. A Corrective Action Plan by Treasury included that supervisors of the appropriate Divisions of Treasury will be responsible to ensure their sections follow the records management flowchart implemented in the standard operating procedures.
