__________________________ 

Office of Inspector General—Office of Audit 

OFFICE OF WORKERS’ 

COMPENSATION PROGRAMS 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

FINANCIAL STATEMENTS AND 

INDEPENDENT AUDITORS’ REPORT 

September 30, 2011 and 2010 

This report was prepared by KPMG, LLP, under contract to the U.S. 

Department of Labor, Office of Inspector General, and by acceptance, it 

becomes a report of the Office of Inspector General. 

Assistant Inspector General for Audit 

Date Issued: March 1, 2012 

Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Table of Contents 

Page 

ACRONYMS iii
 

Management’s Discussion and Analysis 

Mission and Organizational Structure 1 

Financial Highlights 2 

Performance Goals and Results 2 

Internal Controls 3 

Known Risks and Uncertainties 4 

Limitations of the Financial Statements 4 

Independent Auditors’ Report 5 

FINANCIAL STATEMENTS 

Balance Sheets 13 

Statements of Net Cost 14 

Statements of Changes in Net Position 15 

Statements of Budgetary Resources 16 

NOTES TO THE FINANCIAL STATEMENTS 

Note 1 – Summary of Significant Accounting Policies 17 

Note 2 – Funds with U.S. Treasury 21 

Note 3 – Investments, Net 22 

Note 4 – Accounts Receivable, Net 23 

Note 5 – Other Liabilities 24 

Note 6 – Transfers to OWCP 24 

Note 7 – Status of Budgetary Resources 25 

Note 8 – Reconciliation of Budgetary Resources Obligated 

 to Net Cost of Operations 26 

Note 9 – Concentration of Risk 26 

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LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Acronyms 

AUP Agreed Upon Procedures 

DLHWC Division of Longshore and Harbor Workers’ Compensation 

DOL Department of Labor 

Fund Longshore and Harbor Workers’ Compensation Act Special Fund 

FY Fiscal Year 

LHWCA Longshore and Harbor Workers’ Compensation Act 

OMB Office of Management and Budget 

OWCP Office of Workers’ Compensation Programs 

Program Longshore and Harbor Workers’ Compensation Act Program 

U.S.C. United States Code 

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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Management’s Discussion and Analysis
 

September 30, 2011 and 2010 

Mission and Organizational Structure 

The Longshore and Harbor Workers’ Compensation Act (LHWCA) provides medical 

benefits, compensation for lost-wages and rehabilitation services for job-related injuries, 

diseases or death of private-sector workers in certain maritime and related employment. 

Generally, benefits are paid directly from private funds by an authorized self-insured 

employer or through an authorized insurance carrier. Cases meeting the requirements of 

the Longshore and Harbor Workers’ Compensation statute are paid from the Longshore 

and Harbor Workers’ Compensation Act Special Fund (the Fund) comprised primarily of 

employer contributions (assessments). In fiscal year (FY) 2011 and 2010, 4,071 and 

4,202 respectively injured workers and dependents received compensation benefits from 

the Fund. 

The reporting entity is the Fund. Organizationally the Fund is administered by the 

Department of Labor (DOL), Office of Workers’ Compensation Programs (OWCP), 

Division of Longshore and Harbor Workers’ Compensation program (DLHWC). The 

DLHWC has direct responsibility for administration of the Fund. The Fund supports the 

program mission by providing compensation, and in certain cases, medical care 

payments to employees disabled from injuries which occurred on the navigable waters of 

the United States, or in adjoining areas used for loading, unloading, repairing, or building 

a vessel. The Fund also extends benefits to dependents if any injury resulted in the 

employee’s death. 

Additionally, Section 10(h) of the LHWCA provides annual wage increase compensation 

(cost of living adjustments). Fifty percent of this annual wage increase for pre-1972 

compensation cases is paid by Federal appropriated funds, and fifty percent is paid by 

the Fund through the annual assessment. Appropriated funding for Section 10(h) is not 

reflected in the accompanying financial statements. Appropriated funding is reflected in 

the Federal Employees Compensation Act Special Benefit Fund. 

Administrative services for operating the Fund are provided by OWCP through direct 

Federal Appropriations. Appropriated funding for administrative services is not reflected 

in the accompanying financial statements. 

U.S. Department of Labor – Office of Inspector General 

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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Management’s Discussion and Analysis 

September 30, 2011 and 2010 

Financial Highlights 

The majority of the revenue of the Fund is generated through annual recurring 

assessments paid by self-insured employers and insurance carriers and totaled 

$122,909,591 in FY 2011 and $123,791,447 in FY 2010. During fiscal years 2011 and 

2010, recoveries were made for the Fund due to activities involving the application of 

Agreed Upon Procedures (AUP) on Forms LS-513, Report of Payments (used in the 

calculation of the annual assessment), and negotiation/collection of past due 

assessments. The AUP program recovered $3,450,976 in FY 2011 and $801,517 in FY 

2010 for the Fund. These recoveries have reduced, and will continue to reduce, carrier 

assessments and are reflected separately on the Statement of Changes in Net Position. 

Investment income for the Fund was $24,791 for FY 2011 compared to $40,412 for FY 

2010. The average interest rate earned during FY 2011 was 0.07% compared to 0.10% 

for FY 2010. The Fund’s costs remained relatively stable compared to FY 2010; 

$124,345,106 for FY 2011 compared to $128,248,009 for FY 2010. 

The sources of payments into the Fund include: fines and penalties levied under the 

LHWCA (section 44c); payments by employers of $5,000 for each death case where 

there is no survivor entitled to the benefits; interest payments on Fund investments; audit 

recoveries; and, by far the largest source, payment of annual assessments by 

self-insured employers and insurance carriers. 

