NewsCovering Kentucky


Audit: Good intentions led to bad unemployment insurance results

Posted at 6:32 PM, Feb 23, 2021
and last updated 2021-02-23 18:32:52-05

FRANKFORT, Ky. (LEX 18) — Good intentions, bad results. That's how Kentucky Auditor Mike Harmon describes the decisions made by leaders in the Office of Unemployment Insurance.

In the Statewide Single Audit of Kentucky, Harmon outlines problems with OUI and the Unemployment Insurance fund as "deeply concerning to taxpayers and those who have filed for UI benefits."

On Tuesday, Harmon testified before the Senate Economic Development, Tourism and Labor Committee. He said OUI leadership made changes that violated federal law and "sacrificed program integrity" in an attempt to get payments to unemployed residents more quickly.

He says the decision to implement an "auto-pay" policy allowed people to get their money sooner, but it allowed UI benefits to be automatically paid without requiring people to report their weekly wage information. That information is typically needed to determine if someone actually qualifies for benefits that week.

"I'm sure, as I said, it's probably well-intended - to get checks out to people that wanted it," said Harmon. "But what it did is create an environment for potentially more fraud. It also put us in a situation where questions were not asked, specifically regarding income - other income."

An example of the problem created by auto-pay is over-payment. Harmon said his office found that among a sample of 37 state employees who filed for and received unemployment payments, 16 of them received UI benefits for the loss of part-time jobs while still working full-time for the state.

The net overpayment in this sample was more than $116,000.

Despite the decisions made by OUI officials in an attempt to pay benefits more quickly, many claims still were not timely processed. Harmon said his office found that OUI archived 400,000 emails it received from the public through its unemployment insurance assistance email portal, which remained unread as of Nov. 9

"Certainly, they faced tremendous challenges. But you know, it's been well over a year and eventually, you just got to figure it out. We owe them. We owe that to the great citizens of this commonwealth who have suffered so long and so much during this pandemic," said Harmon.