Audit: More than $ 400 million in unemployment was not paid on time

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RALEIGH, NC (WNCN) – North Carolina failed to pay more than $ 400 million in unemployment benefits on time during the COVID-19 pandemic, according to a new report released Monday.

State Auditor Beth Wood (D) found that the Employment Security Division was not prepared for the massive rise in unemployment claims that began in March 2020, and did not sufficiently monitor whether payments were being made as quickly as expected.

“It was a twist that everyone had to make quickly,” Wood said in an interview Monday. “(People) couldn’t pay their bills. They could not buy food. They could not pay the mortgage. That’s why it was very important that the reaction time was very fast. “

She added that although the pandemic had led to an unprecedented surge in applications for unemployment benefits, the agency was not properly prepared to increase demand for services after the Great Recession just over a decade ago.

“No one could see the arrival of the pandemic. Nobody. But they were not preparing for the next economic downturn, ”Wood said. “There was no plan. So it’s pretty chaotic in advance. “

“You needed to be better prepared on the front, and you didn’t need to run the shop during the crisis.”

Wood found that the state did not issue about $ 438 million on time. She noted that federal requirements provide for at least 87 percent of payments within 14-21 days of filing a claim. In addition, Wood found that DES did not meet the timeliness requirements of the past 10 years due to how the agency developed the grievance process.

The audit covered the period from January 1, 2020 to March 31, 2021.

“The system they built to streamline was not even developed in time,” she said. “Someone has to head this agency or this department if you want a more timely response to the needs of the unemployed in North Carolina.”

As Governor Roy Cooper (D) issued orders to close various businesses, the state’s unemployment rate jumped to 14.2 percent in April 2020. On Monday, the Ministry of Commerce said it was down to 3.9 percent as of January 2022.

The Employment Security Department on Monday denied our request for an interview based on the auditor’s results.

In a response accompanying Wood’s report, the agency said it was in line with its findings.

DES noted that in 2020, the state noticed an “exponential increase in unemployment claims,” and the agency took steps such as hiring additional staff and contractors to try to respond to unprecedented demand.

The agency also noted that the federal government has continued to add new unemployment programs that require additional federal instruction and personnel to implement.

DES also said it was working on a “post-pandemic strategic plan” that included: rapid adaptation and staff training, rapid expansion of the call center, expansion of rapid fraud detection and prevention, and technological and monitoring solutions.

A few weeks after the initial surge in unemployment applications, Governor Cooper also changed the head of the agency, nominating former State MP Pryor Gibson to run DES.

Jenny Propst of Charlotte was among thousands of people who filed claims in the early days of the pandemic. She works in the entertainment industry and ended up without a job for over a year.

She waited a few weeks to get her payments, and was increasingly worried about how she would pay the bills.

“It was a disaster. It was a nightmare. It was a month of sleepless nights, ”she said. “It’s been such a difficult and horrible time in my life that I don’t want to go through it again.”

She remains concerned that she and her colleagues may once again face problems with the unemployment system during the next economic downturn.

“I don’t really believe that next time things will get better. We know it will happen again, ”she said.

Asked if she believes DES is ready for future demand growth, Wood said she is unsure.

“I have no idea. I think they are still trying to dig it out, ”she said. “So I can’t tell you if they’re ready or not.”



Audit: More than $ 400 million in unemployment was not paid on time

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