Proceeds of the Special Fund are used for payments under: section 8(f) for second 

injury claims; section 10(h) for initial and subsequent annual adjustments in 

compensation for permanent total disability or related death from injuries which occurred 

prior to the effective date of the 1972 LHWCA amendments; sections 39(c) and 8(g) for 

the procurement of medical and vocational rehabilitation services for permanently 

disabled employees and to provide a maintenance allowance to workers undergoing 

rehabilitation; section 18(b) for compensation to injured workers in cases of employer 

default; and section 7(e) for the cost of certain medical examinations. 

Performance Goals and Results 

The DLHWC’s administration of the Fund supports DOL’s Strategic Goal 4 – Secure 

health benefits and, for those not working, provide income security. This goal broadly 

promotes the economic security of workers and families. In particular, the DLHWC’s 

administration of the Fund supports Performance Goal 4.2 – Reduce the Consequences 

of Work-Related Injuries. DOL plays a large role in ensuring that worker benefits are 

protected and that employers administer benefit programs in an appropriate way. The 

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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Management’s Discussion and Analysis 

September 30, 2011 and 2010 

DLHWC assists in meeting this outcome goal by establishing the long term performance 

goal of ensuring sufficient funds are assessed to fund the annual payments, and by 

prompt payment to the beneficiaries. In FY 2011, assessments were sufficient to cover 

the costs, and performance goals targeting the timeliness of initial claims processing and 

benefit delivery outcomes were achieved. 

Internal Controls 

The Longshore and Harbor Workers’ Compensation Division’s Branch of Financial 

Management, Insurance and Assessment is comprised of four employees and one 

supervisor. It guards against unethical behavior by segregating duties and assigning 

roles to each function. Much of the oversight, evaluation, monitoring, control, and 

supervisory activity is face-to-face. Each of the district offices operate like the Branch of 

Financial Management and Insurance. 

Management communicates all procedural, policy, and operating goals to staff with 

regular staff meetings, a written procedure manual, e-mails, and frequent individual 

communications regarding changes, problems and issues. 

Statutes provide the formal standards where these are applicable, such as privacy 

statutes, cash handling procedures, and conflict of interest regulations. All codes, 

statutes, and regulations governing the conduct of Federal employees apply to all 

Longshore Division employees. 

For cases paid by the Special Fund, a District Director or Administrative Law Judge 

issues a formal Compensation Order to identify the payee and set the amount. Five 

employees review each new case before making the payment to ensure accuracy. 

With the exception of certain internal control deficiencies noted in the Independent 

Auditors’ Report, monthly cash basis statements, monthly case management reports, 

quarterly review processes, biweekly payment summaries, the Statement of Transactions 

(SF-224), and the Statement of Differences (FMS-6652) all provide current, reliable, and 

accurate information. 

U.S. Department of Labor – Office of Inspector General 

3 Report Number: 22-12-004-04-432 
Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Management’s Discussion and Analysis 

September 30, 2011 and 2010 

Known Risks and Uncertainties 

The Fund is the single largest payer of indemnity payments under the LWHCA. It pays 

more than double the next largest payer of benefits. Although there are approximately 

530 authorized insurance carriers and self-insured employers, benefit payments are 

concentrated among a relatively few. For example, the top 10 carriers and self-insurers 

alone pay 45% of the total industry payments excluding Special Fund payments. If a 

major carrier or self-insurer fails, the remainder would face substantially increased 

assessments. 

The Fund is reviewed one year at a time for current expenses. There are no reserve 

funds for future Fund obligations. A series of high value single payment claims, for 

example a large number of hearing loss claims resolved in the private sector, could 

exceed the predictions used to quantify the assessment. A single, very large claim from 

an uninsured, bankrupt employer could have the same effect. Temporary collection 

issues could result, necessitating special, unscheduled assessments or other actions to 

ensure the Fund has sufficient liquid resources to fund claims liabilities as they come 

due. 

There are currently no known examples of these risks and uncertainties. 

Limitations of the Financial Statements 

The following are limitations of the financial statements: 

	 The financial statements have been prepared to report the financial position and 

results of operations of the Fund, pursuant to the requirements of the Longshore and 

Harbor Workers’ Compensation Act (33 U.S.C. 944(j)). 

	 While the statements have been prepared from the books and records of the Fund in 

accordance with the formats prescribed by the Office of Management and Budget, 

(OMB), the statements are different from the financial reports used to monitor and 

control budgetary resources which are prepared from the same books and records. 

	 The statements should be read with the realization that they are for a component of 

the U.S. Government, a sovereign entity, that liabilities cannot be liquidated without 

the enactment of an appropriation, and that the payment of all liabilities other than for 

contracts can be abrogated by the sovereign entity. 

U.S. Department of Labor – Office of Inspector General 

4 Report Number: 22-12-004-04-432 
 

 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

KPMG LLP 

Suite 12000 

1801 K Street, NW 

Washington, DC 20006 

Independent Auditors’ Report 

Mr. Gary A. Steinberg, Acting Director 

Office of Workers’ Compensation Programs, U.S. Department of Labor 

We have audited the accompanying balance sheets of the U.S. Department of Labor’s 

(DOL) Longshore and Harbor Workers’ Compensation Act Special Fund (the Fund) as 

of September 30, 2011 and 2010, and the related statements of net cost, changes in net 

position, and budgetary resources (hereinafter referred to as “financial statements”) for 

the years then ended. The objective of our audits was to express an opinion on the fair 

presentation of these financial statements. In connection with our fiscal year 2011 audit, 

we also considered the Fund’s internal control over financial reporting and tested the 

Fund’s compliance with certain provisions of applicable laws and regulations that could 

have a direct and material effect on these financial statements. 

