Although the Division reviews many important financial controls implemented by casinos, it has not routinely used the Data Collection System to identify differences between amounts recorded by electronic meters and amounts counted by casino staff. These data are important in identifying potential irregularities in gaming operations and financial reporting that cannot be identified from other controls the Division reviews. Moreover, we found that from March 2006 through April 2007, the Division did not review data maintained by casinos to determine whether the tribes identified, investigated, and documented these differences, as required by their compacts.
We appreciate the courtesy and cooperation extended to us by the Division. The Division's response follows the appendices.
Respectfully submitted,
Janice Mueller
State Auditor
State of Wisconsin
Legislative Audit Bureau
September 21, 2007
The Honorable, The Legislature:
At the request of the Department of Health and Family Services (DHFS), we have completed a financial audit of the Health Insurance Risk-Sharing Plan (HIRSP) for fiscal year (FY) 2005-06. HIRSP provides medical and prescription drug insurance for individuals who are unable to obtain coverage in the private market or who have lost employer-sponsored group health insurance. We have provided an unqualified opinion on HIRSP's financial statements.
Policyholder enrollment and claims costs are beginning to moderate. Enrollment decreased 3.8 percent during FY 2005-06 and 5.6 percent during FY 2006-07, to reach 17,612 as of June 30, 2007. Following four years of double-digit increases, net claims costs decreased by 1.2 percent during FY 2005-06. Most notably, prescription drug costs decreased by $2.0 million. The creation of the federal Medicare Part D prescription drug coverage program has been a major contributing factor to these recent trends.
Correspondingly, HIRSP has maintained a sound financial position. The decrease in costs as well as an increase in revenues resulted in a $4.2 million dollar increase in HIRSP's unrestricted net asset balance, which totaled $3.9 million as of June 30, 2006.
A balance of excess policyholder premiums increased by $10.0 million during FY 2005-06 and reached $19.5 million as of June 30, 2006. At the direction of HIRSP's governing board, $13.3 million of that amount was applied toward the policyholders' share of costs, which has helped to limit premium increases for policyholders.
2005 Wisconsin Act 74 made significant changes to HIRSP. Among the most significant is the creation of the HIRSP Authority, which assumed oversight responsibility from DHFS on July 1, 2006. The Authority is currently pursuing several additional statutory changes, which are pending in the Legislature.
We appreciate the courtesy and cooperation extended to us by DHFS and the HIRSP plan administrator.
Respectfully submitted,
Janice Mueller
State Auditor
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Relating to use of the 2001 CSO Preferred Class Structure mortality Table in determining reserve liabilities.
Submitted by Insurance Commissioner.
Report received from Agency, September 27, 2007.
Referred to committee on Transportation, Tourism and Insurance, October 2, 2007
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Chief Clerk Marchant, with unanimous consent, asked that the Senate adjourn until Thursday, October 4, 2007.
Adjourned.
10:41 A.M.
