TOPEKA, Kan. (KSNW) – Governor Laura Kelly is ordering an external audit on the Kansas Department of Labor, following the reports from state auditors.
State auditors with the Kansas Legislative Division of Post Audit (LPA) met with the lawmakers Wednesday morning to review their released estimates on unemployment insurance fraud in the state.
The new numbers show the amount of unemployment fraud could be more than double what the state predicts, predicting $600 million in fraudulent claims paid out in 2020.
However, the state’s labor department released a report on Tuesday, estimating $290 million in fraud payments. On Wednesday, the department issued a press release, demanding the auditors retract the report.
“LPA’s estimate of $600 million in potential fraud is seriously flawed, and should be withdrawn.”
Kansas Department of Labor
State auditors estimate that of the $600 million in fraud payments, $200 million was lost in state funds and $400 million were lost in federal funds.
The governor noted that she’ll be requesting an additional audit during a press conference Wednesday.
The audit is now stirring controversy among lawmakers. Some say updates to the state’s outdated computer system would have helped the state’s labor department field fraud, and that the state should focus on a solution moving forward.
“We would’ve been better prepared to address the fraud, had we had a system in place that was already modernized, so we can just do the plug and play,” said Rep. Tom Burroughs, D-Kansas City.
Rep. Burroughs is one of the lawmakers in the Legislative Post Audit Committee that met with the LPA and the state’s labor department Wednesday. He said he was disappointed that other committee members failed to conduct an informative hearing, and said that they used the time to interrogate the department.
Other lawmakers have pushed for answers on fraud, demanding more oversight of the department. They say fraud is not the only problem, and that they’re tired of the excuses.
Kansas Legislative Post Audit Committee chair Rep. Kristey Williams, R-Augusta told Kansas’ Capitol Bureau that other issues with the department need to be fixed more immediately.
Williams pointed to the long wait times on phone lines for claimants, which have caused many to vent their frustration to lawmakers.
“We have people contacting us everyday in the legislature, dozens everyday that will say I’m calling all day long, and they cannot get through,” Rep. Williams said. “Something’s wrong, and it’s not just the fraud. It’s the whole department of labor.”
The LPA will be releasing part 2 of their audit soon, where officials said they’ll have a more precise number in the number of fraudulent claims paid out. However, they believe that number would still be more than the state labor department’s estimates.