Summary 

As stated in our opinion on the financial statements, we concluded that the Fund’s 

financial statements as of and for the years ended September 30, 2011 and 2010, are 

presented fairly, in all material respects, in conformity with U.S. generally accepted 

accounting principles. 

Our consideration of internal control over financial reporting resulted in identifying 

certain deficiencies that we consider to be a material weakness, as defined in the 

Internal Control Over Financial Reporting section of this report, as follows: 

 Controls Over the Financial Reporting Process Need Improvement 

The results of our tests of compliance with certain provisions of laws and regulations 

disclosed no instances of noncompliance or other matters that are required to be 

reported under Government Auditing Standards, issued by the Comptroller General of 

the United States, and Office of Management and Budget (OMB) Bulletin No. 07-04, 

Audit Requirements for Federal Financial Statements, as amended. 

The following sections discuss our opinion on the Fund’s financial statements; our 

consideration of the Fund’s internal control over financial reporting; our tests of the 

U.S. Department of Labor – Office of Inspector General 

5 Report Number: 22-12-004-04-432 

KPMG LLP is a Delaware limited liability partnership, 

the U.S. member firm of KPMG International Cooperative 

(“KPMG International”), a Swiss entity. 
Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

Fund’s compliance with certain provisions of applicable laws and regulations; and 

management’s and our responsibilities. 

Opinion on the Financial Statements 

We have audited the accompanying balance sheets of the U.S. Department of Labor’s 

Longshore and Harbor Workers’ Compensation Act Special Fund as of September 30, 

2011 and 2010, and the related statements of net cost, changes in net position, and 

budgetary resources for the years then ended. 

In our opinion, the financial statements referred to above present fairly, in all material 

respects, the financial position of the U.S. Department of Labor’s Longshore and Harbor 

Workers’ Compensation Act Special Fund as of September 30, 2011 and 2010, and its 

net costs, changes in net position, and budgetary resources for the years then ended, in 

conformity with U.S. generally accepted accounting principles. 

The information in the Management’s Discussion and Analysis is not a required part of 

the financial statements, but is supplementary information required by U.S. generally 

accepted accounting principles. We have applied certain limited procedures, which 

consisted principally of inquiries of management regarding the methods of 

measurement and presentation of this information. However, we did not audit this 

information and, accordingly, we express no opinion on it. 

Internal Control Over Financial Reporting 

Our consideration of internal control over financial reporting was for the limited purpose 

described in the Responsibilities section of this report and was not designed to identify 

all deficiencies in internal control over financial reporting that might be significant 

deficiencies or material weaknesses and therefore, there can be no assurance that all 

deficiencies, significant deficiencies, or material weaknesses have been identified. 

However, in our fiscal year 2011 audit, we identified certain deficiencies in internal 

control over financial reporting that we consider to be a material weakness. 

A deficiency in internal control exists when the design or operation of a control does not 

allow management or employees, in the normal course of performing their assigned 

functions, to prevent, or detect and correct misstatements on a timely basis. A material 

weakness is a deficiency, or a combination of deficiencies, in internal control such that 

there is a reasonable possibility that a material misstatement of the entity’s financial 

statements will not be prevented, or detected and corrected on a timely basis. We 

consider the deficiencies described in Exhibit I to be a material weakness. 

Exhibit I presents the status of the prior year material weakness. 

U.S. Department of Labor – Office of Inspector General 

6 Report Number: 22-12-004-04-432 
Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

Compliance and Other Matters 

The results of our tests of compliance described in the Responsibilities section of this 

report, disclosed no instances of noncompliance or other matters that are required to be 

reported herein under Government Auditing Standards or OMB Bulletin No. 07-04. 

* * * * * * * 

Responsibilities 

Management’s Responsibilities. Management is responsible for the financial 

statements; establishing and maintaining effective internal control; and complying with 

laws and regulations applicable to the Fund. 

Auditors’ Responsibilities. Our responsibility is to express an opinion on the fiscal 

year 2011 and 2010 financial statements of the Fund based on our audits. We 

conducted our audits in accordance with auditing standards generally accepted in the 

United States of America; the standards applicable to financial audits contained in 

Government Auditing Standards, issued by the Comptroller General of the United 

States; and OMB Bulletin No. 07-04. Those standards and OMB Bulletin No. 07-04 

require that we plan and perform the audits to obtain reasonable assurance about 

whether the financial statements are free of material misstatement. An audit includes 

consideration of internal control over financial reporting as a basis for designing audit 

procedures that are appropriate in the circumstances, but not for the purpose of 

expressing an opinion on the effectiveness of the Fund’s internal control over financial 

reporting. Accordingly, we express no such opinion. 

An audit also includes: 

	 Examining, on a test basis, evidence supporting the amounts and disclosures in 

the financial statements; 

	 Assessing the accounting principles used and significant estimates made by 

management; and 

	 Evaluating the overall financial statement presentation. 

We believe that our audits provide a reasonable basis for our opinion. 

In planning and performing our fiscal year 2011 audit, we considered the Fund’s internal 

control over financial reporting by obtaining an understanding of the Fund’s internal 

control, determining whether internal controls had been placed in operation, assessing 

control risk, and performing tests of controls as a basis for designing our auditing 

procedures for the purpose of expressing our opinion on the financial statements, but 

not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal 

control over financial reporting. Accordingly, we do not express an opinion on the 

effectiveness of the Fund’s internal control over financial reporting. We did not test all 

U.S. Department of Labor – Office of Inspector General 

7 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

controls relevant to operating objectives as broadly defined by the Federal Managers’ 

Financial Integrity Act of 1982. 

