Raleigh, N.C. — An audit of the North Carolina Employment Security Commission verified well-documented problems with the commission's computer programming that led to overpayment of beneficiaries in the fiscal year that ended in June 2010.

In early 2010, the ESC overpaid benefits to thousands of people because its computers were ill-equipped to calculate compensation for those who had been receiving benefits for more than a year. When the federal government moved to extend the time that the unemployed could get checks, the ESC couldn't cope.

After handing out an estimated $1.5 million too much, the ESC attempted in Sept. 2010 to recover the money by docking unemployment checks from those who were overpaid, leading to a public uproar, extended media coverage and an intervention from Gov. Bev Perdue.

According to the audit, "the commission did not implement programming changes to identify overpayments for FAC (federal additional compensation) payments. As such, no attempts have been made to recover overpayments ..."

The state owes that money to the U.S. Department of Labor. ESC officials have yet to work out a plan for repayment.

At the time, David Clegg, deputy chairman of the ESC, attributed the overpayments to a computer programming error, saying technicalities of unemployment extensions granted by Congress and the heavy volume of people in the system contributed to the problem.

In response to the audit, the ESC said it was continuing to work on that computer fix and expected to have it in place by the end of 2011.

In addition to programming problems, the audit found shortcomings in the people and processes at the ESC. Workers made errors in data entry, failed to verify that applicants were eligible for benefits, and managers failed to review employee timesheets, the audit found. In response, the commission said it had put in more internal controls to keep those issues for recurrence.