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January 8, 2025

Audit: Unit in Comptroller’s office lacked ‘sufficient’ controls and led to mistakes in life insurance payments

CTMIRROR.ORG FILE PHOTO State Comptroller Sean Scanlon
By David Krechevsky

A report released Wednesday by state auditors found that a unit within the Office of the State Comptroller inaccurately calculated payouts of group life insurance benefits.

The report by the state Auditors of Public Accounts, which investigated the fiscal years ended June 30 of 2020 and 2021, states that the Comptroller’s Healthcare Policy and Benefit Services Division “lacked sufficient internal controls over group life insurance benefit calculations and payments, resulting in inaccurate calculations and payouts to beneficiaries.”

The auditors also found “delayed notifications and payments to beneficiaries,” it said.

According to the report, the comptroller’s office did not have a process “to reconcile overpayment credits and adjustments to supporting documentation on monthly healthcare contractor invoices. The office was unable to verify the total monthly credits were supported and applied correctly.”

The auditors said they reviewed 15 retiree health contribution refunds, totaling $425,639, and found that the division “did not maintain evidence of its review for four refunds, totaling $143,825.”

The auditors stated that they selected 54 payments to the four healthcare contractors to review for accuracy. 

“For the prescription insurance provider, five of the selected payments included $1,728,225 in monthly administrative fees,” the report states. “We were unable to verify these five fees due to lack of proper support.”

According to the auditors, for one monthly dental insurance premium payment totaling $7,306,457, “we noted $3,450,000 was not adequately supported. The contractor billed the unsupported portion based on the number of retirees.”

The audit report includes four recommendations for the Comptroller’s office:

  • That it should improve its internal controls to ensure it correctly calculates life insurance coverage amounts in accordance with state law, and correct errors resulting from the miscalculation of plan member life insurance coverage.
  • It should implement internal controls to ensure it correctly credits all overpayments due to the state.
  • It should establish internal controls to ensure that it properly reviews and supports contribution refunds prior to processing, and
  • It should perform reconciliations of payments to healthcare contractors to ensure it pays the proper amount for benefits and services.

In its response to the audit, which is included in the report, the Comptroller’s office said it is taking steps to correct the issues cited.

“In addition, the division is seeking an outside audit firm to review, audit and verify all fees and adjustments applied by our medical, pharmacy and dental carriers, which will further ensure proper payments moving forward.” 

Madi Csejka, a spokesperson for the Comptroller's office, noted that the audit for 2020 and 2021 pre-dates the terms in office of both Comptroller Sean Scanlon and Healthcare Policy and Benefits Services Division Director Josh Wojcik.

"Upon his appointment, and prior to the initiation of this audit, Division Director Wojcik called for a review of policies and procedures, which actually resulted in the rectification of the risks identified in this report," Csejka said. "The Office of the State Comptroller remains committed to examining and refining our policies and procedures.”

You can read the full report here.

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