As part of obtaining reasonable assurance about whether the Fund’s fiscal year 2011 

financial statements are free of material misstatement, we performed tests of the Fund’s 

compliance with certain provisions of laws and regulations, noncompliance with which 

could have a direct and material effect on the determination of the financial statement 

amounts, and certain provisions of other laws and regulations specified in OMB Bulletin 

No. 07-04. We limited our tests of compliance to the provisions described in the 

preceding sentence, and we did not test compliance with all laws and regulations 

applicable to the Fund. However, providing an opinion on compliance with laws and 

regulations was not an objective of our audit and, accordingly, we do not express such 

an opinion. 

The Fund’s response to the finding identified in our audit is presented in Exhibit I. We 

did not audit the Fund’s response and, accordingly, we express no opinion on it. 

This report is intended solely for the information and use of DOL’s management, DOL’s 

Office of Inspector General, OMB, the U.S. Government Accountability Office, and the 

U.S. Congress and is not intended to be and should not be used by anyone other than 

these specified parties. 

February 17, 2012 

U.S. Department of Labor – Office of Inspector General 

8 Report Number: 22-12-004-04-432 
Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

Exhibit I 

Controls Over the Financial Reporting Process Need Improvement 

During our fiscal year (FY) 2010 audit, we noted that the internal controls over the 

preparation and review of the Fund financial statements performed by the Office of 

Workers’ Compensation Programs (OWCP) Division of Longshore and Harbor Workers’ 

Compensation program (DLHWC) and Office of the Chief Financial Officer (OCFO) 

were not operating effectively. We recommended that management improve its internal 

controls over financial reporting to ensure that (1) reconciliations between the Fund’s 

general ledger account balances and balances reflected in subsidiary ledgers are being 

prepared and reviewed consistently throughout the year; (2) supervisory review 

controls, including those over journal entries are being effectively performed; (3) SF224s are being thoroughly reviewed prior to submission to Treasury; and (4) differences 

identified by Treasury are resolved on a timely basis. 

Although OWCP has made some improvement in its financial reporting processes, we 

continued to identify certain control deficiencies in FY 2011 related to controls over 

financial reporting. Specifically, during our review of the draft FY 2011 Fund financial 

statements and notes, we noted the following errors: 

1. When comparing beginning balances reported in the draft Statement of Changes in 

Net Position (SCNP) and Statement of Budgetary Resources (SBR) to the related 

ending balances reported in the FY 2010 audited financial statements, we identified 

the following errors which were related to topside adjustments presented in the 

audited FY 2010 financial statements: 

 Cumulative Results of Operations (CRO) – Beginning Balance, October 1, 

2010 was overstated by $4 million; and 

 Unobligated Balance, Brought Forward, October 1, 2010 was understated by 

$972 thousand. 

Additionally, the affect of the FY 2010 topside adjustments were incorrectly reported 

in the line item “FY 2010 Audit Adjustments” on the Statement of Net Cost (SNC) 

and SCNP. 

2. Balances reported for Appropriations Received and Obligations Incurred on the SBR 

were overstated by $3.5 million and $2 million, respectively. 

3. The balance for Assessments on the SCNP was understated by $4 million. 

4. Net Cost of Operations reflected in the SNC did not agree to Net Cost of Operations 

reflected in the SCNP. 

5. Numerous FY 2010 balances shown for comparative purposes in the draft FY 2011 

financial statements and notes did not agree to the amounts reflected in the FY 2010 

audited financial statements and notes. 

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9 Report Number: 22-12-004-04-432 
 

 

 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

6. The description of the reporting entity and key performance goals included in the 

Management’s Discussion and Analysis section of the draft FY 2011 report were not 

accurate. 

7. Reconciling items identified in Note 7(b), Explanation of Differences between the 

Statement of Budgetary Resources and the Budget of the United States 

Government, were not explained. 

These items were corrected by management in the final financial statements. 

The issues above were primarily caused by certain adjustments (i.e., topside 

adjustments) made by OWCP to the FY 2010 audited financial statements that were 

initially recorded outside of the general ledger. OWCP management was aware that the 

October 1, 2010 beginning balances and certain ending balances reported in the 

general ledger were incorrect. However, management failed to implement an alternative 

process to ensure that the FY 2011 financial statements were fairly stated, in all 

material respects, as of and for the year ended September 30, 2011. 

The remaining errors occurred because OWCP management does not have policies 

and procedures that require a comprehensive and detailed review of all financial 

information in the draft financial statements, including budgetary to proprietary account 

relationships. The lack of sufficient review increases the risk that material errors or fraud 

would not be detected and corrected timely. 

We also noted that supervisory review controls over journal entries were not effectively 

performed in FY 2011. This was caused by insufficient review by DOL supervisors of 

journal entries to ensure they were properly prepared and supported before posting to 

the general ledger. Furthermore, the Office of the Chief Financial Officer had not 

enhanced its policies and procedures to address the minimum documentation 

requirements needed to adequately support journal entries during the first two quarters 

of FY 2011; the policies and procedures were subsequently updated in June 2011. 

Without proper review of transactions, management is unable to determine the 

appropriateness of transactions posted to the general ledger. 

We used the following criteria during our FY 2011 testing over OWCP’s financial 

processes: 

The Government Accountability Office (GAO), Standards for Internal Control in the 

Federal Government states, “Internal control should generally be designed to assure 

that ongoing monitoring occurs in the course of normal operations. It is performed 

continually and is ingrained in the agency’s operations. It includes regular management 

and supervisory activities, comparisons, reconciliations, and other actions people take 

in performing their duties.” 

