What is the purpose of the documentary audit conducted by the director of self-insured employers?

• A. To evaluate workplace safety measures
• B. To ensure accurate reporting of financial information
• C. To investigate employee complaints
• D. To assess claim processing speed

Answer: (B)

The purpose of the documentary audit conducted by the director of self-insured employers is primarily to ensure accurate reporting of financial information. This process is vital because self-insured employers take on the financial risk of providing workers' compensation benefits to their employees. By examining financial records, transactions, and claims documents, the audit helps verify that all expenses are documented properly and that funds are being allocated appropriately. This not only aids in compliance with legal and regulatory requirements but also provides insight into the financial health of the self-insured program.

Accurate financial reporting is crucial for maintaining the sustainability of the self-insured plan and for making informed decisions regarding future insurance funding, reserve levels, and risk management strategies. It ensures that the company can adequately cover its liabilities and allows for transparency and accountability in its operations.