Improper Payments in the Unemployment Insurance Program: Overpayments and Rule Violations (Louisiana Workforce Commission, Louisiana Legislative Auditor, November 10, 2021)

Summary

The Louisiana Legislative Auditor reported on November 10, 2021, that the Louisiana Workforce Commission (LWC) made approximately $2.9 million in unemployment payments that potentially violated federal and/or state program rules and for which, as of August 27, 2021, LWC had not established overpayment cases. The largest category was $1,976,041 in payments above the maximum weekly benefit amount. Payments to claimants enrolled in multiple State and Federal UI programs at once, from March 2020 through April 2021, came to $898,400, and duplicate payments for the same benefit week came to $33,536 for 53 claimants. For scale, LWC paid $9.83 billion to 794,515 claimants from March 30, 2020, through July 31, 2021. LWC agreed with the recommendations on controls and said those controls already exist.

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IMPROPER PAYMENTS IN THE UNEMPLOYMENT INSURANCE
PROGRAM: OVERPAYMENTS AND RULE VIOLATIONS

LOUISIANA WORKFORCE COMMISSION

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PERFORMANCE AUDIT SERVICES
DATA ANALYTICS UNIT
NOVEMBER 10, 2021
LOUISIANA LEGISLATIVE AUDITOR
1600 NORTH THIRD STREET
POST OFFICE BOX 94397
BATON ROUGE, LOUISIANA 70804-9397

LEGISLATIVE AUDITOR
MICHAEL J. “MIKE” WAGUESPACK, CPA

FIRST ASSISTANT LEGISLATIVE AUDITOR
ERNEST F. SUMMERVILLE, JR., CPA

DIRECTOR OF PERFORMANCE AUDIT SERVICES
KAREN LEBLANC, CIA, CGAP, MSW

TEAM MEMBERS
CHRIS MAGEE, CIA, CGAP, MBA
BRENT MCDOUGALL, CIA, CFE, ENCE, MBA
MASON INMAN, MS

FOR QUESTIONS RELATED TO THIS PERFORMANCE AUDIT, CONTACT

CHRIS MAGEE, PERFORMANCE AUDIT DATA ANALYTICS MANAGER,
AT 225-339-3800.

Under the provisions of state law, this report is a public document. A copy of this report has been
submitted to the Governor, to the Attorney General, and to other public officials as required by state
law. A copy of this report is available for public inspection at the Baton Rouge office of the
Louisiana Legislative Auditor and online at www.lla.la.gov.

This document is produced by the Louisiana Legislative Auditor, State of Louisiana, Post Office
Box 94397, Baton Rouge, Louisiana 70804-9397 in accordance with Louisiana Revised Statute
24:513. Five copies of this public document were produced at an approximate cost of $2.50. This
material was produced in accordance with the standards for state agencies established pursuant to
R.S. 43:31. This report is available on the Legislative Auditor’s website at www.lla.la.gov. When
contacting the office, you may refer to Agency ID No. 3352 or Report ID No. 82210001 for
additional information.

In compliance with the Americans With Disabilities Act, if you need special assistance relative to
this document, or any documents of the Legislative Auditor, please contact Jenifer Schaye, General
Counsel, at 225-339-3800.
LOUISIANA LEGISLATIVE AUDITOR
MICHAEL J. “MIKE” WAGUESPACK, CPA

November 10, 2021

The Honorable Patrick Page Cortez,
President of the Senate

The Honorable Clay Schexnayder,
Speaker of the House of Representatives

Dear Senator Cortez and Representative Schexnayder:

This report provides the results of our evaluation of the Louisiana Workforce
Commission’s (LWC) Unemployment Insurance program (State UI) and federally funded
COVID-19 pandemic-related unemployment assistance programs (Federal UI). The purpose of
this report was to identify potential overpayments or improper unemployment benefit payments
LWC made to claimants.

According to LWC, when improper payments or overpayments are identified, an
overpayment case is established for the claimant, and attempts are made to recover the funds
through direct repayments, withholding of future unemployment benefits, or collection from the
claimant’s federal and/or state income tax refunds.

