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North Carolina State Auditor Finds Expected Errors At Industrial Commission

Workers Compensation uninsureds in North Carolina have been a hot button topic for many months since a newspaper reporter found 30,000 employers without coverage for their employees.   A recent audit was released by the NC State Auditor’s department on this very subject.

Map of North Carolina State Auditor
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The NC State Auditor found what was already in the press and on the mind of Governor Pat McCrory when he took office.

A summary of the findings:

  • Two sources available for data to cross-match are the Employment Security Commission and the NC Rate Bureau
  • During the audit was when the Industrial Commission started to obtain data from the two aforementioned sources
  • The NC Industrial Commission did not follow up on the data they were provided by the NC Rate Bureau previously – 11,323 businesses had let coverage lapse in 2012.  The Industrial Commission followed up on none of these.
  • In 2011, $79,025 was assessed in penalties of which $59,925 was collected.
  • In 2012, $6.5 million was assessed of which only 2%  had been collected.
  • In comparison, South Carolina had collected 75% of the $2.8 million in fines assessed.
  • The North Carolina School State School System would have received the fine money if properly assessed and collected.

    Picture Industrial Commission North Carolina State Auditor
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In the Industrial Commission’s response, one of the recommendations was to contact states with data matching program.  West Virginia was very successful in its fines and collection procedures.   West Virginia even posted signs at the businesses or work sites that the employer did not have a policy or other type of coverage.

A good recommendation would be to use Microsoft Access for the data matching.   Excel reports could be pulled once the data is converted to a usable database.  Is that something the new state agency GBICC (see last article) could do to provide this data? Possibly   Is the data matching that hard to accomplish in a short period of time?  No. 

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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