Bulletin No. 71-05
November 9, 2005

DWC issues profile audit performance standards and full compliance audit standards for 2006

The Division of Workers’ Compensation Audit and Enforcement Unit has issued its audit standards for 2006. Since January of 2003, the Audit Unit has been charged with conducing workers’ compensation claims audits under Labor Code sections 129 and 129.5. The Audit Unit is required to conduct a profile audit review (PAR audit) of each of over 500 adjusting locations at least once every five years. Audit subjects that do not meet or exceed PAR performance standards are subject to a full compliance audit (FCA).

As part of the audit program, Labor Code section 129(b) requires the DWC administrative director to annually establish and publish a profile audit review standard and a full compliance audit standard for audits to be conducted in the following year. The standards are based on the prior final audit reports issued over the three calendar years before the year preceding the audit year. The 2006 standards are based on final audit reports from 2002, 2003, and 2004. The 2006 PAR standard is 1.83856 and the FCA standard is 2.51920.

More information on the performance standards that will be in use for the profile audit reviews and full compliance audits during calendar year 2006 are now posted at the DWC Audit and Enforcement Unit Web site at http://www.dir.ca.gov/DWC/audit.html.