The results of our analyses identified overpayments for which, as of August 27, 2021,
LWC had not established overpayment cases.

We found the following categories for these potentially improper payments:

° LWC made State and Federal UI payments to claimants who were enrolled in
multiple State and Federal UI programs concurrently from March 2020 through
April 2021, which is not allowed by federal law. This resulted in $898,400 in
potentially improper payments.

° LWC made payments for benefit weeks that exceeded the maximum weekly benefit
amount set in state and/or federal law. This resulted in $1,976,041 in potentially
improper payments for the benefit period February 2020 through April 2021.

1600 NORTH THIRD STREET * POST OFFICE BOX 94397 * BATON ROUGE, LOUISIANA 70804-9397
WWW.LLA.LA.GOV * PHONE: 225-339-3800 * FAX: 225-339-3870
The Honorable Patrick Page Cortez,
President of the Senate

The Honorable Clay Schexnayder,
Speaker of the House of Representatives

November 10, 2021

Page 2

° LWC made duplicate payments to claimants for the same benefit week, which
resulted in $33,536 in potentially improper payments.

The report contains our findings, conclusions, and recommendations. I hope this report
will benefit you in your legislative decision-making process.

We would like to express our appreciation to the Louisiana Workforce Commission for
its assistance during this audit.

Respectfully submitted,

Michael J. “Mike” Waguespack, CPA
Legislative Auditor

MJW/ch

LWC UI NOV2021
Louisiana Legislative Auditor
Michael J. “Mike” Waguespack, CPA

Improper Payments in the Unemployment Insurance Program:
Overpayments and Rule Violations
Louisiana Workforce Commission . oe

November 2021 Audit Control # 82210001

Introduction

We evaluated the Louisiana Workforce Commission’s

State UI was established by

(LWC) Unemployment Insurance program (State UI) and the Federal Social Security
federally-funded COVID-19 pandemic-related unemployment Act in 1935 to provide
assistance programs (Federal UI) to determine if claimants were workers whose jobs have
overpaid or improperly paid unemployment benefits during the been terminated, through no

COVID-19 pandemic. As a part of the Coronavirus Aid, Relief, fault of their own, monetary
payments for a set period of

and Economic Security Act (CARES Act), the Federal government time or until they find new
created the Pandemic Unemployment Assistance (PUA) benefit employment.
program for individuals, such as contractors, gig (occasional)
workers, or other individuals who are not eligible for regular State UI benefits. In addition, the
Federal government enacted multiple enhanced unemployment benefit programs (enhanced
benefits)! that supplemented the State UI and PUA unemployment programs. The following
State and/or Federal UI requirements were tested as a part of our audit:

° In Louisiana, state? and federal law’ set the amount of unemployment benefits
that an individual could receive per week from State UI or PUA during the
COVID-19 pandemic between $10 and $247, based on the amount of the
individual’s lost income and income earned from other sources. In addition,
individuals who were eligible to receive enhanced benefits due to various federal
actions could receive a maximum enhanced benefit of $300 or $600 per week,
depending on when they received unemployment benefits.

° According to federal law, individuals were only eligible for PUA for benefit
weeks‘ in which the individuals were not eligible to receive State UI benefits.
This means that individuals could not be enrolled in and have received both State
UI benefits and PUA benefits for the same benefit week.

' Includes $600 per week Federal Pandemic Unemployment Compensation (FPUC) for the weeks ending April 4,
2020 through July 25, 2020, $300 per week Lost Wages Assistance Program (LWAP) for the weeks ending

August 1, 2020 through September 5, 2020, and $300 per week FPUC for the weeks ending January 2, 2021 through
July 31, 2021.

