AG 2008 09 22 - Laserfiche WebLink

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DRAFT September 2, 2008 To: Board of County Commissioners From: Pamela S. Dubois, Deputy County Manager Subject: Self-insured Insurance Policies and procedures Cabarrus County, during different years have incorporated self-insured plans for Worker's Compensation (effective July 1, 1994), Property and Liability (effective July 1, 1997), and Health Insurance (effective July 1, 2004). On all three occasions, the Board of County Commissioners authorized these plans and authorized county staff to take care of the details. The annual funding of these plans were approved by the Board of Commissioner as part of the annual budget process through employee benefit costs. During each fiscal year, these funds were transferred from the annual budgeted funds which created the benefit to an individual fund (Internal Service Fund) which accounted for the actual insurance process so that total cost could be accounted for and reserves built to offset future cost. In researching the Board of County Commissioners minutes, we could not locate any policies or procedures for how these functions should operate and be reported to the Board on a periodic basis. Risk Management and Finance have begun the process of establishing policies and procedures for how each of these insurance activities are to be managed and the procedures to follow to insure that appropriate authorization takes place for the designated activities. While taking the steps to record the policies and procedures on how these activities are handled by Cabarrus County staff, we are finding that some authorizations for activities that have never been approved by the Board of Commissioners as required. As the balance of this calendar year passes, we plan to complete these policies and procedures so that all activities are documented and properly authorized. As we find processes that need Board approval, they will be brought before the board for approval. On your September agenda, the Board will be presented with two Financial Plans that need Board approval to provide spending authority for the Workers Compensation and Health Insurance Fund. These two funds were established as Internal Service Funds in their respective fiscal years as indicated above. Internal Service Funds do not require being included in the budget ordinance as described in G.S. 159-13.1 nor are they required to have adopted and reported budgets in the Financial Statements. However, they are required to have a Board approved Balanced Financial Plan for each intergovernmental service fund each year. A financial plan is balanced when estimated expenditure do not exceed estimated revenues. The agenda item includes copies of the Financial Plans which will bring these two funds back into compliance with G.S. 159-13.1. They will also be incorporated into the budget process in all future years. The Property and Liability Fund does not have to have an approved Financial Plan because the County participated with Rowan County and established the Carolina Governmental alliance in 1997, a separate Item# 12 Attachment number 2 Page 71 of 199