The Standards also state, “Control activities occur at all levels and functions of the 

entity. They include a wide range of diverse activities such as approvals, authorizations, 

verifications, reconciliations, performance reviews, maintenance of security, and the 

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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

creation and maintenance of related records, which provide evidence of execution of 

these activities as well as appropriate documentation. Control activities may be applied 

in a computerized information system environment or through manual processes.” 

Further, the Standards state that, “Internal control should provide reasonable assurance 

that the objectives of the agency are being achieved relative to reliability of financial 

reporting, including reports on budget execution, financial statements, and other reports 

for internal and external use and compliance with applicable laws and regulations.” 

Office of Management and Budget (OMB) A-136, Financial Reporting Requirements 

(Circular No. A-136), requires agencies to, “Identify and explain material differences 

between amounts reported in the SBR and the actual amounts reported in the Budget of 

the United States Government as required by SFFAS No.7.” Circular No. A-136 further 

states that, “At a minimum, agencies should display the material differences for 

comparable line items related to budgetary resources, obligations, distributed offsetting 

receipts and outlays. The schedule should be accompanied by a narrative explaining to 

the reader why the differences exist.” 

To address the issues noted above, we recommend that OWCP management: 

1. Design and implement policies and procedures that require a comprehensive and 

detailed review of all financial information in the draft financial statements. The 

policies and procedures should include: 

a. Specific procedures for agreeing comparative prior year financial data to 

the prior year audited statements; 

b. Comparing financial data reported on the different statements to ensure 

accuracy and consistency; 

c. Reconciling the financial data between the general ledger and subsidiary 

ledgers to ensure existence, completeness, and accuracy of financial data 

reported; 

d. Performing a budgetary to proprietary account relationship analysis and 

resolving identified variances; and 

e. Analyzing significant variances between current period and prior period 

financial information. 

2. Develop monitoring controls to ensure that sufficient supervisory review controls 

over journal entries and the related documentation are being performed before 

the journal entries are posted to the general ledger. 

Management’s Response: 

Management concurs with the recommendations. By March 31, 2012, a checklist will be 

developed and implemented for agreeing comparative prior year financial data to the 

prior year audited statements; comparing financial data reported on the different 

statements to ensure accuracy and consistency; reconciling the financial data between 

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Financial Statements and Independent Auditors’ Report 

the general ledger and subsidiary ledgers to ensure existence, completeness, and 

accuracy of financial data reported; performing a budgetary to proprietary account 

relationship analysis and resolving identified variances as appropriate; and analyzing 

significant variances between current period and prior period financial information. 

OWCP will implement another level of review to ensure that sufficient supervisory 

review controls are being performed. Effective March 31, 2012, all journal entries will 

be submitted to the Financial Manager for review and approval prior to their posting into 

the general ledger. 

Auditors’ Response: 

FY 2012 audit procedures will determine whether these recommendations have been 

adequately addressed and can be considered closed. 

U.S. Department of Labor – Office of Inspector General 

12 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Balance Sheets 

September 30, 2011 and 2010 

Assets 

Intra-governmental assets:

Funds with U.S. Treasury (Note 2) 

Investments, net (Note 3) 

Total intra-governmental assets 

Accounts receivable, net (Note 4) 

Total assets 

Liabilities and Net Position 

Liabilities: 

Accrued benefits payable (Note 1f ) 

Expenditure transfers payable (Note 6) 

Deferred revenue (Note 1h) 

Other liabilities (Note 5) 

Total liabilities 

Net position:

Cumulative results of operations 

Total liabilities and net position 

2011 

$ 5,164 

58,170,000 

58,175,164 

1,762,823 

$ 59,937,987 

$ 655,439 

— 

30,343,942 

7,425,371 

38,424,752 

21,513,235 

$ 59,937,987 

$ 

$ 

$ 

$ 

2010 

1,333,422 

60,579,000 

61,912,422 

3,025,359 

64,937,781 

354,421 

2,124,000 

30,946,645 

10,393,535 

43,818,601 

21,119,180 

64,937,781 

See accompanying notes to financial statements. 

U.S. Department of Labor – Office of Inspector General 

13 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Statements of Net Cost 

Years ended September 30, 2011 and 2010 

Special fund net cost of operations:

Second injury compensation, Section 8(f) 

Wage increase compensation, Section 10(h) 

Compensation payment for self-insurer in default, 

Section 18(b) 

Rehabilitation services, Section 39(c) 

Medical Services 7(e) 

Bankrupt self-insured employers, Section 32(a) 

Net cost of operations 

2011 

$ 112,862,602 

1,388,781 

6,303,804 

2,822,065 

— 

967,854 

$ 124,345,106 

$ 

$ 

2010 

116,078,379 

1,484,105 

6,739,775 

3,183,165 

500 

762,085 

128,248,009 

See accompanying notes to financial statements. 

U.S. Department of Labor – Office of Inspector General 

14 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Statements of Changes in Net Position 

Years ended September 30, 2011 and 2010 

Cumulative results of operations, beginning 

Budgetary financing sources:

Transfers in/out without reimbursement (Note 6) 

Non-exchange revenues (Note 1i): 

Interest 

Fines and Penalties 

Audit Recoveries 

Assessments 

Total non-exchange revenues 

Total financing sources 

Net cost of operations 

Net position, end of period 

2011 

$ 21,119,180 

(2,118,307) 

24,791 

472,110 

3,450,976 

122,909,591 

126,857,468 

124,739,161 

(124,345,106) 

$ 21,513,235 

$ 

$ 

2010 

26,404,264 

(2,124,000) 

40,412 

453,549 

801,517 

123,791,447 

125,086,925 

122,962,925 

(128,248,009) 

21,119,180 

See accompanying notes to financial statements. 

