ClayCoNews - Multiple Issues within Kentucky's Unemployment Insurance System Detailed in Statewide Single Audit of Kentucky / Problems Part of 25 Findings in Fiscal Year 2020 Audit - Auditor Mike Harmon

Multiple Issues within Kentucky's Unemployment Insurance System Detailed in Statewide Single Audit of Kentucky / Problems Part of 25 Findings in Fiscal Year 2020 Audit

FRANKFORT, KY – On Tuesday, February 9, 2021 Auditor Mike Harmon's office released the first volume of the Statewide Single Audit of Kentucky (SSWAK) for Fiscal Year 2020.  The SSWAK contains 25 findings, half of them dealing with problems identified within the Office of Unemployment Insurance (OUI) and the Unemployment Insurance (UI) fund.

"When we issued a qualified opinion on the UI fund as part of the Comprehensive Annual Financial Report, or CAFR, audit in December 2020, it was based on the fact the Commonwealth did not know how much money is still owed to Kentuckians who filed for unemployment benefits and the numerous internal control issues within OUI," said Auditor Harmon. "The SSWAK report details those and other issues within our unemployment insurance system, which should be deeply concerning to taxpayers and those who have filed for UI benefits."

The onset of the COVID-19 pandemic presented many challenges for state government, and particularly for OUI, as business closures led to thousands of Kentuckians becoming unemployed.  For example, there were 49,023 new unemployment claims filed during the week ending March 21, 2020 and an additional 113,149 new claims filed during the week ending March 28, 2020.  Also, three significant new unemployment insurance programs were created via the federal Coronavirus Aid, Relief and Economic Security Act (CARES):  Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC) and Federal Pandemic Unemployment Compensation (FPUC).

Among the issues auditors identified within OUI and the UI fund are:

"The majority of the findings involving OUI come back to one common issue, which is the decision to remove controls that provided better oversight on verification and payment of UI benefits," said Auditor Harmon. "It breaks my heart to think of those Kentuckians included in the 400,000 unopened emails who so desperately wanted their voices heard and yet were ignored.  The systemic failure of leadership on all levels not only violated federal law, but also let down many who needed relief. It also leaves others facing the prospect of repaying the government for miscalculated payments they received in good faith."

In addition to findings regarding OUI and the UI fund, Volume one of the SSWAK also contains findings and recommendations for issues auditors identified within other agencies including but not limited to the Kentucky Finance and Administration Cabinet, Commonwealth Office of Technology (COT), and the Kentucky Transportation Cabinet.

You can review the full SSWAK report, which includes responses from the various state agencies here.  Volume two of the SSWAK, which deals with Kentucky's compliance with federal grant requirements, will be released in April.

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The Auditor of Public Accounts ensures that public resources are protected, accurately valued, properly accounted for, and effectively employed to raise the quality of life of Kentuckians.

Call 1-800-KY-ALERT or visit our website to report suspected waste and abuse.

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