Oklahoma Insurance Commissioner John D. Doak is urging school districts considering interlocal insurance agreements to be diligent about analyzing financial statements before joining an insurance pool.
To that end, the Oklahoma Insurance Department (OID) has launched a new webpage to help Oklahoma school districts with their due diligence.
Local school districts often enter into interlocal cooperative agreements to pool their liability and property risks. Such self-insured pools were not required to submit their financial statements to OID previously. But this year, the legislature passed and Gov. Mary Fallin has signed into law Senate Bill 692, which makes that requirement.
Interlocals must file an audited financial statement with OID within 180 days after the end of their fiscal year. Failure to file a timely report may result in a $500 per day fine.
The statement must include the report of an independent certified public accountant, a balance sheet reporting assets, liabilities and equity, footnotes to financial statements and statements of operations, cash flows and changes in assets, liabilities and equity.
“The goal here is transparency,” said Doak. “By making these financial statements readily available, school leaders can make well-informed decisions. The worse-case scenario is for one disaster to leave multiple schools in financial ruin. We can’t let that happen. We have to make sure these interlocal insurance pools are adequately covered for a significant loss.”
Once received, the financial statements will be posted on the department’s website.
Source: Oklahoma Insurance Department