Purpose

The objectives of our examination were to determine whether Unemployment Insurance (UI) benefit payments approved by the Department of Labor (Department) were appropriate and comply with applicable Federal and State laws and regulations and Department policies and procedures.  In addition, we performed data analytics to identify and facilitate the Department’s recovery of UI overpayments made to New York State (NYS) employees.

Background

We examined high risk payment requests approved by the Department during the period January 1, 2018 through December 31, 2018.  To accomplish our objectives, we used data analytics to examine current and historic payments and to identify and facilitate the recovery of previous overpayments due and owing to the Department from New York State employees.  We reviewed pertinent supporting documentation, such as Department of Taxation and Finance wage reporting information, employer payroll information and various information maintained in the Department’s mainframe applications. 

Key Findings

We identified 2,115 overpayments totaling $788,487, which included $55,423 in fraudulent claims, and underpayments totaling $48,728.  Based on the overpayments identified, the Department assessed $1,110,430 in penalties to claimants who made false statements or representations to obtain benefits to which they were not entitled.  Based on overpayments identified during current and past reporting periods, the Department offset $97,118 in forfeited benefits against UI payments during the current reporting period.  Auditors also worked with the Department to recover $370,264 in overpayments owed by State employees and identify an additional $336,845 in potential recoveries from State employees hired during 2018.

Key Recommendations.

1. Recoup outstanding overpayments and monetary assessments from claimants identified in this report, as appropriate.
2. Act immediately to determine appropriate steps to prevent reoccurrence when fraudulent payments or other significant issues are identified.
3. Meet timely with this Office to discuss the cause when significant findings are identified and steps taken to address them.
4. Work with this Office to identify and implement opportunities to detect and prevent erroneous, inappropriate or fraudulent UI benefit payments, as detailed above.