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Kentucky Auditor: 'At least 10' OUI employees had access to own claims

Posted at 11:06 PM, Apr 21, 2021

(LEX 18) — Kentucky Auditor Mike Harmon said that at least ten employees in the Office of Unemployment Insurance had accessed their own unemployment claims in the system last spring.

Harmon said the finding, which was one of many included in a report released Wednesday, will be referred to the Office of the Attorney General for further investigation.

The report represented the second volume of the Statewide Single Audit of Kentucky. The first volume was released in February.

This audit identified $670.7 million in questioned costs, including the $665 million in unemployment insurance benefits paid out by the state in Fiscal Year 2020.

Harmon said the $665 million stemmed from the OUI's decision to implement an "auto-pay system," which he said "failed to ask key eligibility questions before issuing UI payments."

"We aren't saying the entire $665 million was wrongly paid, only that there were no controls in place to properly determine and certify claimants' eligibility, which is a violation of federal law," Harmon said. "At this point, auditors could not precisely determine the exact amount that was either overpaid or still owed to claimants."

The report also found that 37 state employees had filed for and received unemployment insurance payments. It claimed that some of those employees filed for the loss of part-time jobs despite still retaining their full-time positions in state government.

Additional reviews found that "at least 10 employees of OUI, who had the ability to make changes in the system, had accessed their own UI claims with the system."

Harmon said his office was not able to determine if those employees made changes to their claims, but in a press release, he noted that they accessed their claims "despite receiving training that instructed them not to do so."

Holly Neal, a spokesperson for the Labor Cabinet, issued the following statement in response to the report:

"Nearly all the information in the Auditor’s new report has been previously disclosed by the administration, reported on and even resolved. A majority of the findings were based on OUI acting on initial information from the federal government that was later reversed. One finding even relates to the unemployment insurance employee investigation that the Governor and Lt. Governor called for and acted upon immediately once the results were clear.

As for the collections program, the cabinet paused the program in order to not penalize Kentuckians during a pandemic. The pause was necessary until the legislature agreed to waive overpayments. We are coordinating the resumption of the program along with the state’s overpayment waiver program, which was just authorized after legislation passed during the 2021 legislative session, that will assist Kentuckians who were overpaid at no fault of their own."