By DAN REYNOLDS, senior editor of Risk & Insurance®
D.C. Risk Management Office
On March 10, 2011, the office of District of Columbia Auditor General Deborah Nichols issued an examination report on D.C.'s office of risk management's oversight of the district's disability compensation program.
Kelly Valentine, the former director of the office of risk management, was "separated from the district government effective Sept. 14, 2010." according to the report.
Valentine had been placed on administrative leave with pay on July 7, 2010. According to the Washington City Paper, Phillip Lattimore has been named as the office of risk management's new director.
Among the auditor's findings were that the office of risk management and the district's office of finance and resource management failed to record and remit an estimated $8.7 million in deducted health and life insurance premiums.
The examination also found that the office of risk management failed to conduct timely verification or reconciliation of invoices prior to payment of $2.3 million to insurance carriers.
The auditors also found that Valentine, in her role as director, improperly modified the terms of the district's third party administrator, Sedgwick Claims Management Services, and withheld $1.09 million in payments to the third party administrator.
According to the report, Sedgwick became the district's third party administrator for the district's disability management program when it acquired Comp Management of Virginia, Inc. on Sept. 13, 2006.
Delaware River Port Authority
A spokesperson for the Philadelphia-based Graham Company said in April of 2011 that the company "remains involved with part of the DRPA program," but wouldn't comment on the authority's other contracts.
Graham Company CEO William Graham IV had objected to the fact that the authority had insisted that his company participate in a "true-up" deal in which it paid $514,310 since 2004 to Willis of New Jersey to insure a 50-50 split of brokerage services for the authority. The authority had put out requests for qualifications for its owner-controlled insurance program and other programs but no update on those programs was available.
A phone call to Phyllis Hurks-Hill, the general counsel for the Detroit Public School System was not returned. She is no relation to Stephen Hill, the former risk manager for the district who was sued by the district in 2008.
In its lawsuit, the district alleged that Stephen Hill had created a shadow risk management department that awarded contracts without district oversight and received kickbacks.
May 1, 2011
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