REPORT TO SHASTA COUNTY BOARD OF SUPERVISORS

BOARD MEETING DATE:  February  27, 2018
CATEGORY:  Consent - Law and Justice-14.

SUBJECT:

Resolutions Authorizing the District Attorney to continue to Act as Grant Agent for the Workers’ Compensation and Automobile Insurance Fraud programs for the period July 1, 2018 through June 30, 2021.

Supervisorial District No. :  ALL

DEPARTMENT CONTACT:  Stephanie Bridgett, District Attorney (530) 245-6300

STAFF REPORT APPROVED BY:  Stephanie Bridgett, District Attorney

RECOMMENDATION

Take the following actions regarding the Workers’ Compensation Insurance Fraud and the Automobile Insurance Fraud revenue grant programs for the period July 1, 2018, through June 30, 2021: (1) Adopt a separate resolution for each program which approves and authorizes the Shasta County District Attorney to: (a) continue to serve as the agent for each program; (b) sign award agreements with the California Department of Insurance for each program; and (c) execute and submit future related documents (including retroactive) for each program including, but not limited to, applications, agreements, amendments, and payment requests, which may be necessary for the completion of each program; and (2) limit the District Attorney’s signing authority to $675,000 for both revenue programs.

SUMMARY

The recommended action will allow the District Attorney to continue to act as the agent for Shasta County, including signing revenue agreements with the California Department of Insurance, and administer grant programs to investigate and prosecute Workers’ Compensation and Automobile insurance fraud crimes.

DISCUSSION

The Board previously authorized the District Attorney to apply for funding from the California Department of Insurance (since the 1990s) to administer insurance fraud programs and the amount of funding varies from year to year. Grant applications and funding amounts for Fiscal Year 2018-2019 are not yet available to the department.  However, the Board-approved resolutions are required to be attached to the applications which will be submitted by the department in April (Workers’ Compensation Fraud) and June (Automobile Insurance Fraud).  Award letters are typically received in September for each of the programs.

For Fiscal Year 2017-2018, the award for the Workers’ Compensation Insurance Fraud Program was $147,122 and the funding was used to cover the costs of a full-time investigator, 5% of a prosecutor, and a few operating costs including $2,000 to pay for a grant-required annual audit by an independent Certified Public Accountant (CPA) firm. There were 59 Workers’ Compensation fraud cases on file which were investigated and/or prosecuted during the previous Fiscal Year.

For Fiscal Year 2017-2018, the award for the Automobile Insurance Fraud Program was $55,000 and the funding was used to cover the costs of  40% of an  investigator, 5% of a prosecutor, and a few operating costs including $2,000 to pay for a grant-required annual audit by an independent CPA firm. There were 22 automobile insurance fraud cases on file which were investigated and/or prosecuted during the previous Fiscal Year.

ALTERNATIVES

The Board could choose not to approve the resolutions; could defer acting on the resolutions until a later date; or could seek additional information from the District Attorney’s Office.

OTHER AGENCY INVOLVEMENT

The County Administrative Office has reviewed the recommendation.  County Counsel has reviewed and approved the resolutions as to form.

FINANCING

The District Attorney’s Office investigates and prosecutes insurance fraud crimes with or without this grant funding.  The grants typically reimburse a major portion of allocated salaries and benefits, with the exception of Other Post-Employment Benefits (OPEB) estimated at $3,900 annually for both fraud programs.  The grants also cover a few operating costs associated with the programs ($17,000 during Fiscal Year 2017-2018) including costs ($2,000 for each program) for grant-required annual audits by an independent CPA firm. Revenue for the unreimbursed costs for the programs was included in the Department’s annual budget and no additional General Fund support is being requested as a result of the recommended action.