Report: Kentucky state workers gamed system for unemployment benefits during pandemic

But just as many Kentuckians were getting assistance, a report surfaced with scathing details alleging fraud from within the unemployment office.
Published: Apr. 15, 2021 at 2:25 PM EDT
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FRANKFORT, Ky. (WKYT) - For the first time in about four years, several regional unemployment offices in Kentucky reopened for in-person appointments. This comes as thousands have reported issues with getting in touch with someone to help them with their claim.

But, new details from a recent report allege some who were tasked with handling unemployment claims early on in the pandemic were actually processing their own fraudulent claims.

For a year, we’ve told you stories about Kentuckians who lost their jobs during the pandemic, and the battle to get unemployment benefits.

“I need this money,” Tabitha Barret said. “I got bills that I have to pay for.”

“When I call there is a message that I would be put in a queue,” Glenda Smith said.

Thursday marked a turning of the tide as in-person appointments at regional offices across the state resumed, and many were able to get help they have longed for.

“They told me I should get paid this weekend,” James Rowe said.

But just as many Kentuckians were getting assistance, a report surfaced with scathing details alleging fraud from within the unemployment office.

Our partners at the Lexington Herald-Leader cited a report from the inspector general claiming at least 19 state workers at the Kentucky Education and Workforce Development Cabinet collected more than $54,000 in state and federal unemployment benefits in April and May of 2020. Many of them were working at the Office of Unemployment Insurance or the Unemployment Insurance Commission where they helped process pandemic-related jobless claims.

“It’s unacceptable,” Gov. Andy Beshear said. “Let me just say from a state government side or a human being side it’s unacceptable… And that’s why we wanted the independent report and why we wanted to make sure we took action and this is how we want to make sure we respond when things go wrong.”

Back in February, State Auditor Mike Harmon addressed the situation when he released his audit on the system where he highlighted a specific issue with the auto pay system used early on in the pandemic. He said auditors selected a sample of 37 state employees who filed for and received UI benefits, and found 16 of them were paid benefits for the loss of part-time jobs despite still being employed by the state. Those state wages would have made them ineligible for benefits.

Meanwhile, those are eligible are claiming victory after a long battle with the antiquated system.

“It helps out a whole lot getting to meet with somebody face to face instead of on the phone or on the computer,” Rowe said.

In the coming weeks, thousands more Kentuckians will get answers, and hopefully some resolve on their actual claims as the state works to address security and fraud that’s plagued the system during the pandemic.

We asked the governor if any of these employees could face charges for the allegations. He says that’s up to a prosecutor who takes on the case. He added there have been some inquiries, but he would not speculate on what charges those could be.

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