The state of New Jersey failed to address issues with its $96 million Workers’ Compensation Program.
That’s according to the Office of the State Comptroller (OSC), which released a report in July that contended the Treasury Department’s Division of Risk Management did not work to address deficiencies identified three years prior via a separate report.
“The division didn’t follow through on most of what it said it would do,” said Kevin Walsh, Acting State Comptroller, regarding the directives put forth following the 2020 report. OSC said the Division did not implement any of the seven recommendations made in that report.
Wasted Tax Dollars
OSC noted that as a result of this inaction, the state faced a greater risk of preventable workplace injuries, spurious claims, and wasted tax dollars.
“The state’s failure to prevent abuse is putting the taxpayers’ money and employee safety at risk. As of now, the risk of fraud, waste, and abuse in New Jersey’s workers’ compensation system remains unacceptably high,” Walsh added.
Lack of Review Processes
OSC’s report found the division did not conduct regular reviews on its employees who were out on long-term leave. In 2020, OSC recommended quarterly reviews of claimants who received more than 270 days of payments.
In the 2023 audit, OSC examined a group of claimants that received more than 600 days of payments on average. OSC did not find evidence of quarterly reviews being completed for these claimants.
OSC noted the division still lacked a formal policy for tracking and managing of multiple claimants or locations with multiple claims. The agency examined the files of ten claimants who collectively filed 300 claims during the course of their state employments, and OSC found no evidence of surveillance, site visits, or safety training.
Incorrect Payments Remain a Risk
OSC noted that as the Treasury relied on wage data from human resources units at other agencies, payments could be decided on inaccurate information. The division’s written policies also provided contradictory instructions on how to calculate wage benefits, which increased the likelihood of errors.
An outside vendor that managed medical services for injured workers wasn’t properly or adequately monitored despite the 2020 recommendations and the division continued to accept the vendor’s self-reporting on timeliness metrics regarding estimated return-to-work dates for injured workers, according to OSC.
Finally, the division claimed that it did not have the ability to prevent injuries to state employees and that only other agencies can do so. OSC disputed that, offering the division misunderstood its role within state government.
“Given the amount of public funds at stake, and the importance of having a safe workplace, it is time for the division to take our recommendations much more seriously,” concluded Walsh.