From Industry Professionals
William Morris, Inc., Holly L. – Business Manager, WA
Ted Carlson took a complex process and distilled it down into terms that we could understand and work with. He helped us to find the best solution and outcome to our audit and we were extremely pleased with the end result. I would HIGHLY recommend him to anyone who is in need of an expert in the L&I arena!
Payroll Solutions, Janet, Renton, WA
“Finally – a business owner’s friend to navigate employer based L&I audits. We recommend Liberty Bay on all L&I Audits. For small employers, the time system is affordable and can also help with compliance.”
CFO2Go, Daniel C., Principle, Bothell, WA
“Ted has represented two of my clients undergoing audits with the Washington Department of Labor & Industries. In both instances, Ted worked directly with the auditor and was able to reduce the amount of time and information requests to a reasonable level thereby allowing the company and myself to focus on the daily operations. In one instance, the client had been non-compliant and we were in the process of reporting the delinquent taxes when the audit notice was received. I immediately called Ted and he knew exactly what to do, saving the client thousands of dollars in non-compliace penalties. I could not imagine going through an L&I audit without his representation.”
Case in Point: Safety Citations for Siding Contractor
- Fall protection and hazards issues
- Work plan not available
- No document of hazard assessment for personal protective equipment
A background analyzing the citation identified how the owner and employees handled the situation incorrectly. Applicable codes were demonstrated for:
- Management’s responsibility per WAC 296-155-100
- Accident prevention program per WAC 296-155-110 including a fall protection work plan
- Fall restraint, fall arrest systems identified per WAC 296-155-24510
- Fall protection work plan per WAC 296-155-24505
- Documentation of the hazard assessment for PPE per WAC 296-800-16010
- Providing fall protection fro employees on scaffolds per WAC 296-874-20052
A discussion, analysis, and recommendation plan was implemented to prevent future citations, and written arguments provided for an appeal to reduce the amount of the citation.
- Family members bidding, managing projects, and maintaining yard equipment
- Paying salaries to multi-classifications with no job records
- Public works subcontracts and record keeping not in compliance
- Subcontracting work using owned equipment in other classifications
- Not keeping subcontractor compliance records up to date
The firm never has been contacted by any state agency or their Policy Managers to inform them of the changes in record keeping requirements and compliance issues over the years they have been in business.
An evaluation of the state auditor’s assessment found many errors in LNI audit policies. The assessment was assigned to the rented equipment for employee hours through Average Hourly Wage estimates. Record keeping was not in compliance with the assigned classifications. No field audit calculation sheets were included in the final assessment by the Department of Labor and Industries.
A re-audit by the Liberty Bay examiner recommended establishing procedures to run the business in compliance with the assigned classifications. New procedures and contract agreements were implemented for equipment rentals and subcontractor compliance. There should be no future audits if recommendations are followed.
- Payroll records not identifying classifications of remodeled work on time cards
- State auditor using highest classification assignments for premium assessments
- State auditor assigned classifications based on sampling technique
- State auditor assigned one time only classes based on faulty documentation
The firm misused remodeling classification and interior finish carpentry classifications. Since a lot of the duties are similar such as preparing the job site for new installations of appliances and plumbing, records were not kept per WAC 296-17-31017.
The audit questionnaire was filled out incorrectly which led the State auditor to disallow hours in 0513 and assignment of new classifications that did not fit the business model unique to the insurance restoration industry.
All time records, procedures, and subcontractor documentation were reviewed and updated to reflect the new LNI reporting standards. The premium assessments in all classifications were examined and found to be sampled and invalid. A Reconsideration package was provided to the firm to discount the amount of the premiums and how the State auditor indiscriminately assigned hours.
- Independent contractors did not comply with reporting regulations
- Firm did not monitor business licenses of independent contractors
- Firm did not communicate with the State effectively due to cultural differences
- State ignored agency regulated, fixed-rate revenue based business model
A cargo container firm with 50 tractors was audited and found not to be in compliance due to record discrepancies per RCW 51.08.195 for their independent drivers. The revenue generated is regulated on a fixed pay-per-load basis by the Port of Seattle. The independent contractor licensing requirements were examined and the firm updated all record keeping and reporting requirements to comply with the law.
- Firm requested a review of the Application and independent contractor Agreements
- Compliance issues were examined for this pay-per-load fix price business
After evaluating the business model, a new Application and Agreement forms were provided for record keeping and reporting compliance.
“I was referred to Liberty Bay Consultants, LLC by my attorney to conduct an examination of my records during the audit conducted by the Department of Labor and Industries. Ted Carlson has shown incredible knowledge about how small businesses should relate to government audits. His evaluation of my business practice has allowed me to understand the process and how I was conducting my business to trigger an audit.
When the State returned my documents, Mr. Carlson placed them in a database to offset any sampling or generalization of my business practices and billings to the State. This information included treatment cards data, appointment fee slips, and corresponding LNI billings, many of which were recoded due to my submission errors by my staff. My attorney was so confident with Mr. Carlson’s database, he decided to request a meeting with the chief investigator to resolve any over billing issues during this audit.
I particularly liked that Mr. Carlson took the time to describe:
- Why I was being audited
- How I was conducting my business in a way that triggered the audit
- The required records to offset any erroneous findings by the State
- What the results of the audit should be
- And, how to prevent future audits by implementing better internal controls
I enjoyed the professionalism Mr. Carlson displayed and his willingness to encourage fine tuning of not only my clinic procedures but also comment on some of my other business interests outside of this examination. I am grateful for having met Mr. Carlson and know where to turn for any future direction!”
From Attorney Professionals
“I have worked with Liberty Bay Consultants on several cases defending small business from overbearing Washington state labor & industries audits.”
“In the fall of 2000, Mr. Carlson was retained by a client to research and analyze certain aspects of his business and report his finding to me. Mr. Carlson completed his tasks in a timely and professional manner. Additionally, Mr. Carlson’s insights were extraordinary in that they showed a measure of common sense which was particular benefit to my work.”
University of Puget Sound/Seattle University School of Law
As a Certified Fraud Examiner who has worked for the Fraud Prevention Audit Section in King County at the Department of Labor and Industries, Mr. Carlson has brought a wealth of experience to our firm to assist employers in dealing with the Department. His expertise in keeping the Department in compliance with its own regulations has been an invaluable resource to the firm.
Case in Point: A Subpoena was served by a Washington State investigation team on a doctor’s office claiming a Class B felony. Although the record keeping by the doctor was not in compliance, the examination conducted by Mr. Carlson opined no fraudulent intent by the doctor. The database produced by Mr. Carlson identified accounting and billings errors to the Department. The unusual aspect of this audit examination resulted in assessing prior business operations that resulted in the WIC Investigation, examining the evidence by compiling a forensic database, and implementing billing and internal procedures to correct the need for future audits.