Audit finds possible staff overpayments at Louisiana Workforce Commission

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BATON ROUGE, La. (WDSU) – A recent audit questions whether the Louisiana Workforce Commission overpaid some of its employees who worked from home during the early weeks of the COVID-19 pandemic. The agency’s leader disagrees, noting her team worked well beyond normal work hours to process historic levels of unemployment claims during that time.

In a report released Monday, the Louisiana Legislative Auditor said the LWC’s use of special leave was not in accordance with state civil service rules and may have resulted in improper compensation totaling $768,000. From March 26, 2020, through April 14, 2020, the LWC paid employees special leave and “straight time overtime” for the hours actually worked, according to the report.

The audit found that one employee who worked 50 hours in a workweek received 95 hours of total compensation.

Workers who could not work or come into the office should have been paid the special leave, and those who could should have been paid their regular salary plus time and a half for overtime beyond 40 hours in a work week, the legislative auditor said.

LWC Secretary Ava Cates “unequivocally disagrees” with the finding, based on her response to the audit. She said the employees were properly paid for “working as first responders during a declared state of emergency,” adding that her staff handled more than 60 times the normal number of unemployment claims during the first week of April 2020.

“… LWC executed an ‘all hands on deck’ approach to train staff in various departments through the agency to handle the claims, all while continuing to perform their particular duties,” Cates said in her response. “LWC employees undoubtedly acquired an enormous amount of additional responsibility and were compensated accordingly.”

The Legislative Auditor said improper compensation could also result in disallowed costs from improper charges to the federal programs that have covered supplemental unemployment benefits during the pandemic.

The audit also found inconsistent or incomplete information on applications for pandemic assistance, which could indicate the claimant received benefits they weren’t entitled to receive or the possibility of identity theft.

A random sample of 138 claimants were tested in the audit, and 27% were found to have questionable applications, such as job histories that didn’t match the LWC’s database or conflicting personal contact information. The LWC has since flagged 23 of the claimants from the sample for investigation or to provide proof of identity.

In response, Cates concurred in part with the audit’s findings on internal controls. She agreed that they should be put in place before implementing an unemployment benefits program, saying that they would have been planned and tested if the agency were given adequate time, guidance and resources to do so.

From early 2020 into this year, Cates explained the LWC has administered unemployment benefits payments from: five separate programs linked to the pandemic; four disaster unemployment programs that followed hurricanes and a winter storm; and three existing assistance programs in place before COVID-19.

“States were given little time and insufficient guidance to get these programs implemented, while also managing a record-breaking surge in claim volume, for which our existing resources were not equipped to handle,” she said.

Another finding from the Legislative Auditor involved inaccurate financial reporting. The review found revenue and amounts due from the federal government were understated by $65.2 million because the LWC did not properly accrue them.

Another $46.5 million in unemployment insurance benefits was understated for the same reason, and cash totaling $17.7 million was left off the agency’s general ledger through errors and omission.

As a result, the audit said the balance of the state’s unemployment trust fund was inaccurate.

The LWC partially concurred with the finding, explaining that the errors were from reports compiled after submission of the unemployment trust fund financial report.

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