(The Center Square) – Accuracy and timeliness of unemployment payments improvements have been recommended.
Wednesday, Division of Employment Security Assistant Secretary Antwon Keith and State Auditor Beth Wood are scheduled to appear in front of the Oversight Committee in the state House of Representatives. The recommendations were made by Wood and the U.S. Department of Labor.
“The pandemic highlighted flaws in the ability to make timely first-time payments and to ensure the right amount goes to the right person,” Rep. Jake Johnson, R-Polk, said in a statement. He’s co-chairman of the committee. “Federal pandemic unemployment benefits were particularly vulnerable to fraud and mistakes. North Carolinians need to know the unemployment system is fair, fast, and free of fraud.”
Presentations submitted to the committee by Keith and Wood highlight the data behind struggles during the pandemic to administer eight different unemployment benefit programs – three state and five federal – that involved 3.8 million claims between March 2020 and September 2021.
The federal programs significantly boosted maximum benefits from $350 a month to $950, while extending longevity from 12 weeks to 72. In total, the state paid out $14 billion in benefits to more than 1 million people over an 18-month period.
Wood’s presentation notes federal regulations required 87% of first-time payments to be made to claimants within 21 days. Only $2.2 million out of $3.6 million in first payments, or about 60%, met the requirement between April 4, 2020, and Sept. 4, 2021.
Of the $1.2 billion paid during the timeframe, $438 million or 36% of payments were late, with only two of eight programs meeting the federal requirement. A historical look at North Carolina’s unemployment program shows it’s a trend that dates back nine years prior to the pandemic, according to the auditor.
Other data from the state auditor highlights $166 million in improper payments beyond a federal limit of 10%. Improper payments over or under benefit amounts accounted for about 18% of payments between April 1, 2016, and March 31, 2021. The rate in 2020 was 15.3% and it was 15.8% in 2021.
Overpayments totaled more than $366 million, with $343 million or 94%, stemming from three primary issues: work search requirements, benefit year earnings, and separation information issues.
Keith’s presentation points to a series of fraud strategies implemented by the employment division after the pandemic. These include banking verification, enhanced claimant screens, an alert dashboard, and a “Benefits Integrity Alert Visualization Tool.”
Those changes led to 56,407 suspicious identity issues flagged in 2022 and 28,396 in 2023. The division also prevented $264 million in fraudulent payments in 2021, $142 million in 2022, and $68.5 million so far in 2023, the presentation shows.
Since April 1, 2020, the state has recovered a total of about $65 million in fraud and nonfraud money, which includes more than $36 million in claimant payments, the presentation shows.
Wednesday’s hearing is expected to delve into more details about specific recommendations for improvement from the state auditor and federal officials, and the employment security division’s implementation to date.
“It is good that both the state auditor and General Assembly can hold agencies accountable,” Rep. Harry Warren, R-Rowan, said in a statement. He’s also a committee co-chairman. “I look forward to working with her to ensure broad and deep oversight on behalf of taxpayers.”