Audit: South Carolina Workers’ Comp Board Delayed Money Deposits

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The state’s Workers’ Compensation Commission broke state law by not depositing fines as it worried legislators would use the money for something else, according to a state audit.

The commission collected but delayed for weeks depositing $244,000, the Legislative Audit Council said in its report.

“This action was taken so that, in the event the General Assembly prohibited agencies from keeping their unexpended funds at the end of the fiscal year, the commission would not have these funds for the General Assembly to take away,” according to the report.

“Failing to promptly deposit fines, fees, or any other funds the agency collects violates state law,” the report said.

The commission said in its response to the audit that it only had intended to delay collecting the fines until the new fiscal year began in July. That decision wasn’t understood within the agency and instead staff delayed depositing fines for five weeks, the agency said. The deposits were made when the council’s auditors discovered the violation.

Meanwhile, the council said the commission isn’t doing enough to identify employers who don’t carry required workers’ compensation insurance. The agency is supposed to have two compliance officers who, among other things, check data with the state Department of Employment of Workforce against commission records. Their goal is follow up on at least 50 matches to verify coverage and assess fines if needed and the audit said an extra compliance officer should be hired to generate more fines.

The commission said that 50-employer check was set as a performance standard for compliance officers when the program started and it is not a sound benchmark for enforcing compliance.

SC Audit of Workers’ Comp