Report says highway agency more efficient
CHARLESTON, W.Va. - The state Division of Highways has streamlined the way it responds to vehicle damage claims, reducing the burden on the public and the court that handles the cases, according to a recent report.
Legislative auditors found the division is doing a better job paying those claims and reducing the backlog of cases on the state Court of Claims docket.
John Sylvia, director of the Performance Evaluation and Research Division of the Legislative Auditor's office, gave the report to lawmakers last week.
"The practice of the DOH reviewing, identifying and resolving cases ... has had a positive impact, and the DOH has reported it will continue the process," Sylvia said in his report.
The report was following up on a 2010 report that criticized the way the division challenged all cases made against it in the state Court of Claims, the agency assigned to investigate claims against the state for monetary damages.
Because the state has general immunity from being sued in circuit court, the Legislature created the Court of Claims in 1967 to hear claims against state agencies. The state Attorney General's Office handled the process before then but it became too cumbersome.
Claims handled by the court include wrongful imprisonment, property damage, personal injury and wrongful death. Most involve damage to vehicles on state-owned roads.
In 2008 and 2009, 70 percent of all claims made against the state were filed against the Division of Highways. Most were for less than $2,500.
Most claimants said potholes or other road defects caused the damage.
While the claims were for relatively small dollar amounts, auditors found the state's cost to process those claims was very high because of the time it took to hold hearings and perform all of the administrative processes needed to handle cases.
"The average amount claimed in those cases was $475," the report said. "However, the average cost to the state to completely adjudicate one claim was $1,339."
Auditors found that in 2008 and 2009, the court had 840 cases for amounts less than $2,500 awaiting a small claims hearing. The large number of pending cases led to a one-year delay in the court hearing cases and forced people making claims to have to wait an average of two and a half years before receiving payment.
Auditors faulted the Division of Highways for causing the lengthy court delays.
Of all the agencies involved in court proceedings, the division was the only one that consistently denied every claim. Each denial forced an automatic hearing.
"While the practice of denying every claim saved the DOH money, it contributed to a large number of pending cases, increased the cost to the State, and placed an undue burden on the public," the report said.
The 2010 report concluded the Division of Highways officials were denying every claim because they knew that typically half of all claimants would not end up showing for their hearing.
"The Legislative Auditor determined that the DOH practice of denying every claim was a way of taking advantage of claimants not appearing for a hearing, and therefore, DOH would not have to pay an award," the report said.
Highways officials denied that claim.
Division spokesman Brent Walker said once a claim is filed against the agency, officials have just 30 days to investigate whether the claim is valid and prepare an official response. Walker said the agency simply did not have the time nor the manpower to conduct these investigations within that timeframe.
"We have a responsibility to be good stewards of taxpayers' money," Walker said. "We have that responsibility to investigate the claim."
Walker noted that bad winter storms in 2008 and 2009 took a toll on state roadways and as a result, increased the number of claims filed against the agency. He said the division was receiving an average of one new claim per day at the time.
Because highway crews were tied up in snow removal and ice control operations, they also had even less time than usual to investigate claims.
"We had to just deny the claim, thus giving us additional time to either investigate the claim, settle or confess the judgment," Walker said. "Or, if we determined it to be fraudulent, we would proceed accordingly."
While officials disagreed with the 2010 report's conclusion that the division was denying cases to take advantage of people not showing for hearings, Walker said they did use it as a chance to review their procedures.
"We viewed it as an opportunity to get better, to review what we were doing and if possible, be more efficient," he said.
Officials began looking at claims as a whole and mapping out where they occurred. If some were grouped in known road damage areas and around the same time period, officials began grouping those cases together.
After a general investigation, division attorneys began drafting what are known as omnibus orders to process the claims as a whole.
Sylvia said in his latest report this new process has led to a significant reduction in the backlog.
"It is the Legislative Auditor's opinion that the DOH's procedural change in using Omnibus Orders has significantly reduced the burden to the public and the State," he said in the report.
Instead of denying 100 percent of the claims, the division now denies an average of 75 percent of claims.
Court of Claims clerk Cheryle Hall said in the report the court was pleased with the new process, though she noted it did cause the number of court claims paid in fiscal year 2011 to jump significantly.
"The process for omnibus orders ... alleviated the backlog of claims against the Division during the years prior to and including the 2010 calendar year," Hall said. "Therefore the 2011 claims bill had a total of 468 claims, more than the average of 150 in previous claims bills."
As a result, total claims paid hit $8.4 million in fiscal year 2011, compared to $3.8 million the year before.
The Division of Highways also has benefited from mild winters.
The 2012 fiscal year saw new claims fall to 342. Since July 1, only 78 claims have been awarded.
"All in all, the Court is satisfied that counsel for the Division of Highways is trying to be fair and reasonable to the claimants who file claims in our Court," Hall said.
To also help the process, auditors recommended in 2010 the Legislature consider establishing a new claims review procedure for claims totaling less than $2,500. Under this system, thee Court of Claims clerk would be determined whether to award these claims without the need for a hearing.
The Legislature has not acted on that recommendation.
Contact writer Jared Hunt at email@example.com or 304-348-5148.