3

ALG (2/16)

Control Activities Form for Self-insurance

Governmental Unit: / Financial Statement Date:
Completed by: / Date:
Instructions: See separate instructions at LG-CX-5 .
/ Assertions / Addresses
Fraud or
Significant
Risk? / Control Has
Been
Implemented? / Automated or IT-
dependent? / Effectively
Designed? / Test
Control? / Comments /
Recording Claims Payable
C1000—Management reviews the entity’s financial statements on a periodic basis and investigates significant variances from budgets and expected results. / E/O, C, R/O, V, A/CL, CO
C1100—The governmental unit has an insurance committee that holds regularly scheduled meetings and maintains minutes of meetings. / E/O, C, A/CL
C1101—Inside or independent counsel serves on the insurance committee, reviews all or a selection of workers’ compensation claims to determine legal liability, and reviews all or a selection of general liability claims to determine legal liability. / E/O, C, A/CL
C1102—The governmental unit has an administrative procedures committee that holds regularly scheduled meetings and maintains minutes of committee meetings. / E/O, C, A/CL
C1103—Adequate insurance files are maintained for workers’ compensation claims, general liability claims, and physical damage claims. / E/O, C, A/CL
C1104—Insurance files are physically controlled to prevent their loss or use by unauthorized personnel. / E/O, C, A/CL
C1105—Payments to claimants are made only after determination that liability of the governmental unit exists and are subject to final approval by someone independent of the settlement negotiation. / E/O, V, R/O, A/CL
C1106—Reports of claims paid are reconciled with amounts paid per claim files. / E/O, C, R/O, A/CL, CO
C1107—Reports of claims pending are reconciled with open claims per claim files. / E/O, C, R/O, A/CL, CO
C1108—Employees have written limits of authorization for claim settlements and management approval is required for payments that exceed established limits. / E/O, C, A/CL
C1109—An appropriate basis is used to charge departments for self-insurance costs. / E/O, V, A/CL
C1111—The time charged to the self-insurance program by all personnel working on insurance matters is based on actual time worked or on a pro rata basis of total time. / E/O, V, A/CL
Processing Claims Payable
C1000—Management reviews the entity’s financial statements on a periodic basis and investigates significant variances from budgets and expected results. / E/O, C, R/O, V, A/CL, CO
C1105—Payments to claimants are made only after determination that liability of the governmental unit exists and are subject to final approval by someone independent of the settlement negotiation. / E/O, V, R/O, A/CL
C1112—System rejects duplicate entry of a claim. / E/O, V, R/O, A/CL
C1108—Employees have written limits of authorization for claim settlements and management approval is required for payments that exceed established limits. / E/O, C, A/CL
C1114—Payments are distributed to claimants by someone other than the employee who authorized payment. / E/O, A/CL
C1115—Proper identification is required when presenting property to a claimant. / C
C1116—The claimant signs a release of liability statement if payment is made for full and final settlement. / C
C1106—Reports of claims paid are reconciled with amounts paid per claim files. / E/O, C, V, R/O, A/CL, CO
C1107—Reports of claims pending are reconciled with open claims per claim files. / E/O, C, V, R/O, A/CL, CO
C1117—Claims pending aging/subledger is reviewed and reconciled to the general ledger. / E/O, C, V, R/O, A/CL, CO
C1118—After each period-end, management reviews reports of claims pending above the limit dictated by the government’s policy and checks to ensure that they are recorded in the proper period. / E/O, C, R/O, CO
Estimating the Reserve for Claims Incurred But Not Reported
C1000—Management reviews the entity’s financial statements on a periodic basis and investigates significant variances from budgets and expected results. / E/O, C, R/O, V, A/CL, CO
C1119—The insurance committee uses guidelines to review and approve reserves for losses that are documented in the minutes of meetings. The supporting analysis documents compliance with relevant GAAP or a special purpose framework (including relevant regulatory rules) and the government’s accounting policies. / E/O, V, A/CL
C1120—Reports on the settlement of losses are presented at insurance committee meetings. / E/O, A/CL
C1121—Accounting policies and procedures specify the correct treatment for estimating the reserve for claims incurred but not reported and insurance expense. / V
C1124—Reserves for losses are reviewed by a risk manager or an excess reinsurer. / E/O, V, A/CL
C1125—The legal department reviews reserves for losses. / E/O, C, A/CL
C8031—An independent review of significant judgments and estimates included in the financial records is performed at the end of every accounting period by knowledgeable personnel. / E/O, C, V, R/O, A/CL, CO

ALG-CX-5.17

(Continued)