This card is intended as a Quick Reference Guide for industrial insurance (workers’ compensation) purposes. We make every effort
to ensure that it is correct. When using this card, please understand it is not intended to replace Department of Labor & Industries’ or
insured’s policies, procedures, RCWs or WACs in their entirety.
Workers’ Compensation
Record Keeping and Reporting Guides
F214-020-000 [03-2013] Audit Reference Card
Why do we do audits?
There are several reasons why we do audits. The
primary and most important reason, however,
is to validate the information we use to develop
premiums rates. Occasionally we do audits to verify
injury claims unusual for industry or as a result of
a complaint led by a concerned citizen.
What is an audit?
An audit is a review of your books and records
to verify correct hours have been reported in the
correct risk classications. Audits may also be
performed to determine if your rm has workers
covered by Washington workers’ compensation laws
(industrial insurance laws). Audits may include a
visual inspection of a job site or work location.
What records will we look at?
We will review any and all records that will assist
us in validating the worker hours reported to
the Department of Labor & Industries (L&I) are
accurate. All of the records we request are records
required to be kept by federal and state laws. The
following are examples of records we may request:
Daily time cards or time records
Individual earning records
Check registers
Bank statements and cancelled checks
Cash payment records and petty cash accounts
Purchase and sales records
Accounts receivable and accounts payable records
General ledgers
Financial reports
Other income and expense records
Contracts and service agreements
Tax returns and all schedules
Ownership records
Meeting records
Articles of incorporation or formation
Accounting work papers
Will the auditor need records other than those
listed above?
Yes, our representative may request additional
information, not limited to but including interviews
with the rm’s owner, accountant, workers,
suppliers, customers, and subcontractors to validate
information.
How will you know if your firm is being audited?
Our representative will contact you to set up an
appointment. At that time we will provide you with
a list of requested records to be reviewed.
What should you expect when meeting with
the auditor?
Our representative will introduce him/herself to
you, give you a brief overview of the audit process,
and explain the period and scope to be covered by
the audit. During this time our representative will
ask questions about your business. We refer to this
as an entrance interview.
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Audit Reference Card
How will you know when the audit is complete?
Our representative will contact you to discuss
the results of the review. If he/she has identied
problem areas, they will be discussed at this time.
In some cases you may be notied of the results by
phone or by mail. You can request a formal meeting
to discuss the results of the review.
Confidentiality
All information you provide will be maintained in
strict condence and is not available to the public.
However, L&I has information-sharing agreements
with other state agencies and the Internal Revenue
Service.
What if you disagree with the audit findings?
You have the right to present to us additional
information you believe addresses the concerns our
representative has identied. You must submit this
information to us in a timely manner if you want
the information to be considered.
What if you still disagree with the audit findings?
We will send you a copy of the Field Audit Results
and a legal document we refer to as a Notice and
Order of Assessment (NOA). Once you’ve received
this document you may request a reconsideration
meeting to discuss your issues. To request
reconsideration, submit a written request to the
Revenue Agent listed on the NOA. You should pay
special attention to the dates on the NOA. If you do
not request reconsideration within the allowable
time frame (30 days), the order becomes nal.
Do you have other appeal rights?
Yes, you have appeal rights but you must exercise
those rights within the legal allowable time
frame(s). You may call the Field Audit Supervisor at
one of the ofces listed below for assistance.
Everett: 425-290-1300 Tumwater: 360-902-5799
Seattle: 206-515-2800 East Wenatchee: 509-886-6500
Tacoma: 253-596-3800 Spokane: 509-324-2600
