Value for Money Audit

The WSIB has retained the services of Ernst & Young, Auditors to do a Value for Money Audit on WSIB Schedule 2 services and operations at the WSIB. The time frame for this audit is extremely short with a target date for a draft report at the end of August and a final report to the WSIB Board of Directors by early October. Ernst & Young will be contacting individual Schedule 2 Employers to schedule an interview or to participate in a survey. The Schedule 2 executive will be meeting with the auditors tomorrow to have some discussions and to answer their questions. The Schedule 2 executive is concerned that the audit is too rushed and that the auditors may not have received an adequate briefing on Schedule 2 and the issues. We will aim to provide the auditors with a better understanding of all the issues of concern to Schedule 2 employers. We also plan to provide them with more background documents and a paper to support the interests of Schedule 2 employers.

If you are asked to participate in an interview or to complete a survey please expect the issues to be quite technical and give thought as to who you would like to answer the questions on behalf of your organization. The following will give you some idea of the intended scope to the audit:

“The WSIB is seeking to perform a VFMA on the Schedule 2 program that will evaluate the cost, efficiency, and effectiveness of services delivered to the Schedule 2 sector pertaining to the administration fee charged to Schedule 2 employers

Further objectives of the VFMA are:

  • To obtain recommendations to help ensure alignment within the context of WSIB’s rate setting and funding processes.
  •  A review of processes used:
    • To determine the administration fee and its allocation among Schedule 2 employers;
    • To estimate long-term liabilities;
    • To manage related funding risks; and
    • To measure and report on program performance.
  • A review of the policies and processes used to ensure that Schedule 2 employers, both collectively and individually, pay their “fair share” of WSIB’s administrative costs required under Section 85(1) of the Act. Considerations, in assessing “fair share”, may include applicable WSIB legislated obligations, enterprise transformation and project costs, and the practice of charging some employers little or no administration fee based on their claim costs.
  • An assessment of the methodology used to estimate Schedule 2 employers’ long-term liabilities, both collectively and individually, and the strategy and processes used to mitigate funding risks and secure liabilities. This may entail a comparison of funding risks between public and private sector employers, the management of these risks, and the use of letters of credit to secure long-term liabilities.In providing an audit opinion on the cost, efficiency and effectiveness of the services delivered to the Schedule 2 sector, the VFMA should include:
    • A review of how services delivered to Schedule 2 employers differ from Schedule 1;
    • Performance criteria used to evaluate delivery
    • Relevance and reliability of performance data;
    • The quality and timeliness of performance reporting including respective alignment with enterprise strategy.

The Value for Money Audit should also include a comparison with similar programs in other Workers’ Compensation Boards with a focus on Canada examining the services provided and the approach to setting the related administrative fees.”

If you have questions concerning the audit you may send an email to Laura Russell at the following address lrussell@complclaim.com or Chris James at the following address: chris@sbci.org. We will provide you with more information in the near future.

Thank you

Chris James

Vice-Chair