OIG Audit Finds Improvements in the Administration of the Civilian Workers’ Compensation Program Under the Department of Finance

July 31, 2024

FOR RELEASE:
July 31, 2024

PRESS CONTACT:
Deanna Shoss, Communications, 773-478-8417

The City of ChicagoOffice of Inspector General(OIG) has released an audit of the Departmentof Finance's (DOF) administration of the City's civilian Workers' Compensation program; administration of that program has improved since DOF took it over from former Alderperson Edward Burke's City Council Committee on Finance in 2019. DOF initially hired the audit and advisory firm Grant Thornton to review the Program and "identify potential patterns or instances of fraud, waste, and abuse." OIG finds that DOF has substantially implemented the corrective actions recommended by Grant Thornton. Given the historical gaps in oversight of, and transparency into the Program, OIG recommends that DOF improve annual reporting procedures to foster public confidence.

"At the time of our audit, the Program had more than 2,000 open claims expected to cost over half a billion dollars. Despite its enormous scale, Workers' Compensation has historically operated in a windowless room-with no public transparency, no meaningful oversight, and no effective accountability," said Deborah Witzburg, Inspector General for the City of Chicago. "As the Program is ushered into a new era and the City works to clear a cloud of historical corruption, we welcome the opportunity to shine some light into that room."

The objectives of OIG's audit were to determine whether DOF implemented corrective actions recommended by Grant Thornton in its 2019 report on the Program; and whether it publishes an annual report on the activity of the Program, as required by the Municipal Code of Chicago (MCC).

According to OIG's audit, DOF has taken substantial steps towards implementing the corrective actions outlined in the Grant Thornton report but could further standardize the administration of the Program. DOF's 2021 and 2022 Workers' Compensation Annual Reports show reductions in new claims, shortened time to claim closure, and fewer lost workdays, as compared to the Program's metrics under the management of the Committee on Finance. OIG encourages DOF to implement corrective actions related to the recommendations made in Grant Thorton's report, including clarifying written procedures for program staff and establishing a formal analytic program with peer jurisdictions. DOF should also develop procedures to ensure compliance with the MCC's reporting requirements.

Read the full report published on July 31, 2024 here.

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