Local News

ESC overpaid benefits for longer than reported

Posted November 1, 2010

Employment Security Commission building

— The state Employment Security Commission paid out too much in jobless benefits to thousands of unemployed people in North Carolina for longer than previously thought, according to a report obtained Monday by WRAL News.

Preliminary findings by a team of computer experts from the state budget office say that the overpayments started sometime in 2009 and that former ESC Chairman Moses Carey requested that the U.S. Department of Labor help the agency determine the cause of the problem.

ESC officials previously said a computer programming error led to overpayments to about 38,000 people receiving a second year of benefits. The agency said the mistakes started with checks issued in January.

The Labor Department determined last December that the ESC was improperly processing a 10-year-old requirement for people receiving extended benefits, according to the preliminary findings. The agency began working on reprogramming its computers in January and finished the job in May, the report states.

The problem was aggravated by the fact that ESC's mainframe computer dates to the late 1970s, the agency has few programmers who can work with the older technology and it also lacks written procedures for handling changes to the computer, according to the findings.

A series of extensions of unemployment benefits passed by Congress each called for further programming changes to the mainframe, which also was trying to handle an unprecedented volume of benefits requests because of the state's record unemployment, the findings state.

"It's crazy that something as important as ESC, their computer systems wouldn't be up to date," said Olivia Jacob, who was among those who received extra benefits.

ESC duns jobless for benefit overpayments Overpayment problems at ESC date to 2009

The ESC in September issued a series of letters to people who had been paid too much in benefits to inform them of the error and to detail how much they might owe. The agency also started docking weekly benefit checks to recoup an estimated $28 million in overpayments.

"That was probably the most devastating," Jacob said of finding money taken out of her benefit checks. "If they had just told us from the beginning that this is what's going on, you know, 'You may see some interruption.' I think people would be a lot more understanding."

Gov. Beverly Perdue last month ordered the agency to stop withholding money from the weekly checks and to repay people who had already lost money because of the moves. She then sent the team of outside IT experts in to resolve the computer problem.

The final report from the team of IT experts is expected in two weeks. Perdue is waiting to see the final report before taking any action, a spokesman said.

The governor previously expressed frustration with the ESC and hinted at possible management changes.

Jacob said Perdue should have jumped on the problem sooner, and people now need to be held accountable.

"If it was a regular employer that was playing around with our paychecks, we could sue them," she said.

The ESC has repaid all but about 2,800 people, spokesman Larry Parker said Monday. The agency also is working with the Labor Department to determine how to repay the government for the $28 million in overpayments.

The preliminary findings said the agency should have sent one letter to recipients that covered all of the changes and should have explained the situation in understandable terms instead of the technical jargon and acronyms that were used.

The report notes that North Carolina is among four states working together to develop a new system for handling jobless benefits. A consultant's report on the project is due next August, and North Carolina can tap up to $205 million in federal economic stimulus funds to implement a new system.


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  • latta005 Nov 2, 2010

    Imagine in our state and country, people getting money they don't deserve and deciding to keep it. This is not a new trend.

  • latta005 Nov 2, 2010

    No problem, many folks are living on government money. The more the better. ESC stands for Employment Security Commission - I know lots of people not securing employment because it is just easier not to- and guess what, they even get a raise.

  • mtnmama Nov 2, 2010

    Rarely saw Bush stammer when asked to answer a question he hadn't been coached on.

    Rarely saw Bush look bewildered when the same thing happens.-spiritwarrior

    Spirit, this is for you: http://www.youtube.com/watch?v=KogebxJkHig

  • mtnmama Nov 2, 2010

    hereandnow99---the factor that you are ignoring is that when there is WRITTEN policy by GOVERNMENT on HOW your payment is calculated SUDDENLY CHANGES AFTER THE FACT, it brings into question the very ethics you question. You don't just change the formula & make it retroactive without some fallout. Don't sit there & tell me that you wouldn't be a tad suspicious of this. The policies were IN WRITING at the ESC & suddenly changed, with NO warning. EVEN ESC REPS were shocked. If an entire GOV agency is operating off of a WRITTEN POLICY regarding calculations & it suddenly changes, I guaran-darn-tee you something is rotten. And if this scenario impacted the entire NC population, there would be an uprising. Just because it involves a segment of people who are already in financial dire straits who couldn't possible afford legal counsel/representation, will this blatant debacle happen without penalty for those who orchestrated it. Don't talk down to me about eithics!

  • JustOneGodLessThanU Nov 2, 2010

    Mtnmama, do you understand that these people know NOW...that they received too much money?

    Do you understand that reason for the overpayment does not matter?

    If the gov’t is giving you money...and they screw up in their calculations...it’s not YOUR money to keep. As others have said here...”The governement owns you.”

    If the gov’t gives you $1000/month for 6 months...and then say “OOPS...we gave you too much”, they have (and rightly so) full power to retract your payments and even ask for overpayment back.

    Why can they do this? That’s right!...Because they OWN you.

    You don’t get to keep overpayments. Well...I guess you can, but there's this thing called ethics and this other thing called jail...

  • Garnerwolf1 Nov 2, 2010

    You were OVERpaid. If you OVERpay your taxes, you expect a refund right? Technically, that's your fault. You can't blame the IRS for it. Why is this any different? You got more money then, you get less now (if there were to go back to withholding it). Ends up being the same amount of money overall. Shouldn't have happened, but it did. I don't understand why people think they shouldn't have to pay it back as if they somehow 'deserve' it.

  • OSX Nov 2, 2010

    Where was this "Ah, just forget about it attitude" when I owed back taxes? Sure didn't have any mercy on me. All in the past now.

  • HadEnough Nov 2, 2010

    The computer ESC uses is the very same every state agency uses.
    It is by no means outdated. Computers do what humans tell it to do.

  • mtnmama Nov 1, 2010

    didisaythat--vote Republican & your last sentence may be closer to reality than you think! And, c'mon, you can't tell me if you were in that woman's shoes that you wouldn't be outraged too. You people need to walk a mile in an unemployed persons shoes. I guarantee you would be singing a different tune.

  • didisaythat Nov 1, 2010

    I love how the person in the article talked about holding people accountable because of the programming error but doesn't mention paying back the extra money she received would be holding anyone accountable. The country has become a welfare state. What happens when the people supporting the rest become the minority?