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Audit: City workers' comp costs keep growing

Posted at 11:39 AM, May 10, 2022
and last updated 2022-05-10 20:37:37-04

SAN DIEGO (KGTV) — The city of San Diego is seeking its worker's compensation spending to rise annually, but isn't taking the necessary steps to curb the cost, a new audit found.

The audit, released this week, says last fiscal year the city spent $40.7 million in employee medical expenses and industrial leave. But when accounting for indirect costs such as lost productivity, that amount skyrockets to $224 million, an amount higher than the library and parks and recreation annual budgets combined.

"The City’s employees are its most valuable asset, and they expect and deserve a safe workplace." the audit said. "Each employee injured or made ill in a work-related incident is a colleague who would otherwise be healthy. Moreover, workplace injuries can cause suffering and financial hardships for employees and their families. It is part of the City’s responsibility as an employer to ensure that the workplace is safe and injuries and illnesses are kept to a minimum for the good of its employees."

The audit says the amounts spent on workers comp have increased each fiscal year for the past five years, and the city's workers comp claim rates are 17 percent higher than similar agencies.

It found that some department safety programs do not address core elements of the city's Injury and Illness Prevention Program. Additionally, the audit says the city does not systematically collect and track injury, illness and near-miss data to identify safety issues.

Finally, the audit says while city claims adjusters are trained to identify red flags for potential fraud, the city does not centrally track all allegations of fraud and outcomes of investigations. Notably, the audit did not find any "ghost" employees no longer with the city but collecting benefits.

The audit made 10 recommendations, including establishing roles and responsibilities for department specific injury and illness prevention, providing annual notifications on how to report safety concerns, establish safety goals and performance indicators for operating departments, develop a citywide safety incident investigation program, and update the procedures for monitoring red flags for fraud.