U.S. Department of Labor – Office of Inspector General 

15 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’
 

COMPENSATION ACT SPECIAL FUND 

Statements of Budgetary Resources 

Years ended September 30, 2011 and 2010 

2011 2010 

Budgetary resources:

Unobligated balance, brought forward $ 59,983,697 $ 61,053,982 

Budget authority 

Appropriations received (assessments) 124,674,417 127,343,949 

Spending authority from offsetting collections — — 

Temporary not available pursuant to Public Law — — 

Total budgetary resources $ 184,658,114 $ 188,397,931 

Status of Budgetary Resources:

Obligations Incurred (Note 7) 

Direct $ 126,589,732 $ 128,414,234 

Unobligated balances - available:

Other available - exempt from apportionment 58,068,382 59,983,697 

Total status of budgetary resources $ 184,658,114 $ 188,397,931 

Change in obligated balance:

Obligated balance, net 

Unpaid obligations, brought forward, October 1 $ 2,478,421 $ — 

Obligations Incurred, net 126,589,732 128,414,234 

Less: Gross Outlays (128,412,714) (125,935,813) 

Obligated balance, net, end of period

Unpaid obligations $ 655,439 $ 2,478,421 

Outlays:

 Gross Outlays $ 128,412,714 $ 125,935,813 

Net outlays $ 128,412,714 $ 125,935,813 

See accompanying notes to financial statements. 

U.S. Department of Labor – Office of Inspector General 

16 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(1) Summary Of Significant Accounting Policies 

The principal accounting policies which have been followed in preparing the 

accompanying financial statements for the Fund are set forth below. 

(a) Reporting Entity 

These financial statements present the financial position, net cost of 

operations, changes in net position and budgetary resources of the Longshore 

and Harbor Workers’ Compensation Act Special Fund (the Fund). The Fund is 

administered by the Department of Labor (DOL), Office of Workers’ 

Compensation Programs (OWCP), Division of Longshore and Harbor Workers’ 

Compensation program (DLHWC). The DLHWC has direct responsibility for 

administration of the Fund. The Fund offers compensation, and in certain 

cases, medical care payments to employees disabled from injuries which 

occurred on the navigable waters of the United States, or in adjoining areas 

used for loading, unloading, repairing, or building a vessel. The Fund also 

extends benefits to dependents if any injury resulted in the employee’s death. 

Additionally, the Longshore and Harbor Workers’ Compensation Act (LHWCA) 

[Section 10(h)] provides annual wage increase compensation (cost of living 

adjustments). Fifty percent of this annual wage increase for pre-1972 

compensation cases is paid by Federal appropriated funds and fifty percent is 

paid by the Fund through the annual assessment. Appropriated funding for 

10(h) is not reflected in the accompanying financial statements. Appropriated 

funding is reflected in the Federal Employees Compensation Act Special 

Benefit Fund. 

(b) Basis of Accounting and Presentation 

These financial statements present the financial position, net cost of 

operations, changes in net position and budgetary resources of the Longshore 

and Harbor Workers’ Compensation Act Special Fund (the Fund), in 

accordance with U.S. generally accepted accounting principles and the form 

and content requirements of Office of Management and Budget (OMB) Circular 

A-136, Financial Reporting Requirements. These financial statements have 

been prepared from the books and records of the Fund. These financial 

statements are not intended to present, and do not present, the full cost of the 

Longshore and Harbor Workers’ Compensation Act Program (the Program). In 

addition to the Fund costs presented in these statements, the full cost of the 

U.S. Department of Labor – Office of Inspector General 

17 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

Program would include certain direct costs of OWCP in the form of salaries 

and expenses for administration of the Program and allocated costs of OWCP 

and other DOL agencies incurred in support of the Program. The full cost of 

the Program is included in the DOL consolidated financial statements and 

related notes. The Fund is considered a fiduciary activity of DOL and is 

properly disclosed and reported in the consolidated financial statements of 

DOL as a fiduciary fund. 

U.S. generally accepted accounting principles encompass both accrual and 

budgetary transactions. Under accrual accounting, revenues are recognized 

when earned, and expenses are recognized when a liability is incurred. 

Budgetary accounting facilitates compliance with legal constraints on, and 

controls over, the use of Federal funds. These financial statements are 

different from the financial reports, also prepared for the Fund pursuant to 

OMB directives, used to monitor the Fund’s use of budgetary resources. 

(c) Funds with U.S. Treasury 

The Fund does not maintain cash in commercial bank accounts. Cash receipts 

and disbursements are processed by the U.S. Treasury. The Fund Balance 

with U.S. Treasury is a trust fund that is available to pay current liabilities and 

finance authorized purchase commitments. 

(d) Investments, Net 

Investments in U.S. Government securities are reported at cost, net of 

unamortized premiums or discounts, which approximate market value. 

Premiums or discounts are amortized on a straight-line basis, which 

approximates the effective interest method. The Fund’s intent is to hold 

investments to maturity, unless they are needed to finance claims or otherwise 

sustain the operations of the Fund. No provision is made for unrealized gains 

or losses on these securities because they are held to maturity. 

U.S. Department of Labor – Office of Inspector General 

18 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(e) Accounts Receivable, Net 

The amounts due as receivables are stated net of an allowance for 

uncollectible accounts. The allowance is estimated based on past experience 

in the collection of the receivables and an analysis of the outstanding 

balances. Accounts receivable are comprised of assessments receivable and 

Fund benefit overpayments made to individuals primarily from amended 

compensation orders and corrections of payment computations. 

