City audit reveals critical gaps in employee benefits management

In a recent government meeting, officials discussed the findings of an audit conducted on the city’s employee benefits program, which spans from January 2022 to January 2024. The audit aimed to ensure that only eligible employees, retirees, and their dependents receive appropriate benefits, verify payroll deductions, and assess the accuracy of benefits bill payments.

The city operates a self-funded health insurance program, meaning that all medical and dental claims are paid directly by the city. The audit revealed that the benefits billing program is managed by three third-party administrators (TPAs) and involves partnerships with 15 benefit providers, offering a range of options including medical, dental, vision, and life insurance.

Key findings from the audit indicated that employee benefit selections and payroll deductions were accurate for the November 2023 pay period. Additionally, benefit bill payments to providers were found to be appropriately approved and accurate. However, the audit identified a significant issue: a delinquent payment of $423,000 due to the city for retiree and COBRA premiums in November 2023, which was received one month late.

In response to these findings, management has agreed to enhance their reconciliation and monitoring processes to ensure timely receipt of all payments. A follow-up meeting with the TPA has already taken place to address the delays, and new monitoring protocols have been implemented to prevent future occurrences.

The audit also highlighted improvements made since the last review in 2020, including the engagement of a third-party consultant to develop a strategic plan for the benefits program. These steps reflect the city’s commitment to maintaining the integrity and accuracy of its employee benefits system.