Louisiana News

Audit reveals ineligible Louisiana state employees paid $6M in unemployment benefits

(The Center Square) – The Louisiana legislative auditor has identified more than $6 million in unemployment benefits paid to ineligible state employees during the COVID-19 pandemic.

Louisiana Legislative Auditor Michael Waguespack issued a report to the Legislature last week that analyzed state and federal unemployment benefits paid out to ineligible state employees by the Louisiana Workforce Commission (LWC) throughout the pandemic.

“Overall, we found that, for the period of February 2, 2020, through July 24, 2021, LWC made approximately $6.1 million in state and federal unemployment benefit payments to 1,054 state employees who do not appear to have been eligible for these programs,” Waguespack wrote in a letter to legislative leaders. “While some of these employees may have been victims of identity theft, others appear to have received unemployment benefit payments for which they were ineligible.”

The report details LWC payments of $2.9 million in unemployment benefits to 566 state employees whose wages were not reported to the LaGov Enterprise Resource Plan system between March 2020 and March 2021, with about $2.1 million going to 371 of them. Another $3.1 million went to 488 state employees whose wages were reported directly to the LWC between March 2020 and July 2021 who were not eligible based on their state paychecks. About $1.8 million of the $3.1 million went to 235 employees.

“We conducted this audit because of the significant increase in costs and number of applicants for state and federal (unemployment insurance) during the COVID-19 pandemic, which according to data provided by LWC, totaled $9.83 billion in payments to 794,515 claimants from March 30, 2020, through July 31, 2021,” according to the report.

“Louisiana’s unemployment rate grew from 5.2% in February 2020 to 13.1% in April 2020, and the total number of state (unemployment) claims increased by more than 2,000%, from 16,798 on February 29, 2020, to 366,798 on April 25, 2020.”

The document noted the legislative auditor received numerous legislative requests to analyze the spending, and the report on state employees is the fifth in a series of reports on benefits paid during the pandemic.

Of the 488 employees whose wages were reported in the LaGov system, 200 were paid the highest amount of unemployment benefits, and 163 of those employees used the same bank account as they used for their bi-weekly state payroll. The 488 employees earned $4.4 million in addition to the $3.1 million in improper payments. Auditors identified 10 state employees in this category who may have been a victim of identity theft, resulting in $71,574 in improper payments, according to the report.

Auditors also found the 566 state employees whose earnings were not reported on the LaGov system earned $3.2 million in pay in addition to the $2.9 million in improper unemployment benefits between March 2020 and March 2021. The legislative auditor identified only 19 employees, accounting for $93,087 in benefits, that may have been victims of identity theft.

The legislative auditor recommended LWC obtain and analyze LaGov employment data and human resources records to verify eligibility, and to continue to investigate state employees who earned more in wages than the amount allowed to recoup the funds. The LWC gained access to the LaGov payroll system in September 2021, according to the report.

The LWC agreed with the audit recommendations, noting the new access to LaGov and the department’s referral of 18 public employees for prosecution.

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