D.C. Councilwoman Mary Cheh is asking for an audit of the city’s workers’ compensation agency.
Citing “concerns about improper denials … a general lack of knowledge of the relevant law … and even questions about whether the [agency] is properly managing claims,” Cheh, D-Ward 3, is asking Auditor Deborah Nichols to examine the records of the Office of Risk Management.
The agency is charged with keeping an eye on the District’s financial liabilities. It also has broad authority over the workers’ compensation fund. Several disabled workers have alleged publicly that the city has been deducting life insurance benefits from their bimonthly paychecks but hasn’t been giving life insurance policies.
“I don’t know what’s going on,” said Iwo Fairrow, who has been battling the city since August, when her husband, disabled schools maintenance man James Fairrow, died. “My house literally went into foreclosure.” Fairrow says that city officials initially denied that her husband had any life insurance.The city has since paid some $190,000 but Fairrow says she’s still entitled to James Fairrow’s annuity.
“Something is wrong with this picture,” she said. “What is the D.C. government doing with the money?”
Since 2004, some $2 million in life insurance payments from about 4,000 employees have gone into Risk Management’s funds, a city hall source said. The fund is consistently out of money, the source said.
The FBI has begun asking questions about the insurance payments, as well as contracts given out by the agency, several sources familiar with the investigation said. One law enforcement official described the FBI’s probe as “way preliminary.”
City Administrator Neil Albert convened a meeting of top officials to discuss the problem earlier this week, a city hall source said. The finance office has told the Fenty administration that the life insurance program must be fully funded in the fiscal 2011 budget, the source said.
Albert didn’t respond to requests seeking comment. Nor did Risk Management Director Kelly Valentine.
