Fraction of La. unemployment payments went to dead people, audit finds

Most improper payments could not be prevented

By: - June 21, 2021 5:51 pm
Small percentage of unemployment payments went to dead people

File photo. (Wesley Muller/Louisiana Illuminator)

The Louisiana Workforce Commission distributed just over one one-hundredth of its total unemployment payments to people who were dead during the coronavirus pandemic, according to the Louisiana Legislative Auditor, who noted that the vast majority of these mistaken payments were unpreventable and largely the result of bad timing.

According to a report released last week, the Legislative Auditor found approximately $1.08 million in unemployment payments went to 374 dead people during the pandemic, accounting for a very small percentage (0.013%) of the total unemployment distributions the Workforce Commission made from March 30, 2020, through April 30, 2021. 

The Auditor found that $629,091 of the mistaken payments could not have been prevented because the benefits were paid before the Louisiana Department of Health received death reports or death certificates for the unemployment recipients. 

Approximately $337,007 of the payments should have been prevented by the Workforce Commission’s current controls, and $123,194 could have been prevented if the Workforce Commission had conducted a weekly rather than a monthly match with resident death data from the health department.

The health department is required each month to send the workforce commission a list of individuals who died in Louisiana during the preceding month. The commission then performs a data match of individuals receiving UI benefits to the file sent by the health department. Additionally, the workforce commission matches all new unemployment claims against the Social Security Administration’s death master file.

In all of the instances found by the auditor, the workforce commission can attempt to recover the mistaken payments.

The workforce commission identified several issues that likely caused the improper payments. First, the data match to the Social Security master death file worked, but the commission’s controls did not stop payments for deceased individuals receiving federal unemployment assistance. The commission identified and fixed this issue early in the pandemic. Second, in some cases, the commission initially identified the claimant as deceased, but staff still cleared them based on uploaded identity documents.

Lastly, some of the improper payments were the result of fraud or identity theft. The workforce commission stated that it is currently reviewing cases identified as potential fraud or overpayments, according to the auditor’s report. When fraud or overpayments are identified, the commission tries to enter into a repayment agreement with the individual. If that proves unsuccessful, then the state can collect on the individual’s income tax returns.

In its response to the Legislative Auditor, the workforce commission pointed out that identity theft has and will continue to plague states administering federal CARES Act benefits such as unemployment assistance. Initially, the unemployment program allowed individuals to file and receive benefits without any reported earnings from a covered employer. This was where most of the fraud entered, the commission said.

In her written response to the Louisiana Legislative Auditor’s report, Workforce Commission Secretary Ava Cates wrote that the “initial prohibition on requiring proof of employment hindered the (commission’s) ability to detect that an individual had been deceased prior to the reporting.” 

“Normal UI operations require all state workforce agencies to validate the claimant’s representations against wage records and employers’ responses,” Cates wrote. “The LWC was explicitly prohibited from employing this long-standing integrity principle during the first several months of the Pandemic Unemployment Assistance (PUA) Program. Therefore, these claims bypassed our first line of defense.”

Cates wrote that the Commission will pursue a “more frequent cross-match” with the health department for death records as recommended, but she said this will not prevent all improper payments in the future. “It is virtually impossible to be immediately informed that an individual is deceased,” she said.

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Wesley Muller
Wesley Muller

Wes Muller traces his journalism roots back to 1997 when, at age 13, he built and launched a hyper-local news website for his New Orleans neighborhood. In the following 22 years since then, he has worked as a journalist for the Times-Picayune in New Orleans, the Sun Herald in Biloxi, WAFB-9News CBS in Baton Rouge, and the Enterprise-Journal in McComb, Mississippi. Much of his work has involved reporting on First Amendment issues and watchdog coverage of municipal and state government. He has received several honors and recognitions, including McClatchy's National President's Award, the Associated Press Freedom of Information Award, and the Daniel M. Phillips Freedom of Information Award from the Mississippi Press Association, among others. Muller is a New Orleans native, a Jesuit High School alumnus, a University of New Orleans alumnus, a veteran U.S. Army paratrooper, and an adjunct English teacher at Baton Rouge Community College. He lives in Ponchatoula, Louisiana, with his teenage son and his wife, who is also a journalist.

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