Long waits, improper payments: NC lawmakers examine problems in COVID-era unemployment benefits
Years after more than 1 million North Carolinians struggled with long delays in receiving their unemployment benefits during the COVID-19 pandemic, state legislators are seeking answers on what went wrong and how to fix the problems in the future — especially since government officials have also alleged that fraud was widespread in those same unemployment claims.
On Wednesday the legislature's House Oversight Committee met to question the head of the state's unemployment division, as well as State Auditor Beth Wood. Her office previously published negative reports on the unemployment system's actions during the COVID-19 pandemic.
WRAL previously reported that problems at the unemployment office date back years, even before the pandemic exposed them to a larger part of the population.
Wood, a Democrat, commended the Republican-led committee for keeping up the pressure for improvements to the unemployment system. She said it's only a question of when — not if — another recession or economic downturn will happen. "We know the next one is coming," she said.
Antwon Keith, who leads the Division of Employment Security, took over the top job last year and was a leading deputy for years prior to that. He kicked off his testimony Wednesday by noting how the influx of unemployment claims during the early days of the COVID-19 pandemic was not just unexpected but also massive in scope.
"We went from 2,500 claims a week to a max of 54,000 in one day," he said.
Throughout the first few months of North Carolina's COVID-era lockdown, from March to June of 2020, the state saw tens of thousands of people filing for unemployment every single day. The service industry was particularly hard-hit, but workers in many types of jobs were furloughed, laid off or saw their hours significantly cut.
Rep. Jeff McNeely, R-Iredell, blamed Democratic Gov. Roy Cooper and his top aides for not doing more to give the unemployment office — which is part of the Cooper administration — more of a heads-up that business closures were coming in March 2020 when Cooper issued a series of executive orders mandating social distancing rules, business closures, stay-at-home directives and more.
"I think they knew they they were going to shut down the economy, but unfortunately they forgot to let everybody else know," McNeely said.
He asked Wood if she agreed that was a problem. She said it all happened quickly, but that regardless of what the unemployment office knew ahead of time, it should've been ready to handle the unemployment claims anyway. Much of that is on the office and its leaders, she said, but some of the responsibility also falls on the legislature — which controls state government funding, in addition to being able to wield oversight powers.
"It's not going to occur unless you gentlemen and ladies step in and make it happen," Wood said.
Old problems, future fixes
It wasn't just Republicans grilling Keith over the unemployment system Wednesday.
"We can do better," Rep. Maria Cervania, D-Wake, told Keith. "And, I will offer that you should."
North Carolina had about 5 million people in the workforce when the pandemic hit, and state data shows that by the end of 2021 more than 1.5 million of them had qualified for unemployment benefits.
They were paid a combined $14 billion — nearly all of it coming through new federal unemployment programs created by the Trump administration but administered by state governments — to respond to business closures in the early days of the pandemic. The state has since said it gave improper payments in roughly one in every five cases. The most common cause was due to people who got rehired but didn't report it, and continued improperly taking unemployment benefits even after they started working again.
In other instances the state miscalculated how much people were owed in benefits, and accidentally paid them too much.
Under questioning from Rep. Allen Chesser, R-Nash, Keith defended the accuracy of the benefit calculations. Only about 5% of the billions spent was later determined to be an overpayment, Keith said, and the state has since gotten back much of that.
He also noted new steps the department is taking to improve on all counts in the future, including with mobile push alerts to remind people to keep their paperwork up to date, as well as new artificial intelligence systems that he said should take some of the more challenging work out of human hands. But that also received some pushback, with Rep. George Cleveland, R-Onslow, saying he wasn't necessarily comfortable with having computers do government work since it could make accountability harder for future mistakes.
Wood, however, said AI can help improve government efficiency and morale. She credited new computer programs with helping her own office by taking on the "mindless, repetitive work" needed for some audits and freeing up the humans in her office to engage in more critical thinking.
When asked for details like which specific services would be handled by AI at the unemployment office, or which AI program the state will be using, Keith said he'd have to get the legislature answers at a later time. But in general he defended the department's post-COVID efforts to improve its services.
"We have done a lot of doggone work," he said.
