The Kansas Legislative Division of Post Audit says the state’s Department of Labor paid out nearly $3 billion in COVID-related unemployment benefits from January 2020 through this past February. It also says around $700 million of that total went out when it shouldn’t have.
Post Audit says the $700 million in fraudulent claims was broken down almost evenly between state and federal funds. Both Post Audit and the Labor Department say Labor was working with an “outdated, piecemeal and poorly maintained” computer system, making it hard for Labor to implement new programs and policies from the federal government. Post Audit Principal Auditor Matt Etzel explains:
Upgrades during the pandemic also created system errors and processing delays. In addition, Labor was woefully understaffed for the better than 20-fold increase in initial jobless claims from February to March 2020, which clogged the system for months.
The Labor Department contested part of the report, saying around $300 million in claims should not have been included as fraud. Both agencies say the Labor Department stopped about $2 billion in fraudulent payouts.
Post Audit’s report Monday is its second on the issue of total and fraudulent benefit payments from the Labor Department, focusing on the issues behind the department’s response after the first report zeroed in on the fraud schemes, specifically with the federal Pandemic Unemployment Assistance program. The first report indicated as much as $600 million in fraudulent payments went out last year. Post Audit is not making any significant recommendations for changes at the Labor Department, saying mainframe modernization efforts are currently underway.
Click here for Post Audit’s first report.
Click here for Post Audit’s second report.
