Kentucky auditor sends OUI employee investigation to attorney general

(The Center Square) – Kentucky Auditor Mike Harmon has referred a finding to Attorney General Daniel Cameron that at least 10 workers within the Office of Unemployment Insurance who had the authority to make changes to claims in the system used that ability to view their own claims, even though they were trained not to do that.

That finding was one of 21 overall in the second volume of Kentucky’s Statewide Single Audit, which Harmon released Wednesday. Of the 21 findings, eight were related to the beleaguered unemployment program that has faced repeated scrutiny during the COVID-19 pandemic.

“While thousands of Kentuckians tried to call or email seeking help about their own claims to no avail, employees within OUI could freely check and possibly even make changes to remove stops on their own claims,” Harmon said in a statement. “Given the more than 400,000 unread emails we learned of previously, this finding only adds to the frustration of those who have waited months for assistance.”

Harmon, a Republican, noted in the first volume of the audit, released in February, that 37 state workers received unemployment payments, with some of those individuals filing claims for lost part-time work even though they were still on the state’s payroll. A deeper dive into those claims found the OUI issue, which the auditor’s office called “a significant internal risk.”

The revelation comes a week after the Kentucky Education and Workforce Development Cabinet released a report from its inspector general that found at least 19 state workers filed claims, with some of those individuals having access to them. In some instances, state OUI workers overrode rejections and helped process claims.

Michael Goins, communications director for the auditor’s office, told The Center Square that auditors don’t know for certain if there is any overlap between the audit and the inspector general’s report.

Besides the missing emails and OUI workers accessing claims, Harmon has also raised concerns about the state paying claims without verifying eligibility and suspending collection of overpayments. Those and other issues led Harmon to issue an adverse opinion, the lowest possible, on the state’s unemployment program’s ability to meet federal requirements.

“It is extremely rare for an adverse opinion to be issued on an audit,” he added. “As our previous report detailed, there was a systemic failure of leadership that sacrificed program integrity in the early weeks of the pandemic in an effort to pay claims more quickly. It is a case of good intentions leading to very bad results.”

Speaking to reporters Thursday, Gov. Andy Beshear said the unemployment items in the audit had been disclosed previously or already rectified.

“I believe that we either have addressed or we are aggressively addressing the issues that are raised in it,” he said.

The governor, a Democrat, again noted the unemployment system he inherited was one that was cut deeply by the Bevin Administration before him, with 80 fewer workers available to process claims. The computer system used is also in need of upgrades.

Beshear added the Republican-led legislature also cut $18 million from the budget.

“You can’t do this and have a sustainable UI office that’s going to be able to address a sharp spike in claims,” the governor said.

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