(f) Accrued Benefits Payable 

The Fund provides compensation and medical benefits for work related injuries 

to workers in certain maritime employment. The Fund recognizes a liability for 

disability benefits payable to the extent of unpaid benefits applicable to the 

current period. It does not include a liability for incurred but not reported 

claims. Ultimate responsibility for payment of such claims rests with the 

employer organizations. Accrued disability benefits payable as of September 

30, 2011 amounted to $655,439, and as of September 30, 2010 they amount 

to $354,421. 

(g) Other Liabilities 

Other liabilities are comprised primarily of amounts received by the Fund from 

defaulted employers which are being held as security by authority of Section 

32 of the LHWCA. These funds and investments are available for 

compensation and medical benefits to covered employees of the defaulted 

companies. Management estimates that these funds and investments held will 

be sufficient to cover the future benefits associated with the covered 

employees. Also included in other liabilities are assessment overpayments by 

insurance carriers or self-insured employers which are to be refunded at the 

insurance carrier or self-insured employers’ request or applied to reduce future 

assessments. 

(h) Deferred Revenue 

Deferred revenue represents the unearned assessment revenue as of 

September 30, the Fund’s accounting year end. The annual assessments 

cover a calendar year and, accordingly, the portion extending beyond 

September 30 has been deferred. Deferred revenue reported on the balance 

sheets is considered “Other Liabilities” under OMB Circular A-136. 

U.S. Department of Labor – Office of Inspector General 

19 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(i) Financing Sources Other Than Exchange Revenue 

Non-exchange revenues arise from the Federal government’s power to 

demand payments from and receive donations from the public. Non-exchange 

revenues are recognized by the Fund for assessments and penalties levied 

against the public and interest income from investments. 

The Fund’s primary source of revenue is annual assessments levied on 

insurance carriers and self-insured employers. Assessments are recognized as 

non-exchange revenue when due. Audit recoveries result from the application 

of Agreed Upon Procedures on reported carrier data. Recoveries are 

recognized as revenues when final agreement is reached with the carriers. The 

Fund receives interest on Fund investments and on Federal funds in the 

possession of non-Federal entities. The Fund also receives revenue from 

penalties assessed in accordance with various sections of the LHWCA. 

(j) Reclassifications 

The fiscal year (FY) 2010 statements were reclassified to conform to the FY 

2011 financial statement presentation requirements. The reclassifications had 

no effect on total assets, liabilities, net position, and changes in net position or 

budgetary resources as previously reported. 

U.S. Department of Labor – Office of Inspector General 

20 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

 

 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(2) Funds with U.S. Treasury 

Funds with U.S. Treasury at September 30, 2011 and 2010 consisted of cash 

deposits of $5,164 and $1,333,422, respectively. These cash deposits at 

September 30, 2011 and 2010 included $396 and $361, respectively, which are 

being held as security by authority of Section 32 of the LHWCA. These funds relate 

to the default of self-insured employers, and are available for payment of 

compensation and medical benefits to covered employees of the defaulted 

companies. 

Funds with U.S. Treasury at September 30, 2011 consisted of the following: 

Entity Assets 

Unobligated Unobligated Obligated 

Balance Balance Balance Not Total Non-entity 

(In Dollars) Available Unavailable Yet Disbursed Entity Assets Assets Total 

Trust Fund $ — — 5,164 5,164 — $ 5,164 

Funds with U.S. Treasury at September 30, 2010 consisted of the following: 

Entity Assets 

Unobligated Unobligated Obligated 

Balance Balance Balance Not Total Non-entity 

(In Dollars) Available Unavailable Yet Disbursed Entity Assets Assets Total 

Trust Fund $ — — 1,333,422 1,333,422 — $ 1,333,422 

U.S. Department of Labor – Office of Inspector General 

21 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(3) Investments, Net 

Investments at September 30, 2011 and 2010 consisted of the following: 

September 30, 2011 

Face Premium Net Market 

(In Dollars) Value (Discount) Value Value 

Intragovernmental securities: 

Non-Marketable: 

Par value $ 58,170,000 — 58,170,000 58,170,000 

September 30, 2010 

Face Premium Net Market 

(In Dollars) Value (Discount) Value Value 

Intragovernmental securities: 

Non-Marketable: 

Par value $ 60,579,000 — 60,579,000 60,579,000 

Investments of $6,614,223 and $7,403,123 at September 30, 2011 and 2010, 

respectively, are restricted assets that are being held as security by authority of 

Section 32 of the LHWCA. These investments are available for payment of 

compensation and medical benefits to covered employees of the defaulted 

companies. Investments at September 30, 2011 and 2010 consist of overnight 

securities. Investments at September 30, 2011 bear an interest rate of 0.00% 

compared to an interest rate of 0.08% for September 30, 2010. Interest rates on 

securities bought and sold during FY 2011 ranged from 0.00% to 0.18% compared 

to 0.01% to 0.17% for FY 2010. 

U.S. Department of Labor – Office of Inspector General 

22 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(4) Accounts Receivable, Net 

Accounts receivable at September 30, 2011 and 2010 consisted of the following: 

(In Dollars) 2011 2010 

Benefit overpayments $ 1,695,591 $ 1,774,485 

Assessments receivable 499,129 1,800,088 

Less: allowance for doubtful accounts (431,897) (549,214) 

Total accounts receivable from the public, net $ 1,762,823 $ 3,025,359 

Assessments receivable represent the unpaid annual assessments from the current 

and prior year. Accounts receivable from benefit overpayments to claimants arise 

primarily from amended compensation orders and corrections of payment 

computations. These receivables are being primarily recovered by partial and total 

withholding of benefit payments. 

