IN A LARGE AND DIVERSE ORGANIZATION, the challenge of managing the various aspects of a risk management corrective action plan (CAP) process can be tremendous. For example, management teams in the County of Los Angeles face multiple challenges, ranging from cultural issues within the 39 departments to the complexity of the types of losses that the 100,000 employees, 12 million residents and tens of millions of annual visitors experience. In an organization whose exposures include road construction, HazMat response, firefighting, jail operations, medical care, transportation, children's services, recreation, beach safety, facility construction and maintenance, general administration and law enforcement, the types of losses that can occur are far-reaching and potentially substantial. The spectrum of job types---from clerk to truck driver, mechanic to neurosurgeon, sanitarian to psychiatrist, scientist to scuba diver, attorney to helicopter pilot, jailer to firefighter--- encompasses nearly every trade and profession, and reflects the complexity of county government.

Scope of the Corrective Action Plan Process

To understand the scope and depth of the CAP process, one must understand that root cause analysis and incident investigation in a large, diverse organization can yield a large magnitude of data. Competent staff must be available to interpret data and evaluate trends and causal factors in order to initiate the process. The process begins once an event occurs, is reported and is determined to have significant risk potential. The primary difference between corrective actions developed related to loss prevention issues and the CAP process is that in loss prevention, near-hits and incidents are evaluated and corrective action steps are developed to reduce or minimize the specific causal factors that resulted in the exposure. In the risk management CAP process, significant events and trends with potential for substantial liability or cost are the triggering mechanisms used to start the process. In the CAP process, events are analyzed based on organizational exposure, actual or potential cost (e.g., forecasted claim judgment or settlement cost), and probability of recurrence. In the County of Los Angeles, one resource available to help departments develop, implement and management the CAP process is the Chief Administrative Office (CAO) Risk Management Inspector General (RMIG). The RMIG function was created to work with CAO loss control and prevention staff, departmental managers, county attorneys, other public agencies within the county and the public to analyze exposures; help draft and review departmental CAPs; monitor selected CAPs for closure and effectiveness; and report progress to executive management. The risk management loss types that affect the county range from workers' compensation through general liability, vehicle liability and medical malpractice losses (Table 1). Each loss has a unique set of causes and requires event-specific corrective actions to prevent recurrence. The financial impact of these types of losses and the volume of claims are significant. Total loss-related expenses for the county in FY 2005–06 were $329 million (14% lower than in FY 2003–04); 14,791 claims were filed during the same period (8% lower than in FY 2003–04). These factors, coupled with the public concern for fiscal responsibility, emphasize the importance of the CAP process.

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