Watchdog questions post-scandal moves

The group said more oversight is needed.
COLUMBUS (AP) -- Reforms implemented by Gov. Bob Taft and lawmakers didn't go far enough to strengthen the board that oversees Ohio's troubled state insurance fund for injured workers, an independent consultant studying the fund has concluded.
The governor should not appoint the five voting members of the Workers' Compensation Oversight Commission, nor should he appoint the commission chairman, according to the report by Norwalk, Conn.-based Evaluation Associates.
The report, released Thursday by the state watchdog, also says the commission and not the governor should appoint the administrator of the workers' comp system.
Taft and lawmakers beefed up the board in the wake of last year's $300 million investment scandal, including the addition of two investment experts.
Thursday's report did not draw conclusions about the current board makeup and the scandal. Instead, it recommended far more sweeping changes, including the creation of a board that functions like a board of trustees with all decisions and documents made public.
"So long as nearly absolute power is vested with the governor, the potential for the abuse of this power exists," the report said.
Reactions from officials
Lawmakers ordered the report in last year's budget bill, and the analysis was overseen by the State Inspector General.
Workers' comp Administrator William Mabe did not immediately address the concerns about the board's makeup, but said the agency has made helping the board a priority. He singled out efforts to strengthen the agency's investment department and the creation of an independent internal auditor.
"The changes we have made go beyond external recommendations," Mabe said in a statement.
Bureau spokeswoman Nancy Smeltzer said the agency will continue to follow the law and procedures.
The report's recommendations are "policy decisions for others to debate."
Messages were left with Taft and oversight commission chairman William Sopko seeking comment. Senate President Bill Harris defended lawmakers' actions.
"We did what we thought had to be done to tighten things up," said Harris, an Ashland Republican. "We'll look at the recommendations and debate those, but we're not going to overreact."
The report said the agency still resembles a private company too closely, giving too much power to staff and not enough to the oversight commission.
It questioned why the commission's new investment experts are only allowed to vote on investment-related issues.
And it said having the attorney general represent the board created an obvious conflict of interest, because the attorney general also can file civil charges against the workers' comp bureau.
"It simply stands to reason that an attorney should not be able to bring action against his or her own client," the report said.
The report also suggested giving the Ohio Retirement Study Council authority to oversee the agency in the same way it oversees the state's five public pension systems.
And the analysis suggested lawmakers may have gone too far in requiring criminal background checks of everyone involved with investing bureau dollars.
Such a requirement is an overreaction to the scandal "and creates some unwieldy requirements that will materially diminish the Bureau's ability to contract with outside investment management firms," the report said.