Watchdog documents ongoing workers’ compensation struggles

Managing workers’ compensation benefits remains a challenge for federal agencies, and it’s driving up program costs, according to a new watchdog report.

The Government Accountability Office conducted an audit of Labor Department and inspectors general reports on implementation of the Federal Employees’ Compensation Act, dating back to 2004. The 1916 law, designed to provide compensation for workers injured on the job, has not been amended in 38 years and management and oversight problems have continued to hamper the program’s implementation and make it vulnerable to waste and abuse, the report said.

“Specifically, Labor cited oversight difficulties such as verifying beneficiaries’ program eligibility, managing payments while balancing timeliness and accuracy, and communicating with employing departments and agencies,” GAO stated. Agencies often lacked policies and procedures to manage the program properly, or did not follow them, GAO added. For instance, better controls “would have enabled staff to verify beneficiaries’ continued eligibility,” the report noted.

One agency had difficulty managing the long-term beneficiary rolls and reining in improper payments because staff assigned to the task spent no more than 10 percent of their time managing cases, a 2007 IG report found.

GAO warned in its report that these kinds of deficiencies could lead to fraud and abuse. The IG at one department reported avoidable costs on FECA were as high as $41 million in 2011.

Many past recommendations for improvement have been implemented, however, GAO said. Inspectors general and lawmakers have further tried to control FECA program costs through reforming administrative procedures and changing the amount employees receive at retirement age.

GAO incorporated responses from the Labor Department in its report, which was dated March 21 but released Friday.

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