Auditor reveals control deficiency in reporting
In the 2022-2023 Worker's compensation calculation findings, the Auditor discovered a Control Deficiency in reporting.
he information is for the fiscal Year 2022 ending September 30, 2022, prepared by Larson and Company, certified public accountants based in Utah.
According to the Auditors, the Territory's calculations regarding the liability for workers' compensation are complex and do not account for situations where the payee continues to receive payments after 75, which is the projected end of life.
There also appears to be no substantial baseline to substantiate the methodology used to calculate the liability. The effect of not having an appropriate baseline or reasonable estimate could be material to the financial statements.
As with most Governments, the Territory does not employ or retain on staff an actuary to estimate reasonable worker's compensation balances based on rates of return, estimated age of termination, etc.
Credits can be misstated without proper assumptions, even material to the financial statement balances.
Auditors recommend that the Territory acquire the services of a licensed actuary to review their estimates and calculations to determine a proper baseline similar to the requirement of post-employment benefit plans, which determine appropriate life expectancy and will also account for those receiving benefits beyond the life expectancy period.
In response, the American Samoa Government acknowledged the Audit findings, noting the responsibility of acquiring the services of a licensed actuary to review workers' compensation now belongs to ASG Treasury.
The Treasury will start hiring an actuary in the new fiscal year.