WRAL Investigates

NC unemployment agency a 'broken system'

Posted May 7, 2012
Updated May 24, 2012

Division of Employment Security

— In 2011, the state investigated 6,077 cases of unemployment fraud and referred 286 of them, or about 5 percent, to law enforcement. The WRAL Investigates team found that a long-term problem at the state’s unemployment agency has been contributing to the fraud cases.

North Carolina’s unemployed depend on the Division of Employment Security for benefits and help finding work. Since the downturn in the economy, the agency has faced numerous problems, including late benefit payments, $28 million in over payments and a $147 million mistake when the division used state funds instead of federal funds to pay claims.

A deeper look into the agency’s performance numbers showed a bigger issue that has gone on for more than 15 years with no fix.

The state has problems determining whether someone is initially eligible for benefits and in tracking when those getting benefits are no longer eligible. In the last quarter, North Carolina had the worst scores in the country on both those measures, according to the U.S. Department of Labor.

The labor department has performed 120 quality checks on North Carolina’s unemployment agency since 1997. Of those, the agency has passed twice.

The latest report card on North Carolina’s unemployment office shows the agency failed five of the nine core measures that the labor department tests and got worse in four of the categories since the last test, including making first payments on time and detecting overpayment.

North Carolina Division of Employment Security spokesman Larry Parker says that, while the past 15 years of scores don't look good, the agency is looking forward. He released two corrective action plans Monday to show how the agency hopes to improve its scores.

Larry Parker Feds give NC unemployment agency lowest scores in nation

“We do recognize that certain areas of our unemployment insurance program need some work,” Parker said.

Fraud becoming another issue

While the numbers raise concerns about customer service, fraud has become another issue. Unemployment fraud comes in two types – intentional and unintentional. One is a crime, while the other is classified as a mistake.

“We’re dealing with more claimants than we have in the past, because more people are able to qualify for benefits longer because of the federal extension. It’s giving more people the ability to commit fraud against us,” Parker said.

William Dyer is one example. He was one of three inmates charged in a scheme to collect unemployment while locked up in the Swain County jail. The unemployment agency found out about the case after a jail employee heard the inmates talking about the scheme.

“It’s a broken system,” said Rep. G.L. Pridgen, R-District 46, who represents Hoke, Robeson and Scotland counties.

Pridgen said he decided to seek reforms after hearing about a Scotland County case in which a woman pleaded guilty to illegally obtaining more than $30,000 in unemployment benefits. The lawmaker says he believes Gerri Clark got off too easy with misdemeanors.

“It is (stealing) to me, because you’re falsifying records and everything else to get monies,” Pridgen said.

Parker says new leadership at the unemployment agency and a working relationship with a legislative task force should improve North Carolina’s performance and help cut down on fraud.

“We take everything seriously,” Parker said. “We want folks to know we are not just sitting by on this. We are doing everything we can.”

Read more WRAL Investigates stories or contact the WRAL Investigates team.


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  • barbstillkickin May 9, 2012

    The whole culture of entitled public employment has to be changed. All you hear from them is "we have not had a raise in 3 years!", blah, blah.... aetius476 THAT WOULD BE 8 YEARS BLAH BLAH BLAH. SO BEFORE YOU WHINE GET YOUR FACTS. The small person who gets no money is not the one not doing their job BLAH BLAH. It is the upper so called people who have no clue as to what they are even suppose to do. I worked for DMV and I can assure you the lowest paid people knew three times as much as their bosses. All of State departments are in a mess. Husband works for state and he does more work by noon then his boss does all week and when ever there is a problem they all go to my husband for a answer including his boss who makes four times what he makes so BLAH BLAH BLAH THAT!!!!!!!!!!!!!!

  • barbstillkickin May 9, 2012

    Really some one is finally speaking about something that is old old old news. Our unemployment office is run by people who only care about how many of each race is working there. I am so tired of these government offices more concerned about how many whites and blacks they have employed and not look at the real picture. How many employees know what they are doing. I could not believe when I heard prisoners were still collecting unemployment. I guess I am use to the north who only hires people who are experienced not what race they are.

  • ycbsysmf May 9, 2012

    Don't blame the worker bees. That's like blaming a snake for being a snake. They didn't hire themselves. DES' problems start at the top. The heads of divisions and departments have for many years now have discouraged employee accountability, buried their heads in the sand when it comes to dealing with problems, and generally not been competent or decisive enough to make the decisions that need to be made. Here are some quotes from various DES managers I've heard about: "We are the EMPLOYMENT Security Commission. We are supposed to hire people, not fire them" - this was regarding disciplining an employee that would've been fired 10 times over in the private sector for what they were getting away with at DES. "I've learned that if you leave a problem alone, it usually solves itself" - this was regarding an issue that needed attention, but the manager was too lazy to deal with it. With comments like these from the people in charge, none of these reports should be suprising.

  • USN Vet May 8, 2012

    After reading many of these comments, I think I'm in "whine" country now.

  • boogerntcsmom May 8, 2012

    No surprise to me... My husband was unemployed for six months in 2011. He had been laid off from his job. After being told he was eligible for benefits not once did he ever receive them. It made it very difficult on us because I was on disability and had to pay $1000/month for medical insurance but only receieve $1300/month in disability benefits. Those that need it can't get it and those that aren't eligible continue to receive benefits... More of who you know politics/benefits...

  • almagayle50 May 8, 2012

    ncpilot2, I'm not sure the Department of Revenue operates all that well. I reported a medicaid provider agency that works all over the state for improperly not withholding taxes. They didn't really seem concerned.

  • robbij10 May 8, 2012

    I have a degree and 15+ years business experience...I've applied for 18...yes 18 jobs at ES and can not even get an interview.....So you tell me what the problem is!

  • michele21179 May 8, 2012

    typical State, County, City, Federal incompentence.

  • driverkid3 May 8, 2012

    What party has been in control for all these years and had a chance to change it? Why didn't they change it? They let it go on and on.

    Where shady money is involved, it seems like the dems are up to it to their elbows.

  • lunarmodule May 8, 2012

    gordonwjackson, I agree with you! I have owned a small business for almost 25 years, paying into the unemployment system, which I had no problem with. Only two claims over twenty five years! Last month, I received my new premium...it went from $500 per quarter to almost $3000. I was planning to hire another employee but now I really can't afford to. Something is not right with this program.