Audit: Too many payment errors in chief NC jobless program
North Carolina, fraud
https://apnews.com/article/business-north-carolina-government-and-politics-3f21d58f3c7032d495b68c2a1a9d8ded
RALEIGH, N.C. (AP) — There are too many monetary payment errors by North Carolina’s unemployment office for its chief jobless benefits program, according to a state auditor’s report released Wednesday.
The performance audit of the state Division of Employment Security examined the North Carolina Unemployment Insurance program from April 2016 through March 2021. Auditors also recommended actions by the division to improve payment accuracy.
The program claims are paid for with state unemployment taxes from employers and administered using federal funds.
The division scrutinizes intensely several hundred claims annually, with the results forwarded to the U.S. Labor Department. The samples estimate the accuracy of paid claims throughout the entire program.
While the program paid nearly $2.2 billion in claims during the entire period, an estimated $384 million in payments were considered improper, the report from State Auditor Beth Wood’s office said, either through issuing too much money to benefit applicants or too little.
That equates to an average improper payment rate of 17.6%, well above the division’s obligated limit of less than 10% of paid claims, according to the report. The program exceeded that mandated level in each of the years examined.
The result is the division incurred about $166 million in improper payments over and above the federal limit, Wood’s office said.
“Consequently, these public funds were not used for the intended purpose of providing financial assistance to unemployed North Carolinians in times of need,” Wood’s auditors wrote. Exceeding the rate doesn’t result in immediate penalties from the federal government.
The audit didn’t examine payments from federal pandemic unemployment programs run by the state but paid for entirely by the federal government. The pandemic-related programs cut the overwhelming number of displaced worker payments in 2020.
Wednesday’s findings aren’t surprising, given that the U.S. Labor Department already identified North Carolina’s program as “high-rate/high impact” due to its rate. In turn the state receives targeted assistance to reduce the rate.
Still, the review attributes nearly all of the overpayments to three points in the process of a displaced worker applying for and receiving weekly benefit payments.