Audit Report 

OIG-07-049 

GENERAL MANAGEMENT: BEP Generally Has an Effective 

Program to Monitor Employees Receiving Workers’ Compensation 

Payments 

September 20, 2007 

Office of 

Inspector General 

Department of the Treasury 

Contents 

 BEP Generally Has an Effective Program to Monitor Employees Page i 

 Receiving Workers’ Compensation Payments (OIG-07-049)

Audit Report..................................................................................................... 1 

Background ................................................................................................. 1 

Finding and Recommendation ........................................................................ 3 

BEP Generally Has an Effective Program to Monitor Employees Receiving 

Workers’ Compensation Payments, But Certain Internal Procedures 

Should Be Formalized ............................................................................... 3 

Recommendation ..................................................................................... 5 

 

Appendices

 Appendix 1: Objective, Scope, and Methodology.......................................... 7 

 Appendix 2: Management Response ........................................................... 8 

 Appendix 3: Report Distribution.................................................................. 9 

Abbreviations 

 

 BEP Bureau of Engraving and Printing 

 COP Continuation of Pay 

 DOL Department of Labor 

 ECF Eastern Currency Facility 

 FECA Federal Employees’ Compensation Act 

 Fund Employees’ Compensation Fund 

 HR Human Resources 

 OIG Office of Inspector General 

 OWCP Office of Workers’ Compensation Programs 

 WCP Workers’ Compensation Program

 
This Page Intentionally Left Blank. 
OIG Audit 

Report

The Department of the Treasury 

Office of Inspector General 

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 Receiving Workers’ Compensation Payments (OIG-07-049)

 September 20, 2007 

 Larry R. Felix 

Director 

 Bureau of Engraving and Printing 

The Federal Employees’ Compensation Act (FECA) provides 

compensation benefits to civilian employees of the United States 

for disability due to personal injury or disease sustained while they 

are in the performance of duty. FECA also provides for payment of 

benefits to an employee’s dependents if a work-related injury or 

disease causes the employee’s death. We conducted an audit to 

determine whether the Bureau of Engraving and Printing (BEP) has 

an effective program to monitor employees receiving workers’ 

compensation payments. In accordance with the Office of 

Inspector General Fiscal Year 2007 Annual Plan, we are conducting 

similar audits at other selected Department of the Treasury offices 

and bureaus. Appendix 1 contains a description of our objective, 

scope, and methodology. 

In brief, we found that, overall, BEP has an effective program 

to monitor employees receiving workers’ compensation payments, 

but did not have written internal guidelines to address case file 

management and to monitor the status of overpayments. We are 

making one recommendation to address this matter. In the 

management response, provided as Appendix 2, BEP concurred 

with this recommendation. 

Background 

FECA benefits include compensation for lost wages, monetary 

awards for bodily impairment or disfigurement, medical care, and 

vocational rehabilitation. The Department of Labor (DOL) Office of 

Workers’ Compensation Programs (OWCP) and more than 70 

employing federal agencies share responsibilities for ensuring the 
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efficiency, effectiveness, and integrity of the major benefit program 

established under FECA. OWCP’s Injury Compensation for Federal 

Employees serves as a handbook for federal agency personnel 

specialists, compensation specialists, and supervisors.1 

All workers’ compensation claims are adjudicated by OWCP. FECA 

provides that an employee’s regular pay may be continued for up 

to 45 calendar days to avoid interruption of an employee’s income, 

while the case is being adjudicated by OWCP. This 45-day time 

frame is referred to as the continuation-of-pay (COP) period. OWCP 

begins paying FECA compensation benefits at the end of the COP 

period. Compensation for wage loss is paid at a percentage of the 

employee’s salary. The Employees’ Compensation Fund (Fund) 

finances OWCP FECA payments. 

Workers’ compensation costs are assigned to employing agencies 

annually at the end of the fiscal accounting period, which runs 

from July 1 to June 30. Each year, OWCP provides each agency 

with quarterly chargeback reports, then a final, annual chargeback 

billing list, which is a statement of payments made from the Fund 

on account of injuries to its employees. Employing agencies 

reimburse the Fund for these payments. 

Employing agencies play a major role in containing FECA costs by 

maintaining contact with the employee, helping recovering 

employees return to work, and accommodating light duty work, 

when possible. 

During January 2007, the Deputy Assistant Secretary for Human 

Resources and Chief Human Capital Officer issued guidance 

through the policy-setting Office of Human Resources Strategy and 

Solutions on the Treasury Workers’ Compensation Program (WCP) 

that outlines responsibilities for bureau heads, bureau WCP staff, 

supervisors, and employees.2

 BEP produces currency at two 

facilities that employ approximately 2,600 individuals. The Eastern 

Currency Facility (ECF) is located in Washington, DC, and the 

Western Currency Facility is located in Fort Worth, Texas. 

