Nick Craig
Carolina Journal
An audit recently published by the Office of the State Auditor details continued issues the North Carolina Division of Employment Security (DES) has with its ability to provide unemployment benefits in a timely fashion.
A March 2022 report from the state auditor’s office revealed that 24% of initial unemployment benefit payments, totaling $438 million, were delayed between January 2020 and March 2021. The auditor’s office suggested several corrective actions that DES could take to enhance services for unemployed North Carolinians. The report released Thursday showed that despite handling significantly fewer claims in 2023, the percentage of late first payments rose to 43%, amounting to $7.8 million.
Federal regulations mandate that North Carolina must issue at least 87% of initial unemployment benefit payments within 14 days. However, the report revealed that out of 60,815 first payments made last year, 11,371 were delayed by more than 35 days. Of those, approximately 6,000 cases experienced delays of 50 days or longer.
The 2022 audit made several recommendations to DES to improve their timeliness.
“DES did not fully implement recommendation because it chose to prioritize improvements to claimant eligibility determination processes rather than improving the timeliness of first unemployment benefit payments,” the auditor’s report said.
In a November 6th letter, Machelle Baker Sanders, the state’s commerce secretary which oversees DES acknowledged that the organization did fail to make payments on time.
“I would like to express my appreciation to your team for their work to examine this issue and the complexities of the unemployment insurance program, and to provide feedback on the corrective actions that DES has implemented,” wrote Sanders.
The Commerce Department attributed last year’s late payments partly to “staff turnover and recruitment issues” in its adjudication unit, which began in 2022 and went into 2023. The unit underwent over 40 personnel changes and took an average of 145 days to fill vacancies. In November 2023, after several employees left for higher-paying jobs, the division reclassified positions to offer higher salaries. The department noted that as staffing levels stabilized toward the end of 2023. This improvement in staffing allowed the division to increase the rate of timely first payments.
The auditor’s office noted that the division had not fully implemented its recommendation to monitor the timeliness of unemployment benefit payments. In response, Sanders explained that the division had developed a reporting system designed to proactively identify claims at risk of delay.
“Over the past two-and-a-half years, DES has built a comprehensive and robust data dashboard system so that agency units can easily access information that is critical to their daily functions, unit metrics and effectiveness,” Sanders reported. “It has also allowed each business unit to better manage the flow of claims and has empowered its teams to make important departmental decisions.”
Sanders also pushed back against the auditor’s claims that the division might be ill-equipped to handle an economic downturn, highlighting a recently implemented plan that includes conducting regular readiness assessments. An assessment will be conducted in the month of December.
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