Report: State Workers Bilked UI System Out of $54K

As thousands of Kentucky residents still wait to receive unemployment benefits from the past year as a result of the COVID-19 pandemic, there were some state employees who rigged the system to claim jobless benefits while still keeping their full-time job.

A report in Thursday’s Lexington Herald-Leader said 19 state workers in the Kentucky Education and Workforce Development Cabinet received over $54,000 in state and federal unemployment benefits during April and May of last year.

Governor Andy Beshear, who has not publicly mentioned the state inspector general’s report issued two months ago until the Lexington newspaper broke the story Thursday, said he ordered the investigation once he learned of the fraud.

click to download audioThe newspaper report said the majority of the state workers were employed at the Office of Unemployment Insurance or the Unemployment Insurance Commission, to agencies tasked with helping process pandemic-related jobless claims.

Beshear called the fraud of the employees ‘unacceptable’.

click to download audioThe inspector general’s report said workers in the Office of Unemployment Insurance applied for jobless benefits to which they knew that they weren’t entitled and that certain state workers filed for jobless benefits without disclosing their continued full-time state employment on their claims. Rules require all jobs and wages to be identified.

The report also said workers improperly accessed their own and friends’ jobless benefits claims in order to review them, and in some instances, override stops placed on them and help process them.

While Beshear didn’t get into specifics, he said criminal charges could happen if prosecutors decide to take up the case.

click to download audioThe report released February 19 also said the state workers, who were still receiving their full-time state salaries, typically collected unemployment benefits based on those salaries and not on the smaller part-time wages they claimed to have lost.