Auditor: Dozens of full-time state employees pocketed more than $100,000


FRANKFORT, Ky. (WTVQ)The state auditor said dozens of full-time state employees pocketed more than $100,000 in unemployment benefits they may not have been eligible to receive.

According to an audit report released Wednesday, Mike Harmon said he found 37 state workers collected $116.978 in state and federal jobless benefits.

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Of those workers he said 10 of those workers were employed by the office of unemployment insurance.

The report said those workers were able to access the state’s unemployment insurance system to check on their own accounts.

The audit had similar findings to another report by the state inspector general.

Harmon said he is turning his findings over to the attorney general, could could file charges.

Kentucky spent over $17.5 billion in cash and noncash awards received from the federal government in Fiscal Year 2020, which is an increase of $4.7 billion compared to federal funds spent by the Commonwealth during Fiscal Year 2019.

The 2020 SSWAK Volume II identifies $670.7 million in questioned costs, including the $665 million in unemployment insurance benefits paid out by the Commonwealth during Fiscal Year 2020.

The Fiscal Year 2020 audit contains 21 findings, which include five repeat findings from the Volume Two SSWAK audit for Fiscal Year 2019, and five findings carried forward from the Volume One SSWAK audit for Fiscal Year 2020.

All five of the findings carried forward from the Fiscal Year 2020 audit deal with issues identified within Kentucky’s UI system, and the Office of Unemployment Insurance.

“While thousands of Kentuckians tried to call or email seeking help about their own claims to no avail, employees within OUI could freely check and possibly even make changes to remove stops on their own claims. Given the more than 400,000 unread emails we learned of previously, this finding only adds to the frustration of those who have waited months for assistance,” Auditor Harmon said.

The Office of Unemployment Insurance suspended collections as part of the Treasury Offset Program without permission.

States are required to collect unemployment compensation debts that remain uncollected one year after the debt is due through the U.S. Bureau of Fiscal Service’s Treasury Offset Program, or TOP.

Without obtaining permission from the U.S. Department of Labor, OUI suspended TOP collections on April 6, 2020, and had not resumed as of February 17, 2021.

In May 2020, the Commonwealth received word from the U.S. Department of Labor that TOP collections could not be suspended.

Again, in February 2021, a follow-up email from the U.S. Department of Labor reiterated that states are not to suspend participation in TOP.

It is unknown how much Kentucky would have recovered if TOP participation had not been suspended.

Nationwide, in federal fiscal year 2020, TOP recovered $226.9 million for states that participated in the unemployment insurance program.

You can review the Volume Two SSWAK report here.  Volume one of the SSWAK, which Auditor Harmon’s office released in February, can be viewed here.