BDO Helps the City of Torrance Transform its Workers' Compensation Division

Background & Challenges

The City of Torrance, California, is the eighth largest city by population in Los Angeles County. Over the past three years, it has experienced high employee turnover and an increase in claims volume within its internal workers’ compensation division causing significant issues in how the city processed claims for its police, fire, public works, and administrative employees.

Workers’ compensation is a federal law that establishes cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job. The law provides one of the broadest coverages of employment and medical benefits in the nation and has strict compliance timeframes that are audited frequently by the government to ensure compliance. The City of Torrance’s staffing and operational challenges were putting the City at risk of incurring fines and penalties if the City did not pay benefits timely and accurately. 

Knowing the difficulties it was faced with, the City reached out to BDO to complete an assessment into how it could improve the operational structure and results of its workers’ compensation division. This assessment involved an end-to-end review of the current operating model for processing claims, inclusive of internal staffing needs, guidelines, and procedures used to adjudicate workers’ compensation. The assessment also reviewed the City’s use of vendors to assist with processing its claims with a comparison to industry-leading practices.


BDO’s claims advisory team utilized its experience helping organizations improve their workers’ compensation operations. Within two weeks of the engagement, the BDO team arrived onsite and began identifying pain points throughout the city’s internal claims processes, which included an assessment of the city’s spans of control and lack of documented guidelines for how employees should manage workers’ compensation claims. 

BDO made specific recommendations to the city and even stepped in as the temporary workers’ compensation claims manager for three months in order to lead the rollout and implementation of new workers’ compensation claims guidelines. Additionally, BDO documented internal processes with specific timeframes and governance for the city’s internal claims team and its third-party claims administrator.

Client Impact

Since approving and implementing the claims guidelines developed by BDO and having the firm serve as the interim workers’ compensation manager, the city of Torrance has reduced its open claims exposures by 25%. This reduction has resulted in over $1.8M in loss reserve reductions to date, which BDO presented to the city council, leading to their unanimous approval in extending the BDO engagement for an entire year.