State auditor to review Washington’s unemployment system after wave of fraudulent claims
The state auditor on Wednesday announced a review of the state’s Unemployment Insurance system following fraudulent filings that swarmed the system amid already elevated claims filed as a result of the COVID-19 pandemic.
According to an announcement Wednesday, the audit will focus on “two special examinations of the significant fraud and loss of public funds at the state Employment Security Department.”
“Everyone recognizes these problems came at the worst possible time, when the need for essential unemployment benefits was unprecedented,” Auditor Pat McCarthy said in Wednesday’s announcement. “Our role at the State Auditor’s Office is to conduct independent reviews, and I have directed my staff to look in areas that will provide the public and state leaders with a greater understanding of how needed benefits were stolen and delayed.”
According to Wednesday’s statement, one of the reviews will be a performance audit, which will examine factors that led to delayed and improper payments for unemployment benefits. The second will be an information technology audit, which will look for potential weaknesses in the program’s computer systems.
Regular audit work is underway now at ESD, including the annual audit of federal funding.
Employment Security Department estimates that more than $500 million in fraudulent claims were paid out, of which $333 million has been recovered.
As a result of the fraud, ESD has implemented stricter vetting of claims, bringing an already slow process at times to a standstill for many claimants.
The department set a goal in May of clearing out 57,125 claims that were in adjudication as of May 1.
As of June 8, 35,400 claims were still in adjudication.
“I know the Employment Security Department is working hard to deliver benefits to people who need them, help law enforcement track down the criminals who stole funds and recover lost funds,” McCarthy said. “Beyond the immediate crisis, however, there are clearly lessons to be learned, and we intend to bring them to light.”
ESD Commissioner Suzi LeVine, in a statement issued on Wednesday, said: “We welcome this opportunity — both in the spirit of continuous improvement and, most importantly, in our primary charge to provide ever better service to the people of Washington.
“We believe that the key learnings from this audit will help not just ESD, but all of state government. Our goal in this unprecedented crisis has been and continues to be getting benefits out to eligible Washingtonians as quickly as possible.”
She added, “We look forward to working with Auditor McCarthy and her team to accelerate the work that will meet that goal.”
This story was originally published June 10, 2020 at 3:46 PM.
