State News

Georgia inspector general uncovers $6.7M in fraudulent payments to state employees

(The Center Square) — Georgia’s inspector general has tentatively identified more than $6.7 million in incorrect unemployment insurance payments to hundreds of state employees.

In a Wednesday letter to David Dove, Gov. Brian Kemp’s executive counsel, State Inspector General Scott McAfee said more than 280 full-time state employees erroneously received the payments in 2020 or 2021. The payments averaged roughly $23,700 per employee.

According to the letter, the totals are a “conservative estimate” as the review “did not account for employees who applied and received less than $1,000, were part-time, are no longer actively employed by the state, or claimants who received benefits via debit card rather than direct electronic transfer.”

“Offices of inspectors general and other investigative agencies across the country continue to struggle with the sheer volume of incoming referrals,” McAfee wrote. “Unfortunately, this office can confirm that Georgia’s state workforce was not immune.”

The IG combined data from the State Accounting Office and the U.S. Department of Labor’s inspector general to develop the estimate. The Georgia Department of Labor doled out more than $22.9 billion in UI-related benefits in fiscal 2020 and fiscal 2021.

According to McAfee, a GDOL UI claims examiner was among the state employees to receive benefits. The employee “received approximately $31,220 and … continued to update a fraudulent UI account while employed with GDOL,” McAfee wrote.

In his letter, McAfee called on lawmakers to consider legislation that extends the statute of limitations for prosecuting pandemic-related fraud. He also wants lawmakers to give his office administrative subpoena power and said the SAO and the GDOL should coordinate quarterly to confirm that state employees have not submitted incorrect or false UI applications without state employment details.

A spokesman for Kemp confirmed that the governor’s office received the letter and is reviewing it. 

“The Office of the Inspector General sent a letter today to the Governor’s office alleging unemployment insurance fraud committed by over 280 state employees,” GDOL said in a statement. “It is not clear to GDOL how the Office of the State Inspector General obtained the confidential UI data it utilized as the basis for its UI fraud allegations. UI program data is confidential and can only be disclosed under limited circumstances permitted in state and federal law.

“The Georgia Department of Labor is the only agency authorized by Georgia law to make a determination of unemployment fraud. This can only be done after conducting a full wage investigation in compliance with state and federal law,” the agency added. “GDOL has fully cooperated with other state agencies, including OIG, and provided extensive UI records when the legal requirements were met. This agency will continue to follow the laws set forth by the state and federal government, as is our legal responsibility, and will work to recover overpayments per legal guidelines.”

Last year, federal authorities filed charges against eight people they say conspired to defraud Georgia out of millions of dollars in unemployment benefits. According to the feds, the eight conspired to defraud the GDOL out of $30 million in benefits meant to help unemployed Georgians during the COVID-19 pandemic.

At the time, experts told The Center Square that the charges illustrated the potential vulnerability of the state’s systems.

By T.A. DeFeo | The Center Square contributor

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