The Department of Workforce Development made $167.9 million in overpayments on unemployment claims over a three-year period and often takes years to recoup money that shouldn’t have been paid to applicants, according to a legislative audit.
The Legislative Audit Bureau found 681,400 overpayments between fiscal years 2011-12 and 2013-14. Those who intentionally provided inaccurate information on their claims accounted for $86.3 million in overpayments even though they were just 9.5 percent of the improperly paid claims.
The audit also found it typically takes years to fully recoup payments and said DWD has overstated its success in doing so.
The amount DWD recouped declined steadily from $51.7 million in fiscal year 2011-12 to $42.3 million in 2013-14. The $42.3 million recovered in 2013-14 included overpayments that had been identified over the prior 26 years. That included a $10 overpayment the state identified in fiscal year 1987-88.
The agency is required each year to report to the Unemployment Insurance Advisory Council on efforts to detect and prosecute fraud. In this year’s report, DWD identified $24.8 million in overpayments that resulted from intentional misrepresentations in calendar year 2013 and said it recouped $24 million, a recovery rate of 97 percent.
But the LAB review of the report found the percentage is overstated, because almost all of the $24 million recouped last year had been identified in prior years. The agency actually recouped just $2.3 million of the overpayments identified in 2013 from intentional misrepresentations, a rate of just 9.5 percent.
The report noted a number of reasons for overpayments, including: applicants providing incorrect information, intentionally or not, resulting in larger benefit payments; DWD error in calculating payments; and multiple parties making errors, such as individuals and employers providing inaccurate wage information to DWD.
The review was requested by the Joint Legislative Audit Committee after concerns were raised about the experience of those attempting to file claims, and Co-chairs Rob Cowles, R-Green Bay, and Samantha Kerkman, R-Salem, said they’d like to explore the overpayments at a future hearing on the report.
Kerkman said it was “eye popping” that those who intentionally provide false information to DWD account for less than 10 percent of the improper payments but more than half of what’s shelled out.
The audit also found almost 1.7 million calls from those applying for unemployment were blocked in 2013-14 because call center staff were busy and telephone queues were full.
That was 60.2 percent of the calls placed to the centers that year.
Traffic was heaviest in December 2013 and January, when more than 80 percent of calls were blocked. Less than 10 percent were blocked from February through June.
DWD indicated there was a spike in calls a year ago because of the expiration of federal emergency unemployment benefits, along with the filing of initial claims after holiday-related jobs ended or work hours reduced because of the harsh winter weather.
DWD Secretary Reggie Newson focused on agency efforts to address blocked calls in his letter to the agency. He noted DWD has implemented an online system for initial and continuing claims that will allow filing from a computer, tablet or smartphone seven days a week.
“This change will also greatly reduce the need for claimants to call DWD to complete their claim, increasing customer satisfaction and reducing costs to taxpayers while ensuring that claimants can still access DWD staff on a timely basis should they need assistance completing their claim,” he wrote.
Senate Minority Leader-elect Jennifer Shilling, D-La Crosse, slammed the Walker administration for failing to deal with the backlog and said Dems have previously proposed ways to cut wait times, only to be rebuffed.
“This lack of service is completely unacceptable,” she said.