 

1

 OWCP Publication CA-810, Injury Compensation for Federal Employees (January 1999). 2 Office of Human Resources Strategy and Solutions, Human Resources Issuance System, Chapter 810, 

Transmittal No. 07-007, “Workers’ Compensation Program” (January 21, 2007). 
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BEP’s Office of Environment, Health, and Safety manages 

programs that minimize BEP’s impact on the environment, enhance 

employee wellness, and protect workers from injuries and 

disabilities. One of its programs is the WCP, which is managed 

through the Office of Human Resources (HR). Each facility has its 

own HR group. 

A BEP goal is to reduce occupational injury and illness rates. BEP 

injury prevention efforts in fiscal year 2006 resulted in a decrease 

of $6 million in the actuarial liability for workers’ compensation, to 

a total of $53.5 million.3

 According to BEP, this decrease in 

actuarial liability was the result of its continued focus on creating a 

safer working environment and reducing the loss of employee work 

time caused by injuries. 

Finding and Recommendation 

 BEP Generally Has an Effective Program to Monitor 

Employees Receiving Workers’ Compensation Payments, 

But Certain Internal Procedures Should Be Formalized 

We found that, overall, BEP has an effective program to monitor 

employees receiving workers’ compensation payments. 

Specifically, BEP has policies and procedures for the administration 

of FECA that outline assigned responsibilities, the extent of

coverage, and procedures for the administration of light and limited 

duty. BEP monitors the quarterly chargeback reports received from 

OWCP. It also uses internal monthly reports to (a) review 

compensation cases, (b) monitor the number of COP days, 

(c) analyze the costs related to injuries, (d) review cost savings, 

(e) monitor cases referred to OIG, and (f) review long-term cases. 

In addition, we found that HR staff members have a working 

knowledge of cases without referring to documents/files and keep 

 

3 The FECA liability consists of two components. One component, the actuarial FECA liability, is the 

liability for future benefit payments as estimated by DOL. The other component, the accrued FECA 

liability, is based on actual claims paid by DOL. For chargeback year 2006, BEP’s accrued liability was 

$4.2 million. The chargeback year runs from July through June. BEP reimburses DOL for the amount of 

actual claims, normally within 1 to 2 years after payment is made by DOL.
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BEP management abreast of issues at regular WCP meetings.4

Furthermore, when necessary, BEP also controverts5

 claims during 

initial processing; investigates workers’ compensation issues; and 

pursues third party liability.6

During our review, we identified three areas in which BEP could 

strengthen its WCP. We discussed these with HR managers and 

staff, and believe that the areas have since been addressed. 

• ECF was unable to locate 2 of the 57 case files that we 

selected for review. FECA benefits paid on these cases totaled 

approximately $6,000 for chargeback years 2004 through 

2006. The WCP manager believes that the files may have been 

destroyed when a storage area was being cleared. BEP 

subsequently recreated the case files. 

• At the time of our review, 12 ECF case files did not contain 

current forms CA-1032.7

 BEP HR staff explained that although 

the CA-1032 forms are generally part of the file, OWCP does 

not send the bureau copies after receiving the completed forms 

from workers’ compensation recipients. BEP generally obtains 

copies of these forms when a staff member calls or visits 

OWCP to review the case files and to obtain information. ECF 

staff advised us that BEP had contacted the responsible OWCP 

office and has since obtained more than half of the missing 

forms. 

• The status of overpayments was not being monitored. Our 

sample cases included 13 overpayments, totaling approximately 

 

4

 In addition to HR representatives, the WCP meetings may include personnel from the following groups: 

the Office of Chief Counsel; the Office of Security; and the Office of Environment, Health, and Safety. 

5

 An agency's objection to paying COP for one of the reasons provided by regulation is called 

controversion.

6

 A third-party claim arises when an injury is caused by a person or object under circumstances which 

indicate there is a legal liability on a party other than the U.S. government to pay the damages. 7

 OWCP policy requires FECA claimants receiving compensation benefits to periodically certify their 

earnings information and dependent status on a “Request for Information on Earnings, Dual Benefits, 

Dependents and Third Party Settlements Form” (CA-1032). This information is used to determine if any 

changes are necessary to a claimant's benefit amount.
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$27,000.8 HR staff advised that overpayments are generally 

identified by BEP rather than OWCP. While resolution of 

overpayments is the responsibility of OWCP, at the time of our 

review there had been no recent follow-up by BEP as to the 

status. Once we raised the issue, BEP staff contacted OWCP. 

