LAB: UW System overpaid health premiums, pensions
MADISON, Wis. (AP) — The University of Wisconsin System overpaid for health insurance premiums and pension contributions by nearly $33 million over the last two years, including $8 million for more than 900 employees who had already left their jobs, according to a report released Thursday.
The Legislative Audit Bureau's findings prompted state lawmakers to call for a deeper review of UW System's payroll and benefit protocols.
"This is a $32 million error," said Rep. Samantha Kerkman, R-Powers Lake, co-chairwoman of the Legislture's audit committee. "My initial response was I'm shocked. I'm really disappointed."
The bureau's report stems from a review of the state's financial statements for the year that ended June 30. It said the UW System overpaid on employee health insurance premiums by an estimated $15.4 million between May 2011 and September 2012. About $8 million of that went toward premiums for 924 employees who no longer worked for the system.
The system makes health premium payments to the state Department of Employee Trust Funds, which passes the money on to insurance providers. Auditors determined system employees failed to reconcile the system's payroll and benefits database with ETF's database to reflect the workers who had left their positions. Without those updates, ETF continued to funnel system dollars toward the former workers' premiums.
The report said system officials are reviewing what might have led to the rest of the overpayments.
The system has recouped only about $228,000 of the $15.4 million from its health insurance providers. Provisions in the state's contracts with its health insurance providers will likely limit the system's ability to recover all the money, the report said.
UW System managers told auditors they have updated the ETF database, eliminating the problem. They have requested credit for the overpayments and are reviewing other employee benefit programs to ensure all the data reconciles, the report said.