Audit finds dead, prisoners, state employees drawing unemployment benefits

NASHVILLE, Tenn. (AP) — Tennessee Department of Labor officials say they are continuing to collect millions of dollars of unemployment benefits that were improperly paid out.

This comes after a scathing audit by the Tennessee comptroller’s office that said prisoners, state employees and at least one dead person have been on the rolls of those receiving unemployment benefits in Tennessee, in spite of repeated warnings that the state was improperly paying out tens of millions of dollars in jobless claims.

The comptroller’s audit said the unemployment benefit system made overpayments of $98 million in the past six years. It estimated a backlog of payments could balloon that figure to $171 million.

Tennessee Department of Labor and Workforce Development officials took issue with that estimate and other findings in the audit.

The state overpaid $165 million in the past six years but have been able to collect $71.5 million of it and continue to pursue the money.

“We’re really actively pursuing getting that overpayment balance down,” unemployment administrator Linda Davis said. She said the department had several tools to go after the money, including garnishing wages and seizing tax refunds.

The audit looked at whether several state agencies receiving federal money were in compliance during the 2013-2014 fiscal year. It was pointedly critical of the unemployment benefit system because the same problems had been noted in previous years. In 2013, former Labor Commissioner Karla Davis and two of her top administrators abruptly resigned before the release of an audit showing massive overpayments of unemployment benefits.

“To prevent further erosion of the public’s trust in the (unemployment insurance) program, management needs to aggressively implement full corrective actions to the numerous control and compliance deficiencies,” a portion of the audit read.

The audit also noted long delays and officials not randomly checking on whether people receiving benefits were complying with a state law that says they must verify at least three job searches a week.

State officials said they have increased response times to citizens and they are complying with the law because those receiving jobless benefits can either show they have tried to find work or that they have received services through a career center.

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