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Council reviews workers' compensation audit after $92,000 premium adjustment; staff to move to quarterly reconciliations
Summary
Borough staff explained a $92,000 audit adjustment to 2024 workers' compensation premiums and proposed quarterly reconciliations and improved payroll estimates to avoid future large variances.
Borough staff briefed council on the results of the 2024 workers’ compensation audit, which increased the borough’s premium by $92,000 after reconciliation of estimated payroll with actual payroll for the year.
Finance staff explained that workers’ compensation premiums are calculated from covered payroll and the risk profile of job classes; the borough’s experience modifier is favorable (reported at 91%), but payroll estimates provided late in the year did not match total actual payroll, producing the $92,000 audit adjustment. The council asked staff for process improvements.
Staff said they will begin quarterly premium reconciliations and estimated‑payroll reviews so payments more closely match actual payroll during the year. The borough controller and administration said they will tighten year‑end payroll estimates and provide a standard four‑quarter data set to insurers to reduce variance.
Why it matters: Large retrospective premium adjustments increase short‑term budget pressure and create unpredictability for public works and other departments that rely on stable operating budgets.
Next steps: Borough staff will implement quarterly reconciliations and provide revised payroll‑estimate procedures for next year’s premium calculations.
