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Committee examines state property valuations; agency seeks analyst to audit insured values
Summary
Committee members questioned the Department of Administration about agency-entered property values after learning some demolished or misvalued assets remained on insurance rolls.
Committee members questioned the Department of Administration about the accuracy of agency-reported property valuations and possible over-insurance for state-owned buildings.
Representative Tanner asked analysts to explain fluctuations in the retained risk and related funds. Frances Lippett explained that some fund tables exclude continuously appropriated expenditures, which can make year-to-year balances appear inconsistent.
Senator Veil asked about agency-entered property values after seeing cases in which buildings that had been demolished remained on the insurance rolls. Faith Knowlton, administrator for the department's division of insurance, said one analyst currently oversees more than $11 billion in property and about 8,500 vehicles. "It would be possible for our staff of 1 to be able to manage what the agencies are doing outside, which is the reason we are requesting this position," Knowlton said.
Knowlton said agencies sometimes overstate replacement values and may include land in replacement-value estimates, producing inflated insured values. She described an ongoing four-year appraisal process to identify incorrect entries more quickly; that initial work removed roughly $500 million in over-insured property values and produced annual premium savings the department estimated at about $120,000.
When asked whether refunds were possible for past overpayments, Knowlton said refunds can be requested only for the current year; the office has improved processes to remove demolished buildings going forward.
Committee members requested more detailed fund rollups showing continuous appropriations and direct investments to better reconcile reported cash and investment balances. Lippett and Knowlton agreed to provide additional breakdowns of continuous appropriation funds and reserve account balances.
No formal committee action was taken; the department requested one new full-time property-value analyst position in its FY2026 request to improve the accuracy of insured values and reduce ongoing overpayments.
