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State Auditor Mike Harmon speaks on unemployment fraud at BG Chamber event

Published: May. 4, 2021 at 10:12 PM CDT
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BOWLING GREEN, Ky. (WBKO) - As the COVID-19 pandemic hit, Governor Andy Beshear ordered non-essential businesses to close their doors and have employees work from home if possible. However, working from home was not an option for many Kentuckians, who then sought unemployment benefits.

State auditor Mike Harmon said during the week of March 21, 2020, at least 49,000 people applied for those benefits. The next week, that number was up to well over 100,000.

“Which brings us to why I’m here, which is discuss two recent audits that are of great interest to the business community as well as the state as a whole,” Harmon said as he was speaking to local businesses and the chamber. “Multiple problems within the unemployment insurance systems were detailed in the first and second volumes of our statewide single audit.”

One of the most notable findings of this audit was that about 400,000 unemployment emails were archived, or never read. “It’s just very sad to me,” Harmon stated.

He also explained that there were many people who received auto-payments that were technically not eligible for unemployment assistance. This was due to the fact that state leadership adopted a policy allowing claimants to receive these payments without putting in their weekly wage information. Harmon said this was a violation of federal law.

“The auto-pay policy was in place really just for two weeks for traditional unemployment and eight weeks for what is known as the pandemic unemployment assistance,” Harmon explained. During the auto-pay period, $655 million in unemployment benefits were paid out.

Mike Harmon also mentioned that the state did not report unemployment related data breeches in a timely manner. “Now, state law requires agencies to report a data breach within 72 hours, but our office didn’t receive notification until one month after the first breach,” he said.

The state’s attorney general’s office is also investigating whether or not ten people working within the office of unemployment were able to access and make changes to their own claims.

Harmon ended his presentation by saying currently, the unemployment office is receiving an influx of fraudulent claims. He said he has offered for the APA to assist law enforcement with tactics to track down and prevent this from happening.

“I believe there is a light at the end of the tunnel. Now, we can’t replace what’s been lost, but the hard working people of Kentucky need to have the freedom to be able to get back to living and working to laugh again, and certainly to have hope again,” Harmon said.

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