Changes in the allowance for doubtful accounts during FY 2011 and FY 2010 

consisted of the following: 

2011 

Allowance Write Allowance 

(In Dollars) October 1, 2010 Offs Bad Debt September 30, 2011 

Entity assets: 

Benefit overpayments $ (504,212) — 74,810 $ (429,402) 

Assessment receivable (45,002) — 42,507 (2,495) 

$ (549,214) — 117,317 $ (431,897) 

2010 

Allowance Write Allowance 

(In Dollars) October 1, 2009 Offs Bad Debt September 30, 2010 

Entity assets: 

Benefit overpayments $ (927,225) — 423,013 $ (504,212) 

Assessment receivable (128,238) — 83,236 (45,002) 

$ (1,055,463) — 506,249 $ (549,214) 

U.S. Department of Labor – Office of Inspector General 

23 Report Number: 22-12-004-04-432 
____________________________________________________________________________________ 

Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(5) Other Liabilities 

Other liabilities at September 30, 2011 and 2010 consisted of the following current 

liabilities: 

(In Dollars) 2011 2010 

Other liabilities: 

Assessment overpayments by carriers $ 810,752 $ 2,990,051 

Defaulted employer liability: 

Held in investments 6,614,223 7,403,123 

Held in cash 396 361 

6,614,619 7,403,484 

Total other liabilities $ 7,425,371 $ 10,393,535 

Assessment overpayments by carriers are to be refunded upon request or applied 

to reduce future assessments. 

Defaulted employer liability relates to cash and investments held by the Fund which 

are being held as security by authority of Section 32 of the LHWCA. These funds 

are available for compensation and medical benefits to covered employees of the 

defaulted companies. 

(6) Transfers to OWCP 

The Fund reimburses OWCP (a related entity within the Department of Labor) for 

rehabilitation services provided to eligible claimants and certain direct expenses 

associated with administrative support of the Fund. Approved transfers out to the 

OWCP were $2,118,307 in FY 2011 and $2,124,000 in FY 2010. Transfers are 

made from the Special Fund in accordance with sections 39(c), 44(d), and 44(j) of 

the LHWCA. 

As of September 30, 2010, the FY 2010 approved transfers of $2,124,000 were not 

actually accomplished and an Expenditure Transfer Payable was reflected on the 

balance sheet. No such liability is required as of September 30, 2011 as the FY 

2011 approved transfer was made in FY 2011. 

U.S. Department of Labor – Office of Inspector General 

24 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(7) Status of Budgetary Resources 

(a) Apportionment Categories of Obligations Incurred 

(In Dollars)	 2011 2010 

Direct Obligations: 

Exempt from apportionment $ 126,589,732 $ 128,414,234 

(b) Explanation of Differences Between the Statement of Budgetary 

Resources and the Budget of the United States Government 

The budgetary resources, obligations incurred and outlays of the Fund are 

combined with the District of Columbia Workers’ Compensation Act Special 

Fund in the Program and Financing schedule of the Budget of the United 

States Government. A reconciliation of budgetary resources, obligations 

incurred and outlays, as presented in the Fund’s Statement of Budgetary 

Resources to amounts included in the Budget of the United States 

Government for the year ended September 30, 2010 is shown below: 

2010 

Budgetary Obligations

(Dollars in Millions) Resources Incurred Outlays 

Statement of Budgetary Resources - LHWCA $ 188 $ 128 $ 126 

Amounts included in the Statement of 

Budgetary Resources - DCCA 15 9 9 

Amounts included in the Statement of Budgetary 

Resources subsequent to submission of budget 10 2 4 

Total Statement of Budgetary Resources	 213 139 139 

Budget of the United States Government $ 213 $ 139 $ 139 

U.S. Department of Labor – Office of Inspector General 

25 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT SPECIAL FUND 

Notes to the Financial Statements 

Years ended September 30, 2011 and 2010 

(8) Reconciliation of Budgetary Resources Obligated to Net Cost of Operations 

2011 2010 

Budgetary resources obligated: 

Obligations incurred $ 126,589,732 $ 128,414,234 

Total resources used to finance activities 126,589,732 128,414,234 

Resources used to finance items not part of the 

net cost of operations 

Resources that funded expenditure transfers (2,118,307) — 

Total resources used to finance items not part 

of the net cost of operations (2,118,307) — 

Total resources used to finance the net cost 

of operations 124,471,425 128,414,234 

Components not requiring or generating resources: 

Revaluation of assets and liabilities 

Other 

(74,810) 

(51,509) 

(423,013) 

256,788 

Total components of net cost of operations 

that will not require or generate resources 

in the current period (126,319) (166,225) 

Net cost of operations $ 124,345,106 $ 128,248,009 

(9) Concentration of Risk 

The Fund makes assessments to authorized insurers and self-insurers one year at 

a time for current expenses; there is no reserve for future Fund obligations. In 

keeping with the requirement of Section 44 of the LWHCA, obligations are paid as 

they are incurred. Assessments are based on compensation and medical benefits 

paid in the prior calendar year. 

U.S. Department of Labor – Office of Inspector General 

26 Report Number: 22-12-004-04-432 
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Longshore and Harbor Workers’ Compensation Act Special Fund 

Financial Statements and Independent Auditors’ Report 

THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 

U.S. Department of Labor – Office of Inspector General 

27 Report Number: 22-12-004-04-432 
 

TO REPORT FRAUD, WASTE OR ABUSE, PLEASE CONTACT: 

Online: http://www.oig.dol.gov/hotlineform.htm 

Email: hotline@oig.dol.gov 

Telephone: 1-800-347-3756 

202-693-6999 

Fax: 202-693-7020 

Address: Office of Inspector General 

U.S. Department of Labor 

200 Constitution Avenue, N.W. 

 Room S-5506 

Washington, D.C. 20210