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YELLOW SHEET Office of the State Auditor of Missouri |
July 31, 2003
Report No. 2003-77
The following problems
were discovered as a result of an audit conducted by our office of the
Department of Insurance (MDI).
The MDI's current travel policies allow its insurance examiners domiciled in the same location and working on the same examination to use different travel methods, which has resulted in higher travel costs.� On at least two occasions, examiners assigned to the same examination used different travel methods or worked different schedules, and travel costs could have been reduced on these examinations if all examiners had worked the same schedules.�� In addition, the MDI does not require examiners to ride together in personal vehicles when driving to the examination site or to the airport.� Because examiners are reimbursed for travel in personal vehicles, requiring employees to ride together would result in lower travel costs.� Travel costs incurred by examiners totaled $1.49 million, $1.29 million, and $1.31 million for fiscal years 2002, 2001, and 2000, respectively.
Similar conditions were noted in our prior audit.� Because of the significant amount of travel costs incurred by examiners, it is important that the MDI adopt travel policies which require cost-efficient travel methods be followed by all examiners.
The MDI has not certified delinquent premium tax collections on certain policies (called surplus lines policies) on a timely basis.� The MDI certified delinquent collections totaling $811,312 and $266,074 due in 2002 and 2001, respectively, to the Department of Revenue (DOR) in January 2003.� The DOR is responsible for collecting interest and penalties on premium taxes and the amount of interest and penalties to be collected for these delinquent taxes totaled $102,724 and $41,288 for 2002 and 2001, respectively.� A cooperative agreement between the MDI and the DOR requires certification of delinquent premium taxes every six months.
The MDI receives a federal grant from the U.S. Department of Health and Human Services (DHHS), which it uses to contract with a not-for-profit foundation to provide insurance counseling services for senior citizens.� To obtain payment from the MDI, the foundation submits monthly invoices listing the hours spent by various personnel, the hourly reimbursement rate, and other operating expenses.� The MDI does not require the foundation to provide detailed documentation supporting the amounts claimed for reimbursement.� The foundations bills for actual indirect costs and fringe benefits not to exceed the rates approved by the DHHS for another contract with the foundation; however, the MDI has not required the foundation to provide documentation for these rates.�� A similar condition was noted in our prior audit.