The majority of the overpayments have since been resolved, 

and status requests are pending with OWCP on the others. 

At the time of our review, BEP did not have internal guidelines 

specifically addressing the three issues discussed above. Such 

internal guidelines, which are sometimes called desk procedures, 

would be at a more detailed level than the overall WCP policies and 

procedures discussed above. 

Although there is no OWCP requirement for detailed written 

internal guidelines, we consider it prudent and sound business 

practice to develop and implement such guidelines, which serve as 

a line of defense in safeguarding assets and in preventing and 

detecting errors and fraud. Internal guidelines that prescribe steps 

to monitor case files and employees with work-related injuries will 

help to improve the efficiency of the program, possibly reduce 

program costs, and aid in the recovery of overpayments to 

claimants. 

We discussed this matter with the ECF HR manager, who 

concurred and advised us that BEP is developing written internal 

guidelines outlining specific steps to be taken for workers’ 

compensation cases. Among the areas to be covered are 

conducting a periodic inventory to make sure there is a file for each 

case, tracking and reviewing forms CA-1032, and monitoring the 

status of overpayments. 

Recommendation

We recommend that the Director of BEP ensure that written 

internal guidelines are developed to outline specific steps to 

monitor the status of workers’ compensation cases. 

 

8

 These overpayments were caused by issues such as an underdeduction for Basic Life Insurance 

coverage and an excess payment on a Schedule Award. Also, three of the overpayments were to one 

recipient. 
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 Receiving Workers’ Compensation Payments (OIG-07-049)

Management Response 

BEP concurs with this recommendation and will develop and 

implement internal guidelines to monitor the status of workers’ 

compensation cases by January 2008. 

OIG Comment 

We believe that the actions planned by BEP address the intent 

of the recommendation. 

* * * * * * * 

We appreciate the courtesies and cooperation provided to our staff. 

If you wish to discuss this report, you may contact me at 

(202) 927-6512 or Maria V. Carmona, Audit Manager, 

at(202) 927-6345. Major contributors to this report were 

Ms. Carmona; Gerald H. Kelly, Auditor-In-Charge; and Horace A. 

Bryan, Auditor. 

Stephen P. Syriala 

Acting Director, Fiscal Service Audits 
Appendix 1 

Objective, Scope, and Methodology 

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 Receiving Workers’ Compensation Payments (OIG-07-049)

Our audit objective was to determine whether the Bureau of 

Engraving and Printing (BEP) has an effective program to monitor 

employees receiving workers’ compensation payments. 

We performed fieldwork primarily from November 2006 to March 

2007 in Washington, DC. As part of the fieldwork, we reviewed 

laws, regulations, and Treasury and BEP guidance. We interviewed 

BEP management to gain an understanding of the workers’ 

compensation process and controls at BEP. This included personnel 

at both BEP facilities, including HR, Counsel, and Security staff. 

We analyzed data from the 2006 chargeback report for BEP and 

files for indicators of program abuse, and referred such instances 

to the Office of Investigations for further inquiry. 

We also selected for review a sample of 85 records from a universe 

of 420 records of compensation and/or medical payments made 

during chargeback years 2004 through 2006.9

 This sample 

included 57 claimants for the Eastern Currency Facility and 

28 claimants for the Western Currency Facility. We determined if 

BEP had case files for each record in our sample. Additionally, we 

checked each file for completeness, which included, but was not 

limited to, whether there were certain OWCP basic forms in the 

file, such as the CA-1032s. We also determined whether BEP was 

monitoring the status of overpayments and reviewing the case files 

for opportunities to return the injured employees to limited 

light-duty work. 

We conducted our audit in accordance with generally accepted 

government auditing standards.

 

9 There were a total of 1,059 individual BEP cases during the 2004-2006 chargeback periods, totaling 

more than $13.4 million in compensation and medical payments. From this universe, we removed any 

case that had a zero or negative balance. A zero balance indicates that no compensation or medical 

payments were made. A negative balance indicates that an overpayment was collected during the 

period. In addition, if a claimant name appeared more than once, the cases were counted as one record. 
Appendix 2 

Management Response 

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 Receiving Workers’ Compensation Payments (OIG-07-049)
Appendix 3 

Report Distribution 

 BEP Generally Has an Effective Program to Monitor Employees Page 9

 Receiving Workers’ Compensation Payments (OIG-07-049)

Department of the Treasury

Office of Strategic Planning and Performance Management 

Office of Accounting and Internal Control 

Bureau of Engraving and Printing

Associate Director (Chief Financial Officer) 

Office of Management and Budget

OIG Budget Examiner