One of its main priorities is to process employee-disability and workers-compensation claims for Risk Management, which oversees the $267 million workers compensation program.
During the 2009 fiscal year, which ended June 30, 2009, CompServices evaluated 88 out of 1,015 active cases, the audit found.
"As a result of this failure to evaluate the other 927 cases, the city's workers compensation costs are estimated to soar by another $64 million," said Controller Alan Butkovitz.
"Everybody knows that if you don't do your medical evaluations and you just assume that people are totally disabled, you're going to pay a much larger figure than everybody else in industry and everybody else in government does."
In a statement e-mailed yesterday afternoon, CompServices CEO Don Liskay questioned the accuracy of the report.
"City Controller Butkovitz inaccurately and incompletely refers to city workers compensation cases that our company evaluated as part of our contract with the city," Liskay wrote.
"The suggestion that case reviews are incomplete is simply incorrect. The 88 evaluations that he refers to only applied to injured workers being evaluated for permanent disability."
The audit also found that:
* The Department of Human Services was 245 days late submitting a $61 million invoice to the state for its Children and Youth Social Service Program, forcing the city to "unnecessarily borrow funds" and pay out $200,000 in interest "to cover the cash shortfall DHS generated," Butkovitz said.
* A problem with undercharging delinquent customers of the city-run Water Revenue Bureau cost the city $2 million in unbilled penalties. Outstanding water bills also increased by $19 million, leaving a total of $209 million uncollected.
* The lack of a comprehensive capital asset system makes it difficult for the city to keep track of property and assets.
In a cryptic response for both Risk Management and DHS, Finance Director Ron Dubow said he disagreed with some assessments and agreed with others but did not elaborate.
