State risk management practices in washington
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State Risk Management Practices in Washington. Preliminary Report. Joint Legislative Audit & Review Committee June 23, 2011 Stacia Hollar, JLARC Staff. The Study Addressed Three Major Areas. Washington has broader tort liability than other states

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State Risk Management Practices in Washington

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State risk management practices in washington

State Risk Management Practices in Washington

Preliminary Report

Joint Legislative Audit & Review Committee

June 23, 2011

Stacia Hollar, JLARC Staff


The study addressed three major areas

The Study Addressed Three Major Areas

  • Washington has broader tort liability than other states

  • The Office of Financial Management and the agencies we reviewed (WSDOT, DOC and DSHS) are conducting post-incident reviews

  • WSDOT, DOC and DSHS are employing risk management best practices, but DOC and DSHS should strengthen some practices

State Risk Management Practices in Washington


Jlarc directed to review the effect of risk management practices on tort payouts

JLARC Directed to Review the Effect of Risk Management Practices on Tort Payouts

  • A tort is a legal action brought to recover damages for bodily injury, death, or property loss

  • Prior to 1961, the state could not be sued for torts because of sovereign immunity

    • Legislature waived immunity, providing the state can be sued to the same extent as other persons

    • Example: sue WSDOT for crash on highway

  • $399 million in tort payouts and defense costs during fiscal years 2004–2010

Report Pages 3-5

State Risk Management Practices in Washington


Three state agencies accounted for 75 percent of the state s payouts

Three State Agencies Accounted for 75 Percent of the State’s Payouts

2004 – 2010

All Other Agencies

$98 M

DSHS

$141 M

25%

35%

18%

DOC

$73 M

22%

WSDOT

$87 M

Total: $399 M

Source: Office of Financial Management.

Report Page 4

State Risk Management Practices in Washington


Risk management has both centralized and decentralized components

Risk Management Has Both Centralized and Decentralized Components

  • The Office of Financial Management provides statewide risk management guidance

Risk management responsibilities

Before 2002

Department of General Administration

Since 2002

Office of Financial Management

Starting 2011

Office of Enterprise Services

  • The three state agencies we reviewed also engage in risk management activities

Report Page 12

State Risk Management Practices in Washington


State risk management practices in washington

Washington and Other States’ Tort Liability Laws


Washington s tort liability differs from that of other states in six general categories

Washington’s Tort Liability Differs From That of Other States in Six General Categories

  • Broad waiver of “Sovereign Immunity”

  • Lack of “Discretionary Immunity” defense

  • Court’s determination of a duty to protect the general public from supervised offenders

  • No damage caps

  • Has “Joint and Several Liability” in which state may pay whole award not just the state’s percentage

  • Fewer procedural protections

Report Page 5-6

State Risk Management Practices in Washington


Other states reviewed lack broad liability provisions

Other States Reviewed Lack Broad Liability Provisions

# of categories in common with WA

0 categories(14 states)

1 category(11 states)

2 categories(9 states)

3 categories(2 states)

Reviewed(36 states)

NH

VT

WA

ME

MT

ND

MT

OR

MN

MA

ID

NY

WI

SD

MA

WY

MI

RI

NY

CT

IA

PA

NE

NV

NJ

OH

CT

IA

IL

IN

UT

DE

CA

CO

WV

VA

MD

KS

MO

KY

CA

NC

TN

AZ

OK

NC

NM

AR

SC

GA

MS

AL

LA

TX

AK

FL

AK

HI

HI

Source: JLARC analysis of other states’ liability laws.


Tort payouts are not the best measure of risk management practices

Tort Payouts Are Not the Best Measure of Risk Management Practices

  • Some liability categories such as damage caps do not relate to management practices

  • A consistently small number of events result in majority of tort payouts

    • Example: Five or fewer DOC incidents per year cause total payout

  • Does not include information to be gained from incidents that don’t result in lawsuits

Report Page 13

State Risk Management Practices in Washington


State risk management practices in washington

Risk Management Practices: Post-Incident Reviews by

Office of Financial Management

Dept of Transportation

Dept of Corrections

Dept of Social & Health Services


Ofm and state agencies conduct post incident reviews

OFM and State Agencies Conduct Post-Incident Reviews

  • Incident occurs

  • Post-incident review performed

  • Future incidents avoided or reduced

  • OFM required by law to conduct post-incident reviews through the use of independent Loss Prevention Review Teams (LPRT)

  • Agencies conduct other reviews under internal policies

Report Page 7

State Risk Management Practices in Washington


Ofm is conducting fewer post incident reviews than expected

OFM is Conducting Fewer Post-Incident Reviews Than Expected

  • Fiscal note related to the enacting bill anticipated 12 LPRT reviews per year, but over seven years (2003-2009) OFM has completed a total of 10 reviews

  • Law allows OFM discretion to decide when to investigate

  • OFM states the most frequent reasons for not conducting LPRT review:

    • Agency had addressed the risk

    • Already reviewed by agency or outside group

Report Pages 7-8

State Risk Management Practices in Washington


State law limits the use of lprt reviews in litigation

State Law Limits the Use of LPRT Reviews in Litigation

  • The LPRT report is not admissible as evidence in either court or administrative proceedings

    • Report is available to the public

  • Members of the LPRT may not be questioned in a proceeding regarding

    • the work of the team;

    • the incident under review, or

    • the statements of anyone providing information to the team.

