State Auditor Mike Harmon on Wednesday said laws might have been broken by full-time state employees who claimed jobless benefits during the COVID-19 pandemic last year and who used their official access to the state’s unemployment insurance system to check on their own accounts.
Harmon’s findings follow last week’s publication, in the Herald-Leader, of a similar state inspector general’s report that was presented to Gov. Andy Beshear. That report said that at least 19 state workers at the Kentucky Education and Workforce Development Cabinet improperly collected $54,232 in state and federal unemployment benefits.
On Monday, the Franklin County commonwealth’s attorney said he will review the episode for possible prosecution once he has a copy of the inspector general’s investigative file.
Overall, 37 state workers collected $116,978 in state and federal jobless benefits, according to the audit report that Harmon released Wednesday. More specifically, 10 of those workers were employed by the Office of Unemployment Insurance and improperly accessed their own accounts, according to Harmon’s report.
Harmon said he will refer this finding to Attorney General Daniel Cameron for possible prosecution.
“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,” Harmon said in a prepared statement.
In a previous audit, Harmon added, his office found more than 400,000 unread emails from Kentuckians seeking help from state unemployment insurance officials.
In a written response to Harmon’s audit, the state government said the Office of Unemployment Insurance was transferred after the episode from the Education and Workforce Development Cabinet to the Labor Cabinet, and new safeguards are being put into place.
Lt. Gov. Jacqueline Coleman serves as secretary of the Education and Workforce Development Cabinet.
“The cabinet will issue and implement a security policy, directing employees that they are not to access case information pertaining to their own claim, or that of a family or friend,” the Labor Cabinet wrote in its reply. “Employees will be required to complete a security training by the end of the fiscal year and annually thereafter to ensure they are educated as to their responsibilities with regard to UI information security.”
Harmon’s report does not identify any of the state workers or explain how full-time employees managed to obtain jobless benefits.
In her Feb. 19 report for the governor, Inspector General Maryellen Mynear said state workers filed for jobless benefits based on the alleged pandemic-related loss of part-time jobs that sometimes did not exist and other times did exist but were not truly lost, Mynear wrote. However, the jobless benefits tended to reflect their much larger full-time state government wages, not the part-time wages, she wrote.
For example, a female state employee claimed she lost her part-time job as a choir assistant at her church. But the church, in fact, received a federal Paycheck Protection Program loan and kept everyone on its payroll. And a male state employee claimed he lost his part-time gig as a basketball coach. But in truth, his league’s basketball season ended before the pandemic struck, and he already had received his stipend for the year.
In a separate part of his audit report on Wednesday, Harmon questioned $655 million in state and federal jobless benefits that Kentucky awarded under the Beshear Administration’s “auto-pay” policy, which rushed initial benefits to claimants without the usual eligibility determination.
According to Harmon’s report, $17 million was paid in traditional unemployment insurance benefits without claimants reporting their wages; $129 million was paid in federal Pandemic Unemployment Assistance without claimants reporting their wages or certifying that they lost their jobs due to the pandemic; and $507 million was paid in Federal Pandemic Unemployment Compensation without claimants having the ability to certify wage information.
“We aren’t saying the entire $655 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.”