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Program A: Administrative

Program Authorization: R.S. 39:1528-1543

PROGRAM DESCRIPTION

The mission of the Administrative Program in the Office of Risk Management (ORM) is to develop, direct, and administer a cost-effective and comprehensive risk management program for all state agencies, boards and commissions of the State of Louisiana and any other entity for which the state has an equity interest, in order to preserve and protect the assets of the State of Louisiana.

The goals of the Administrative Program in the Office of Risk Management are:

1. Improve accountability.

2. Improve efficiency of standard procedures.

3. Minimize losses and achieve financial stability.

4. Identify exposure and losses, actual and potential methods of outcome-based management which focus on the results of reducing the exposure and managing.

5. Maintain sound principles of insurance and management by providing training to entry level adjusters and examiners to instruct them in basic principles and techniques of claims adjusting.

The Administrative Program includes the following activities: Administration, Accounting, Audit/Statistics, Underwriting, and Loss Prevention.

The Administration Unit is charged with directing the primary focus of the agency, the self-insurance program of the state.

The Accounting Unit directs all fiscal operations of the agency, which include cash receipts and disbursements, accounts receivable and payable, payroll, budget, financial statement preparation, special fiscal studies or requests, reports for actuarial analysis, contract preparation and approval, distribution of claims payments, and quality control on the computerized claims management system.

The Audit/Statistics Unit is responsible for all functions required to develop and analyze statistical data for use in premium determination and engineering of risks to reduce losses. It obtains information from accounting, claims and underwriting and develops statistical data to provide information to management for decision making. In addition, it is responsible for claims writing functions, premium development and records management.

The Underwriting Unit is responsible for commercial insurance purchases through a competitive bid process and for billings for all coverages to all state agencies. The unit's goal is to obtain the most effective coverage that is cost-beneficial to the state. All insurance coverages are mandatory, which means that coverage is required by either the ORM, legislative auditors, legislative statues or agency rules and policies.

The Loss Prevention Unit assists all state agencies in the prevention and reduction of employee job-related accidents, injuries, and loss of state property, thereby reducing the direct and indirect costs to the state. The unit analyzes loss experience data for each risk, identifies various causes of losses, and isolates critical causes and locations. It communicates analyses to safety coordinators of various agencies; develops and coordinates a comprehensive loss prevention program for the state, which includes loss control management, facility inspection, accident investigation, rules and regulations and communications; and trains all state agency safety personnel incidental to facility inspections and accident investigations.

The Claims Unit is responsible for all adjusting functions of including investigation, management, and payment of claims.

OBJECTIVES AND PERFORMANCE INDICATORS

Unless otherwise indicated, all objectives are to be accomplished during or by the end of FY 1999-2000. Performance indicators are made up of two parts: name and value. The indicator name describes what is being measured. The indicator value is the numeric value or level achieved within a given measurement period. For budgeting purposes, performance indicator values are shown for the prior fiscal year, the current fiscal year, and alternative funding scenarios (continuation budget level and Executive Budget recommendation level) for the ensuing fiscal year (the fiscal year of the budget document).

 

 

 

 

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded with Fees and Self-generated Revenues. Fees and Self-generated Revenues are derived from premiums billed for insurance provided by this Office and from interest earnings from the self-insurance fund. State and quasi-state entities obtain insurance through the Office of Risk Management.

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

DESCRIPTION

 

 

 

 

 

$0

$6,797,690

137

 

ACT 44 FISCAL YEAR 1998-1999

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

         

$0

$6,797,690

137

 

EXISTING OPERATING BUDGET November 20, 1998

 

 

 

 

 

$0

$88,397

0

 

Annualization of FY 1998 -1999 Classified State Employees Merit Increase

$0

$95,706

0

 

Classified State Employees Merit Increases for FY1999-2000

$0

($30,170)

0

 

Risk Management Adjustment

$0

$306,540

0

 

Acquisitions and Major Repairs

$0

($108,821)

0

 

Nonrecurring Acquisitions and Major Repairs

$0

($74,200)

0

 

Rent in State-owned Buildings

$0

($3,301)

0

 

Maintenance of State-owned Buildings

$0

$3,582

0

 

Legislative Auditor

$0

$378

0

 

UPS Fees

$0

$655,541

0

 

Salary Base Adjustment

$0

($7,772)

0

 

Attrition Adjustment

$0

($43,536)

(2)

 

Personnel Reductions

$0

$1,665

0

 

Civil Service Fees

 

 

 

 

 

$0

$7,681,699

135

 

TOTAL RECOMMENDED

 

 

 

 

 

$0

$884,009

(2)

 

DIFFERENCE (TOTAL RECOMMENDATION AND EXISTING OPERATING BUDGET

The total means of financing for this program is recommended at 113% of the existing operating budget. It represents 97.8% of the total request ($7,850,822) for this program. Adjustments in this program include: Annualization of FY 1998 - 1999 Classified State Employees Merit Increases $88,397; Classified State Employees Merit Increases for FY 1999 - 2000 $95,706; Risk Management Adjustment -$30,170; replacement of Obsolete Dumb Terminals to allow for better utilization of personnel $219,000; Rent in State-owned Buildings -$74,200; and the reduction of 2 unnecessary positions.

 

PROFESSIONAL SERVICES

$103,400

 

Reserve analysis and statistical forecasting, etc.

$25,850

 

Training sessions for Underwriting/Auditing Units, Insurance, and Classifying Rating, etc.

$120,998

 

Loss prevention safety - Training courses to teach professional safety and health courses

$20,000

 

State Police inspections - Contract for accident reconstruction and investigative services involving fatalities

 

 

 

$270,248

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

$14,551

 

Treasurers' Office - Pro-rata share of the State's Central Depository Banking cost

$15,428

 

Pro-rata share of the cost of operations of the Department of Civil Service

$4,136

 

Pro-rata share of the cost of operations of the Uniform Payroll System

$8,316

 

Services from the Department of Public Safety

$38,569

 

Legislative Auditor expense

$125,948

 

Division of Administration - Buildings and Grounds

$18,365

 

Division of Administration - Maintenance

$65,287

 

Division of Administration - Executive Management

 

 

 

$290,600

 

TOTAL OTHER CHARGES

ACQUISITIONS AND MAJOR REPAIRS

$47,540

 

Replacement office equipment

$219,000

 

Replacement of obsolete dumb terminals for 60 claims personnel: 60 PCs, Wiring, 8 Printers, 2 Servers, 1 Bridge and 1 Hub

$40,000

 

Replacement of two (2) vehicles

 

 

 

$306,540

 

TOTAL ACQUISITIONS AND MAJOR REPAIRS


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