What I learned from a recent audit

I like to attend BWC audits with my clients. I can bring clarification for the auditor and minimize changes that are detrimental to my clients. Often I learn something. Here’s what I learned from the latest audit I attended.

The BWC is concerned about the financial health of its customers, so it schedules an audit to cover one year. If the audit results in a refund for the company, the BWC may audit a second year hoping to return more money to its customer. If the audit results in additional premiums due from the company, the BWC will not look at a second year.

I encouraged our auditor to take a tour of the workplace. Once he saw what work was performed, he spent more than 30 minutes looking for a less expensive manual classification, because the risk of injury at my client’s facility was obviously less than the risk at other companies in the same classification. He didn’t find a better classification, but he really tried.

Only partners in a partnership are bound by the minimum & maximum reporting requirements (assuming they have elected coverage). The President and Vice President in a partnership are titles, not elected officers as in a corporation, and so their compensation is reportable as employees.

There has been a BWC committee since 2006 to eliminate the minimum and maximum reporting requirements. The minimums discourage sole proprietors and partners from electing coverage for themselves. Nonprofits, like the Elks and the Eagles, have to report minimums & pay premiums to cover their officers, who are often unpaid volunteers.

 

Posted in audit, partner, premiums, sole proprietor.