How often must each audit be conducted at minimum?

• A. Every 2 years
• B. Every 3 years
• C. Every 5 years
• D. Every 7 years

Answer: (C)

Audits of a California Self-Insurance Plan are required at least every five years. This cadence provides independent verification of the plan’s financial statements, confirms that reserves are adequate to cover future obligations, and demonstrates ongoing solvency to regulators and stakeholders. The five-year minimum strikes a balance between ensuring proper oversight and avoiding excessive administrative burden. If risk signals or changes in the plan occur, audits can be done more often, but seven years would delay detection of potential financial issues, and two or three years would add unnecessary cost relative to the level of risk.