Lawmakers want answers about funds holding $55 million for work comp claims

Concerns about hoarding cash, denying claims, at taxpayer expense

Chase Vessells, a signal technician with the city of Sioux Falls, is among thousands of public employees across the state entitled to work comp funds when injured while performing their duties. (Joe Sneve/The Dakota Scout)

A bipartisan group of South Dakota lawmakers wants answers about why two funds for local governments have as much as $55 million in assets.

Those assets include tens of millions of dollars in certificates of deposit as well as other investment income, and they have seen consistent growth over the years.

Lawmakers on the Government Operations and Audit Committee (GOAC) have voted to create legislation that would require the South Dakota Municipal League and the Associated School Boards of South Dakota to come to the committee and explain the finances around the two funds.

The funds in question were created to give cities and school districts the ability to pool resources to offer workers compensation insurance. Workers compensation covers employees who get hurt while at work.

But the growing value of the funds suggests to some lawmakers that the two local governmental entities might be denying valid workers comp claims or taking more money from taxpayers than they should.