SAIF Corporation Board of Directors Audit committee meeting minutes  for April 1, 2009
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SAIF Corporation Board of Directors Audit committee meeting minutes for April 1, 2009

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SAIF CORPORATION BOARD OF DIRECTORS AUDIT COMMITTEE Wednesday SAIF Corpration April 1,209 40High SeSE9:0a.m alem,Oregon After determining a quorum was present, the meeting was called to order at 9:00 a.m. Roll Call: John Endicott Catherine Travis SAIF Corporation Personnel Present: Brenda JP Rocklin, President and CEO Cathy Pollino, Chief Internal Auditor Casey Baumert, Corporate Internal Auditor Jerry Dykes, Chief Financial Officer Michelle Graham, Vice President of Claims Michael Hartman, Vice President of Underwriting Services Theresa McHugh, Vice President of Financial Services Mike Mueller, Senior Vice President of Claims and Legal Services Garry Robinson, Vice President of Information Services Colleen Sealock, Vice President of Operations and Human Resources Sara Bayes, Executive Assistant Approval of Audit Committee Minutes Motion Mr. Endicott, second Ms. Travis to approve the minutes of the December 10, 2008 meeting. The vote was unanimous, and the motion was carried. Accuracy of Claims Information Audit Cathy Pollino reported on an audit that followed up on the 2008 internal audit report, “Accuracy and Completeness of Key Claims Information.” The purpose of the follow-up audit was to determine whether the quality of information captured and reported about claims has improved. The follow-up audit found that the accuracy of the data reported to the National Council on Compensation Insurance ...

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SAIF Corporation | 400 High St | Salem, OR 97312 | P: 800.285.8525
SAIF CORPORATION
BOARD OF DIRECTORS AUDIT COMMITTEE
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After determining a quorum was present, the meeting was called to order at 9:00 a.m.
Roll Call:
John Endicott
Catherine Travis
SAIF Corporation Personnel Present:
Brenda JP Rocklin, President and CEO
Cathy Pollino, Chief Internal Auditor
Casey Baumert, Corporate Internal Auditor
Jerry Dykes, Chief Financial Officer
Michelle Graham, Vice President of Claims
Michael Hartman, Vice President of Underwriting Services
Theresa McHugh, Vice President of Financial Services
Mike Mueller, Senior Vice President of Claims and Legal Services
Garry Robinson, Vice President of Information Services
Colleen Sealock, Vice President of Operations and Human Resources
Sara Bayes, Executive Assistant
Approval of Audit Committee Minutes
Motion Mr. Endicott, second Ms. Travis to approve the minutes of the December 10,
2008 meeting.
The vote was unanimous, and the motion was carried.
Accuracy of Claims Information Audit
Cathy Pollino reported on an audit that followed up on the 2008 internal audit report,
“Accuracy and Completeness of Key Claims Information.” The purpose of the follow-up
audit was to determine whether the quality of information captured and reported about
claims has improved. The follow-up audit found that the accuracy of the data reported
to the National Council on Compensation Insurance has improved, but there are
opportunities to improve it further. The follow-up audit found that 17 percent of the
claims had incorrect body part, nature, or cause of injury, compared to the previous
audit results of 57 percent. There was also great improvement in the accuracy and
completeness of hire dates and times of injury.
Internal Audit recommended that Claims management work with Loss Control to better
define common injuries and communicate those definitions to Claims staff.
In addition,
Internal Audit recommended that Information Services make minor system changes to
help ensure accurate claims information capture and reporting.
Board Audit Committee
April 1, 2009
Page 2
SAIF Corporation | 400 High St | Salem, OR 97312 | P: 800.285.8525
Records Management Audit
Ms. Pollino reported that the purpose of the records management audit was to
determine whether processes were in place to manage policy, claim, personnel, legal,
and board files in accordance with established records retention schedules. SAIF
currently stores its records at SAIF facilities, the State Records Center, and at Iron
Mountain. Ms. Pollino reported that some records stored at Iron Mountain and at SAIF
need to be inventoried and better organized.
In addition, a long-term records storage
plan is needed for paper and electronic files.
Internal Audit recommended that SAIF’s Records Management Unit work with program
areas to review inventory lists, update box descriptions, and link records to SAIF’s
current retention schedule. Internal Audit also recommended that management
implement a long-term plan for the retention and destruction of paper files and
electronic records.
Audit Update Report
Audit work is in progress on the accuracy of the data warehouse, the claim bill payment
process, and agency commission calculations.
In addition, SAIF management has made
good progress implementing outstanding audit recommendations; all recommendations
either have been implemented or are in the process of being implemented.
Model Audit Rule Update
Ms. Pollino advised that the audit committee documentation of SAIF’s internal controls
and processes has been completed by Internal Audit and Deloitte and Touche. Several
areas have design deficiencies, and remediation plans are being developed.
A handout on the status of identified deficiencies was provided in the audit packet,
along with suggested recommendations.
Ms. Pollino advised that Deloitte and Touche had two suggestions for modifying entity
level controls regarding SAIF’s Audit Committee:
SAIF’s Audit Committee members should meet annually with the Chief Financial
Officer, the Chief Actuary, and the Financial Reporting manager, as well as
external auditors, without management present.
Although not required for Model Audit Rule compliance, SAIF should consider
adding a financial expert to the Audit Committee as a best business practice.
DCBS Financial Exam
Ms. McHugh reported that DCBS had one recommendation in its official report. They
concluded that the custody agreement between the Oregon State Treasurer and State
Street Bank should be changed to incorporate certain administrative requirements.
Recommendations have been forwarded to the State Treasurer.
Board Audit Committee
April 1, 2009
Page 3
SAIF Corporation | 400 High St | Salem, OR 97312 | P: 800.285.8525
External Audits
KPMG has completed the information systems portion of the audit; the financial portion
will begin in May.
Future Meetings
The next Audit Committee meeting will be June 10, 2009 in conjunction with the board
of directors meeting at SAIF’s Portland office.
Other Business
The Audit Committee members met with the Internal Audit staff and the Chief Financial
Officer without other SAIF management present.
There being no further business, the meeting adjourned at 9:56 a.m.
_________________________________________
Sara Bayes, Executive Assistant to the Board