> Louisiana Revised Statute (La. R.S.) 23:1474(1

3 Title II, Section 2101(d)(1) of the CARES Act

4 A benefit week represents a week in which a claimant was determined by LWC to qualify for unemployment
benefits.
UI Program: Overpayments and Rule Violations Louisiana Workforce Commission

We conducted this audit because of the significant increase in costs and the number of
applicants for State and Federal UI during the COVID-19 pandemic which, according to data
provided by LWC, totaled $9.83 billion in payments to 794,515 claimants from March 30, 2020,
through July 31, 2021.° According to LWC, it has administered 13 different unemployment
benefit programs since March 2020, with each having its own rules and requirements. In
addition, LWC stated that implementing the provisions of these programs was challenging
because its current benefit system was designed to administer two benefit programs at a time.
Louisiana’s unemployment rate grew from 5.2% in February 2020 to 13.1% in April 2020,° and
the total number of State UI claims increased by more than 2,000%, from 16,798 on February 29,
2020, to 366,798 on April 25, 2020.’ See Exhibit 1 for the rise in initial and continued State UI
claims from August 2019 through July 2021 as a result of the COVID-19 pandemic.

Exhibit 1

Initial and Continued State UI Claims
August 2019 through July 2021

400,000
350,000
300,000
250,000
200,000

150,000

100,000

o SC SF LP HP HM HM HM HM LM A PS PPMP PM LM MM LM LX

—— Initial Claims Continued Claims <Total Claims

Source: Prepared by legislative auditor’s staff using information from LWC.

Also, our office received numerous legislative requests to analyze various issues within
LWC’s unemployment benefit programs. This report is the fourth in a series of reports we have
issued on unemployment benefits paid during the COVID-19 pandemic.® In addition, our office
issued a financial audit report in June 2021 that found that LWC made payments to four
claimants who received benefit payments from two different programs for the same weeks.”

> On March 11, 2021, President Biden extended the COVID-19 pandemic Federal UI and enhanced benefits to
September 6, 2021. However, Act No. 276 of the Louisiana Legislature’s 2021 Regular Session ended the Federal
Ul and enhanced benefits in Louisiana on July 31, 2021.

6 United States Bureau of Labor Statistics, as of March 24, 2021.

7 To further combat the spread of COVID-19 in Louisiana, Governor John Bel Edwards issued a Stay-at-Home
Order on March 22, 2020, directing all Louisiana residents to shelter at home and limit movements outside of their
homes beyond essential needs.

8 The three previous reports can be found on the LLA website at the following location:
https://www.lla.la.gov/reports-data/audit/audit-type/index.shtml?key=Data%20Analytics/Medicaid

° Louisiana Workforce Commission,
&.7773098
UI Program: Overpayments and Rule Violations Louisiana Workforce Commission

The objective of this audit was:

To identify potential overpayments or improper unemployment benefit payments LWC
made to claimants.

Our results are summarized on the next page and discussed in detail throughout the
remainder of the report. Appendix A contains LWC’s response to this report, and Appendix B
details our scope and methodology.
UI Program: Overpayments and Rule Violations Louisiana Workforce Commission

Objective: To identify potential overpayments or improper

unemployment benefit payments LWC made to claimants.

Overall, we found that LWC made approximately $2.9 million in payments that
potentially violated unemployment benefit program rules outlined in federal and/or state law,
including payments to claimants enrolled in multiple programs at the same time, payments
higher than the maximum benefit amount, and duplicate payments. According to LWC, when
improper payments or overpayments are identified, LWC establishes an overpayment case for
the claimant and attempts to recollect the improperly paid unemployment benefits through direct
repayments, withholding of future unemployment benefits, or collection from the claimant’s
federal and/or state income tax refunds. The results of our analyses identified overpayments for
which, as of August 27, 2021, LWC had not yet established overpayment cases. These issues are
discussed in more detail below.

LWC made State and Federal UI payments to claimants who were enrolled in
multiple State and Federal UI programs concurrently from March 2020 through April
2021, which is not allowed by federal law, resulting in $898,400 in potentially improper
payments. As mentioned previously, the CARES Act created the PUA unemployment benefit
program for individuals, such as contractors, gig (occasional) workers, or other individuals who
lost wages as a result of the COVID-19 pandemic and were not eligible for regular State UI
benefits. These individuals are only eligible for PUA for weeks in which they are not eligible for
regular State UI benefits, which means that individuals cannot be enrolled in and receive State
UI benefits and PUA (Federal UI) benefits for the same benefit week. We analyzed LWC
unemployment benefit data and found 822 claimants who were paid State UI and PUA benefits
concurrently for the same benefit week, resulting in $898,400 in potential improper payments.

