• Tue. Sep 20th, 2022

Auditor: Louisiana Labor Commission Failed to Meet Federal Requirements | Louisiana

ByChad J. Johnson

Jun 14, 2022

(The Center Square) — The Louisiana Workforce Commission failed to meet federal unemployment requirements and left billions in benefits vulnerable to fraud in 2021, state auditors say.

“For the second year in a row, LWC lacked adequate internal controls and failed to comply with the requirements of the federal unemployment insurance program. LWC has paid more than $5.6 billion in benefit payments to more than 619,000 claimants in fiscal year 2021,” according to a Louisiana legislative auditor report released last week.

“Due to the significant funding provided during the COVID-19 pandemic and the lack of ID or salary requirements at the start of the year, these programs have been exposed to spoofing schemes. identity and fraud,” the report said.

Auditors tested a random sample of 138 claimants who received more than $1.3 million in unemployment benefits in fiscal year 2021 and found disputed costs totaling $257,728. About 10% of claimants tested had inconsistent or missing information on their unemployment claims. Thirty-three percent of applicants tested who received Pandemic Unemployment Assistance also did not provide proof of salary, as required by law, while others did not have proof of salary. identity required for the file.

The LWC also failed to properly withhold child support deductions from six of the 138 plaintiffs.

In addition, auditors found that the LWC did not administer the required federal re-employment services and eligibility assessment to determine whether claimants were in fact eligible for benefits.

“The March 2021 and June 2021 quarterly progress reports submitted by the LWC to the (U.S. Department of Labor) reported a combined total of 5,081 (60%) of the 8,428 identified participants who did not respond. or could not be contacted during the month they were identified for the program,” according to the report.

Since federal regulations require participation in RESEA as a condition of unemployment eligibility, LWC’s failure to act on missing information “could result in (unemployment) payments to claimants who are no longer eligible,” reports the ALL.

Other issues identified by auditors included inadequate controls over interstate billing and employer billing requirements, and failure to adequately track $50.6 million provided to 15 sub-recipients. .

The LWC report noted that the recent findings come on top of millions of potentially inappropriate payments made to deceased persons, overpayments and payments to ineligible state employees detailed in previous reports.

LWC Secretary Ava Cates responded to the findings of the LLA report last month, citing “an unprecedented workload” associated with the implementation of six new unemployment programs within weeks.

“States were given little time and insufficient guidance to implement these programs, while managing a record increase in claims volume, which our existing system and staff resources were not equipped to handle,” said writes Cates.

The LWC agreed with some of the report’s findings and disputed others, and outlined a series of steps the agency is taking to address the issues and retroactively comply with federal regulations.

The LLA report and LWC’s detailed response are available online.