An independent audit report for fiscal 2004 shows continued positive
financial trends for the West Virginia Workers’ Compensation Commission, according to Executive Director Gregory Burton.
The report cites a deficit or unfunded liability for the combined funds of the Workers’ Compensation Commission of $2.965 billion, compared to $3.1 billion for fiscal 2003. The deficit represents the
amount that total liabilities exceed total assets.
“The auditors have issued a clean audit opinion,” Burton said. “This confirms that our financial statements are fairly and accurately presented.”
The Commission’s total liabilities as of June 30, 2004 were $4.277 billion. Total assets of $1.312 billion offset these liabilities, leaving the unfunded liability or deficit at $2.965 billion. The Commission oversees the Workers’ Compensation Fund, as well as the Coal Workers’ Pneumoconiosis Fund and the Employers’ Excess Liability Fund. The CWPF had net assets of $30.3 million at the conclusion of fiscal 2004, while the EELF had net assets of $13 million.
“These figures are encouraging but they also show that we’ve still got a long way to go,” Burton said. “The West Virginia Supreme Court’s favorable ruling in the Wampler Foods / Thompson case allows us to move forward and more fully implement the reforms called for in Senate Bill 2013.”
The fiscal 2003 audit recognized about $330 million in savings resulting from SB 2013. The new audit for fiscal 2004 recognizes an additional $144 million in savings resulting from the landmark reform legislation.
“The new audit conservatively recognized the future benefits of all expected, quantifiable changes resulting from Senate Bill 2013,” Burton explained. “As these changes work their way through the
system, the deficit trending is expected to continue downward.”
In addition, Burton said the audit’s improved outlook reflects $85 million in increased revenue from employers resulting from premium increases of up to 15 percent authorized in the reform legislation, as well as the Commission’s success in reducing payments to medical vendors by 16 percent or $37 million in fiscal 2004 compared to fiscal 2003.
Burton noted, “Our collections activity also has been a bright spot for the Commission. The percentage of employers in good standing – those who keep up to date with their premium payments – has been consistently higher than at any other time since we’ve tracked these numbers. In calendar year 2003, on average, 88.5 percent of employers stayed in good standing. So far in calendar 2004, the average has increased to 89.6 percent.”
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