Senate President
State of Wisconsin
Legislative Audit Bureau
October 27, 2005
The Honorable, The Legislature:
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As required by s.
13.94(1)(de), Wis. Stats., we have completed a financial audit of the Local Government Property Insurance Fund, which provides property insurance to counties, towns, villages, school districts, and other local units of government. he Property Fund is administered by the Office of the Commissioner of Insurance (OCI). As of June 30, 2004, it insured $35.9 billion in property owned by 1,203 local units of government. We have provided an unqualified auditor's report on the Property Fund's financial statements for the fiscal years (FYs) ending June 30, 2004, 2003, 2002, and 2001.
Because of changes in reinsurance coverage and increases in claims, the Property Fund experienced net losses of $8.1 million for the three-year period ending June 30, 2003. In response, OCI increased policyholder premiums. Following this increase, the Property Fund ended FY 2003-04 with net income of $9.2 million and a surplus of $24.5 million. OCI monitors the surplus level and believes it is currently appropriate in light of recent loss experience and recent changes in reinsurance.
In completing our audit, we encountered a serious documentation problem: a subcontractor for the previous fund administrator destroyed nearly all claim files for FYs 2000-01 and 2001-02. In order to provide the necessary documentation and assurances that claim payments were properly made, OCI had the destroyed claim files re-created with the assistance of the current fund administrator and local governments. OCI was able to provide an adequate level of documentation to allow us to provide an unqualified opinion on the financial statements.
We appreciate the courtesy and cooperation extended to us by OCI staff and the private firms responsible for administration of the Property Fund. OCI's response follows our report.
Sincerely,
JANICE MUELLER
State Auditor
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By Patrick E. Fuller, chief clerk.
Mr. President:
I am directed to inform you that the Assembly has concurred in:
Senate Bill 390
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The Chair, with unanimous consent, asked that the Senate adjourn until Tuesday, November 1, 2005 at 11:00 A.M.
Adjourned.
10:01 A.M.
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Senate amendment 1 to Senate Bill 205 offered by Senator Harsdorf.
Senate amendment 2 to Senate Bill 205 offered by Senator Harsdorf.
Senate amendment 1 to Senate Bill 338 offered by Senator Kanavas.
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The Chief Clerk records:
Senate Bill 4
Senate Bill 390
Senate Joint Resolution 44
Senate Joint Resolution 45
Report correctly enrolled on October 27, 2005.
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The Chief Clerk records:
Senate Bill 390
Presented to the Governor on April 27, 2005.
