Atlanta’s auditor says the city is likely short hundreds of thousands of dollars in unreimbursed retiree insurance costs due to a lack of tracking.
The city pays insurers for health benefits and receives reimbursements for retiree contributions through pension payroll deductions for retirees enrolled in the city’s benefit plan. Retirees enrolled in the plan are responsible for covering outstanding costs. Although the city’s medical plans are compliant and affordable under the federal Affordable Care Act, city auditors revealed last week that a lack of tracking led to the city continuing coverage for 31 retirees after they died.
Atlanta’s Employee Benefits Division logs payments received, but the audit found the city does not maintain a list of retirees who must make payments, nor does it have a process to reconcile retiree payments with what the city is owed.
The auditors estimate approximately $276,000 is owed to the city for last year’s retiree insurance payments.
“We were unable to identify the proper contribution for each retiree because some of the service history data in Oracle is inaccurate,” said Senior Performance Auditor Anijarae Dade. “Some retiree and survivor records showed the same date as both the hire and the retirement date.”
Dade told the Atlanta City Council’s Finance and Executive Committee the city is not always notified when a retiree dies, but she said the city is working with Deloitte to gather missing data and collect service history and pay contribution for employees hired before 2010.
The report from Atlanta Auditor Amanda Noble advises Atlanta’s Human Resources commissioner to create an invoicing process for the Benefits division to detect when a retiree is not paying, which may allow the city to sooner identify when a retiree dies. The auditor also wants HR to create a process for reconciling retiree payments to the city.
Dade said the auditor also reviewed a random sample of 410 active employees as of last year and found that 38 employees were charged 20 cents less than the correct rate for their medical plan. Another employee paid the 2020 rate for their dental plan.
When the auditors reviewed benefits for more than 8,000 people, they found that 850 employees enrolled in medical plans were charged 20 cents less than the correct rate. A data entry error in Oracle resulted in one employee being manually enrolled in benefits each week.
The payroll deduction errors led to city employees underpaying for their benefits, forcing the city to overpay to cover the difference, Dade said. The auditors want HR to create a process to review new plan rates before uploading them into Oracle to ensure open enrollment selections are correct.
The city should also implement a monthly discrepancy report to detect incorrect anomalies, the audit said, and it added that Atlanta could assemble a task force to consider alternative ways to provide retiree benefits.
Finally, the audit found no authority is currently responsible for evaluating the effectiveness of the city’s health and wellness programs. Dade said the Benefits staff can’t accurately assess whether these programs have an impact on health outcomes for city employees because the staff lacks a strategic approach and established goals for administering the programs.
The audits advises the city to implement best practices for wellness programs, including setting goals, establishing a wellness committee, evaluating participation, and conducting assessments.
Human Resources Commissioner Tarlesha Smith told councilmembers she agreed with the recommendations. According to the audit, many recommendations have already been implemented.
“This is a good time to say I’m new,” quipped Smith, who started Sept. 26. “I’ve already started assembling the teams to address these issues.”
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