Be Smart About Safety (BSAS)

WORKING SMARTER: A CASE STUDY ON ADMINISTRATIVE EFFICIENCY AT THE UNIVERSITY OF CALIFORNIA

October 1, 2010

B A C K  G R O U N D

The University’s complexity produces a wide range of liability –workers’ compensation, general liability, property, auto, etc. – that costs millions every year. The funding required to cover these liabilities is referred to as the “Cost of Risk”. Every dollar we spend on the Cost of Risk is a dollar taken away from our primary mission. Studies have shown that when dealing with these liabilities, the saying “an ounce of prevention is worth a pound of cure” has never been truer.

G O A L

The goal is to make environments safer for faculty, staff, students, guests, and patients. This could be accomplished through a systemwide program that allows campuses andmedical centers to proactively invest in loss-prevention and loss-mitigation programs specific to their unique needs. Such a program should allow the Office of the President (UCOP) to track results and share them with actuaries and insurance underwriters, thereby reducing Cost of Risk through decreased insurance premiums and claim payments.

S U C C E S S E S

The systemwide Be Smart About Safety (BSAS) program was developed to address this goal. Through BSAS, UCOP budgets a small amount of its total budget allocation to fund proactive loss-prevention and loss-control projects at campuses and medical centers. This funding is intended for projects specific to the purpose of reducing the frequency and/or severity of potential loss in the areas of workers' compensation, automobile liability and physical damage, employment practices liability, general liability, and property. BSAS funds cannot be used for expenses such as general operating supplies, personal protective and safety equipment required by law or regulation, or travel expenses.  BSAS funds may potentially be used for deferred maintenance corrections and capital improvement projects if the predominant purpose of the correction or improvement is to address an issue of life safety and loss prevention and/or loss mitigation.

C H A L L E N G E S

During times of tight budget constraints and limited resources, it is difficult to find the funding to produce new lossprevention and loss-mitigation programs.  Limited travel expense exceptions for “Train-the-Trainer” safety education.

I N I T I A L  I N V E S TME N T

The BSAS inaugural year was limited to a workers’ compensation program. The initial investment consisted of a systemwide 10% workers’ compensation accrual surcharge which equated to $0.12 per $100 payroll, or $11.2 million.

F I S C A L  RE S U L T S , CU R R E N T  AN D  AN T I C I P A T E D

The University’s actuaries have determined that the return on investment for approved programs ranges from 10% to 200%. In the workers’ compensation program, systemwide annual new losses have decreased from 7,097 in Fiscal Year 2005-2006 to 5,057 in Fiscal Year 2009-2010. Furthermore, the systemwide accrual rate decreased from $1.51 per $100 payroll in Fiscal Year 2005-2006 to $1.07 per $100 payroll for Fiscal Year 2009-2010. This amounts to an annual reduction in funding for liability coverage of over $22 million.

C U R R E N T  AC T I O N S  A N D  NE X T  S T E P S

UCOP continues to promote increased BSAS participation across the UC system. Hence, the steps to apply for BSAS funding are easy:

1. Complete the “University of California Be Smart About Safety Funding Application”, which can be found at www.ucop.edu/riskmgt/bsas/documents/fundingapp.pdf Depending on the area of risk the proposal addresses, the application must be reviewed and approved by Environment, Health & Safety, workers’ compensation manager and/or risk management at your location. You must also obtain approval of the head of your administration and finance department, and also comply with any local?specific requirements that may be in place.

2. Submit your locally approved application to the Office of the President. Send your approved application to:

UCOP Risk Services
Attn: Kevin Confetti
1111 Franklin Street, 10th Floor
Oakland, CA 94607

3. UCOP Risk Services reviews the application for appropriateness. Risk Services will send written approval or denial of the application and transfer any corresponding funding. Proposals that are solidly based on statistical loss history or a defensible risk assessment (including mitigation of risks, an analysis of claims, or a hazard vulnerability study) receive priority when being considered for funding.

C O N C L U D I N G  S T A T EME N T

BSAS is proof that investments in loss prevention and loss mitigation can yield very favorable returns when dealing with the University’s unique liabilities. It  has not only decreased Cost of Risk, allowing us to direct more funds to our core mission; it also makes campus and medical center environments safer for all.