Report Page 7

State Risk Management Practices in Washington


Wsdot uses post incident reviews to design highway projects

WSDOT Uses Post-Incident Reviews to Design Highway Projects

WSDOT’s tort payouts and defense costs

Other

Highway Safety Program

32%

68%

Over the past seven years

Source: OFM.

  • WSDOT maintains databases regarding frequency, location, and contributing causes of crashes

  • Data is used to determine patterns and contributing factors in order to design effective engineering approaches

Report Page 9

State Risk Management Practices in Washington


Examples of actions resulting from wsdot reviews

Examples of Actions Resulting From WSDOT Reviews

  • Installation of highway cable median barriers

  • Actions to mitigate rock slides

  • Placement of rumble strips

  • WSDOT estimated that its costs for the 2009-11 biennium were $4.5 million, which includes its entire safety program

Report Page 9

State Risk Management Practices in Washington


Doc conducts critical incident reviews within community corrections division

DOC Conducts Critical Incident Reviews within Community Corrections Division

DOC’s tort payouts and defense costs

Other

43%

Supervision of Offenders

57%

Over the past seven years

Source: OFM.

  • Critical Incident Reviews are conducted by Community Corrections Division staff

    • Reviews include written action plans

    • Agency policy requires the Assistant Secretary to review and identify trends, and ensure issues are addressed

Report Pages 9-10

State Risk Management Practices in Washington


Example of action resulting from doc reviews

Example of Action Resulting From DOC Reviews

  • Issue identified: Possible coverage gaps when community corrections officers are on leave

  • Response: Modification of policy to ensure coverage of supervised offenders

  • DOC estimated that costs for the Community Corrections Division to perform post-incident reviews for the 2009-11 Biennium were $279,000

Report Page 10

State Risk Management Practices in Washington


Dshs conducts reviews based on statute and internal policies

DSHS Conducts Reviews Based on Statute and Internal Policies

DSHS’s tort payouts and defense costs

Other

28%

Children’s Administration

72%

Over the past seven years

Source: OFM.

  • Children’s Administration conducts reviews

    • As the result of internal policies

    • Pursuant to the statutory requirement to conduct Child Fatality Reviews (CFR)

Report Pages 10-11

State Risk Management Practices in Washington


Requirements for child fatality reviews changed during the 2011 session

Requirements for Child Fatality Reviews Changed During the 2011 Session

  • State law required that DSHS conduct CFRs on unexpected deaths of children who had been in the care of, or received services from, Children’s Administration in the past 12 months

  • New law requires CFRs only where the death was suspected to be the result of abuse or neglect

  • Law also contains restrictions on litigation use of reports and witnesses similar to LPRT

Report Pages 10-11

State Risk Management Practices in Washington


Example of action resulting from dshs reviews

Example of Action Resulting From DSHS Reviews

  • Issue identified: not all complaints of bruises to infants being investigated

  • Response: Children’s Administration revised its policy to ensure that all reports were being investigated

  • DSHS estimated that the costs in the 2009-11 Biennium for performing CFRs were $538,000

Report Page 11

State Risk Management Practices in Washington


State risk management practices in washington

Risk Management Best Practices: Enterprise Risk Management (ERM)


Enterprise risk management a continuous process for managing risk

Review & Report

Analyze Risk

Address Risk

Prioritize Risk

Enterprise Risk Management: A Continuous Process for Managing Risk

Identify Risk

Source: JLARC analysis of ERM process.

Report Page 14

State Risk Management Practices in Washington


Enterprise risk management is a best practice

Enterprise Risk Management is a Best Practice

  • Used in private business as well as other governmental entities

  • Looks broadly at risks and provides a framework for managing them

  • OFM began implementation in Washington in 2006

  • JLARC used the five Enterprise Risk Management principles to evaluate practices of WSDOT, DOC and DSHS

Report Pages 14-15

State Risk Management Practices in Washington


Wsdot applies all five principles in its highway safety program

WSDOT Applies All Five Principles in its Highway Safety Program

Report Page 16

State Risk Management Practices in Washington


Doc needs to strengthen application of review and reporting principles

DOC Needs to Strengthen Application of Review and Reporting Principles

Report Page 17

State Risk Management Practices in Washington


Recommendation to doc

Recommendation to DOC

  • The Department of Corrections should develop and implement a policy for the consistent review of, and reporting on, the effects of actionstaken in the Community Corrections Division to address risks.

Report Page 18

State Risk Management Practices in Washington


Dshs should strengthen policies and practices in two areas

DSHS Should Strengthen Policies and Practices in Two Areas

Report Page 19

State Risk Management Practices in Washington


Recommendations to dshs

Recommendations to DSHS

  • The Department of Social and Health Services should address the risks identified in the RSVP report regarding Children’s Protective Services investigations and report its results to the Legislature by December 2011.

  • The Department of Social and Health Services should develop a method for reviewing and reportingon the effect of actions taken in the Children's Administration to address risks.

Report Page 20

State Risk Management Practices in Washington


The study addressed three major areas1

The Study Addressed Three Major Areas

  • Washington has broader tort liability than other states

  • The Office of Financial Management and the agencies we reviewed (WSDOT, DOC and DSHS) and are conducting post-incident reviews

  • WSDOT, DOC and DSHS are employing risk management best practices, but DOC and DSHS should strengthen some practices

State Risk Management Practices in Washington


Next steps and contact information

Next Steps and Contact Information

Proposed Final Report: July 2011

Stacia E. Hollar

360-786-5191

[email protected]

www.jlarc.leg.wa.gov

State Risk Management Practices in Washington


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