Local News

Audit: ESC paid benefits with state, not federal money

Posted February 3, 2011

Employment Security Commission building

— The state Employment Security Commission mistakenly paid $147 million in jobless benefits with state funds instead of federal money in the past two years, according to a state audit released Thursday.

The finding is the latest problem for the ESC, which last fall was roundly criticized for trying to dock the weekly benefits checks of thousands of unemployed people after overpaying benefits for months.

Federal inspectors discovered in December 2009 that a computer programming error resulted in benefits being paid from state funds, but the ESC didn't correct the problem until last May, according to the audit. It took the agency another four months to determine how much the mistake cost the state, the audit states.

"It was a glitch in their computer program that they had known about, again, for months and had not done anything to fix it," State Auditor Beth Wood said. "It is a huge concern."

ESC spokesman Larry Parker said the money was recovered last summer when the agency reconciled its 2009-10 fiscal year financial statements. He also noted the money involved came from the state Unemployment Insurance Trust Fund, not general state funds.

In the interim, however, the state had to borrow money to cover the shortfall in state funds, according to the audit.

The audit also urged the ESC tighten up access to its computer system, noting some staff members have access they shouldn't have to confidential information of people applying for benefits. Wood said the issue was raised in a previous audit but wasn't addressed.

"What both of those audits would lead you to believe is that there are not the correct checks and balances in place," she said. "It's hard to understand how it gets that far."

Employment Security Commission, ESC logo Auditor questions controls in place at ESC

Similar computer errors led to an estimated $28 million in overpayments to about 38,000 people last year. The ESC started trying to recoup the money in September without warning, prompting an angry response from people receiving jobless benefits.

Gov. Beverly Perdue ordered the agency to stop docking people's benefits checks and to repay anyone who had lost money because of the move. Parker said Thursday that all of that money has been refunded.

Perdue also sent in a group of technology experts to help the ESC fix its computer problems, and Parker said that all of the issues have been resolved.

“The governor believes (the ESC) will fix any issues needed to continue their services to North Carolina citizens,” Perdue spokeswoman Chrissy Pearson said Thursday when asked if the governor still had confidence in ESC's leadership.

The ESC must repay the U.S. Department of Labor the $28 million in money mistakenly paid out, but it remains unclear whether a payment plan has been worked out.


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  • bombayrunner Feb 3, 2011

    USN Vet
    Who cares what the ESC job is. My philosophy about work is, anything worth doing is worth doing it right -- especially if you are getting paid to do it. No one is forcing you to do it - quit. But if you stay - do it and don't whine about it as that is just poison. In your interview, did you ask if there were raises and beer parties or were they just looking for warm bodies? Most folks in this world don't have a pot to go in -- man up.

  • bombayrunner Feb 3, 2011

    had a job so long that I can't recall what its like without one. many friends lost theirs and are so unhappy. I sit and listen to them and offer encouragement, plus help them whereever I can. But what surprises me most is that I can find jobs, it is just something I can do -- good ones too. When I tell my friends, they are 'picky' and want to sit back on unemployment till it ends.

  • USN Vet Feb 3, 2011

    It's always a hoot to read the chest pounder's statements about incompetence and that “firing them all” will fix-it. How many of you have ever opened a claim for an unemployed person? I'd like to see you do error free work while trying to manage a case load of 400 individuals attending college under the federally sponsored WIA program, do a full load of claims classes showing people how to open their claims and file for their checks, fix claims that people have filed incorrectly so they can get their checks, function as a receptionist and answer the main switch board when phones are ringing constantly, help people with their resumes, their job searches, and do interview preparation classes. These are just a few of the duties during a typical day in the life of an ESC worker. Oh, did I mention no pay raise in soon to be three years and the pay is low to begin with. What we have here is a lot of hate in people caused by other events in their lives and they are using the ESC as an ou

  • imdicktrickle Feb 3, 2011

    Someone keeps deleting my comments. We only have one option after all of these "incidents". Overthrow the government and start over. They work for us. If they don't leave on their own, we could help them out.

  • readerman Feb 3, 2011

    State workers who are this bad give all the rest a bad name.

  • PanthersFan45 Feb 3, 2011

    A software program or "Glitch in the system" will eventually be blamed for all the fiscal woes in this state. Still takes an operator to oversee the programs in place, plus they admitted they have known about the problem for some time. IMHO this isn't a glitch, it's the state of NC knowingly paying out money that it shouldn't.

  • oleguy Feb 3, 2011

    Do away with all these programs, its all waste, and only G knows how much money is just plan stolen,,,
    In the private sector someone would be looking a job,,,

    Its not their money so who cares,,,

  • yankee1 Feb 3, 2011

    Another sign that incompetence runs rampant throughout NC State government at all levels. Story after story, year after year. It never ends. To top it off, it appears as though even losers get rewarded a la ol' Bobby Etheridge. These same incompetent people then cry crocodile tears when the public relishes their pay cuts and layoffs. Go figure!

  • diana123 Feb 3, 2011

    i want my $7 state tax return from 2009!

  • 71265kwjc Feb 3, 2011

    Bev will correct things, she dosent stand for corruption. I think she will move Boob Etheridge from his current appointed position and put him in charge of cleaning up the ESC. These two tigers teamed together will solve the problem. WRAL will keep you complainers posted, Goverment will save Goverment, you'll see.