Official whose department was criticized in state audit resigns

Pat Secrest, director of the Division of Workers' Compensation for Governor Matt Blunt, has resigned, according to an article posted less than an hour ago by Missourinet.

Ms. Secrest's department had been criticized in an audit of the Second Injury Fund released in April by State Auditor Susan Montee.

Ms. Secrest had held the post since January 2005, according to the Missourinet article. No details were given concerning her departure.

In the audit, Ms. Montee wrote:

DOLIR's (Department of Labor and Industrial Relations) financial management section provides fund projections used to set the annual surcharge rate and monitor fund solvency. However, section personnel have not always obtained all available information relevant to the future performance of the fund.

Instead, recent expenditure and revenue projections have been primarily based on past performance trends, according to a DOLIR official. For example, DOLIR has not been aware information on future fund expenditures has been available from the Attorney General's Office, according to the official. The Attorney General's Office has specific knowledge of the number of cases expected to be finalized in the coming year and has information regarding trends in the settlements reached in past years and how they will affect future expenditures, according to an Attorney General's Office official. Based on current history, DOLIR's current projection of a 5 percent increase in fund expenditures may be overstated, according to the official. In order to project fund revenues, DOLIR projects the workers' compensation premium base, which the surcharge rate will be charged against. However, DOLIR officials have not obtained the most current information available from DIFP regarding workers' compensation insurance rates. For example, insurance company rate change information is available on an ongoing basis from DIFP. Insurance officials provided us with the 2006 rate reduction which reflected a 2.2 percent reduction for the market as a whole. However, DOLIR officials did not know this information has been available and DIFP has not shared the information with the department, according to a DOLIR official. Instead, DOLIR normally uses a DIFP report that includes 10-month old premium base information.