A new report by Kentucky Auditor Mike Harmon said employees within the Office of Unemployment Insurance were able to access and view their own jobless claims and those findings have been turned over to the Kentucky Attorney General’s Office.
Harmon issued an adverse opinion on Kentucky’s compliance with federal unemployment insurance program requirements. An adverse opinion is the worst opinion that can be issued for an audit.
The latest report listed 21 findings, with eight findings dealing with the unemployment insurance system. There were five findings dealing with the unemployment office released in February.
One of the new findings deals with employees within the unemployment office accessing their own UI claims, despite receiving training not to do so.
Harmon said the audit also found that 37 state employees filed for and received UI benefits, with 16 of those getting UI benefits for the loss of part-time jobs despite being employed full-time by the Commonwealth.
Last week, the Lexington Herald-Leader reported 19 state workers received over $54,000 in state and federal jobless benefits during April and May of last year.
In the latest audit report, it was determined that 10 workers in the UI office who had abilities to make changes in the UI system had accessed their own claims.
Harmon said his office could not find direct evidence on whether the employees made changes to their own claims. However, he added the seriousness of what was found is why his office is making a formal request for the Attorney General’s office to review the finding.
The audit also questions the $665 million paid out in unemployment insurance benefits by the state during the entire 2020 fiscal year. He said the decision to implement an auto-pay system failed to ask key eligibility questions before issuing UI payments.
Harmon’s office isn’t saying the entire $665 million was wrongly paid, but there were no controls in place to properly determine and certified UI claimants’ eligibility, which is a violation of federal law.
Harmon said his office still can’t determine the exact amount that was either overpaid or still owed to UI claimants.
Harmon’s findings and adverse opinion are the latest in what has been characterized as a series of missteps the state has taken with its unemployment system.
Muncie McNamara was hired by Gov. Andy Beshear’s administration in January of last year to run the Office of Unemployment Insurance without any prior experience in the field.
Three months later, COVID-19 struck the nation and caused a rush of unemployment claims when Beshear enacted several executive orders that shut down businesses and cost people their jobs.
When payments did not make their way to Kentuckians due to an outdated computer system and other issues, McNamara was fired in May. He later testified before a state legislature joint committee and said decisions made by the Beshear administration contributed to the payment delays and violated federal law.
Last week, Beshear said he initiated the investigation into the UI workers receiving improper benefits and welcomed any prosecution into the individuals involved.
Last month, the state said less than 5-percent of outstanding 2020 jobless claims had yet to be paid.