According to our results, the number of weeks in which claimants were concurrently
enrolled in State UI and PUA ranged from one week to 14 weeks and occurred throughout the
scope of our audit. See Exhibit 2 for an example of a claimant who was concurrently enrolled in
and receiving unemployment benefits from both the State UI and PUA programs under two
applications. This claimant appears to have actually qualified for PUA instead of the State UI
program and was potentially improperly paid State UI benefits in each week shown below.'°

Exhibit 2
Example of Concurrent Unemployment Benefits
Total State Maximum
Tue os esau ULand PUA | Amount Allowed Tranemen"
Paid for Benefit Week

Week 1 $220 $107 $327 $107 $220
Week 2 220 107 327 107 220

Total $440 $214 $654 $214 $440

*Total overpayments based on the claimant being ineligible for State UI and therefore, eligible for PUA.
Source: Prepared by legislative auditor’s staff using information and data from LWC.

'0 Tn this example the claimant received both State UI and PUA under two applications and was paid the $600
weekly Federal enhanced benefits twice ($1,200 total) during Week 1 and Week 2.
UI Program: Overpayments and Rule Violations Louisiana Workforce Commission

We found that these payments were made to claimants in overlapping weeks, resulting in
payments to the claimant for multiple unemployment benefit programs for the same benefit
week. According to LWC, it has identified and established overpayment cases for some instances
where claimants received unemployment payments for multiple unemployment programs in the
same benefit week. However, LWC has not yet established overpayment cases for the claimants
identified in this analysis. LWC stated that this is a known issue and that they are working to
establish overpayments on claimants affected by this issue.

LWC made payments for benefit weeks that exceeded the maximum weekly benefit
amount set in state and/or federal law, resulting in $1,976,041 in potentially improper
payments for the benefit period February 2020 through April 2021. According to state
law,'' the maximum weekly State UI benefit an individual can receive is $247, and federal law'”
also limits the maximum weekly PUA benefit in Louisiana to $247. Various federal actions also
set the maximum weekly unemployment benefit amounts for federal enhanced benefit programs
at $300 and $600 during the COVID-19 pandemic. This means that individuals cannot be paid
benefits in excess of these maximum allowable amounts for any one benefit week. See Exhibit 3
for a summary of the maximum amounts of benefits an individual could receive during the
COVID-19 pandemic.

Exhibit 3

Maximum Allowed Weekly Unemployment Benefits in Louisiana
February 2, 2020 through July 31, 2021

Eligible Benefit Periods State UI or PUA Enhanced Total
Benefit

February 2, 2020 — March 28, 2020 $247 $0 $247

March 29, 2020 — July 31, 2020 $247 $600 $847

August 1, 2020 — September 5, 2020 $247 $300 $547

September 6, 2020 — December 27, 2020 $247 $0 $247

December 28, 2020 — July 31, 2021* $247 $300 $547
*While COVID-19 pandemic benefits expire at the Federal level on September 6, 2021, Act No. 276 of

the Louisiana Legislature’s 2021 Regular Session ended these benefits in Louisiana on July 31, 2021.

Source: Prepared by legislative auditor’s staff using information and data from LWC.

Although payments for one benefit week should not exceed these amounts, we identified
$1,976,041 in potential overpayments to 3,067 claimants during the benefit period February 2,
2020, through April 24, 2021, who were paid benefits which exceeded the maximum potential
amounts allowed under these programs based on the number of weeks the claimants received
unemployment benefits. Exhibit 4 shows examples of the maximum amount a claimant should
have been paid for a benefit week versus the amount that the claimant was actually paid for that
benefit week.

" Title II, Section 2101(d)(1) of the CARES Act
UI Program: Overpayments and Rule Violations Louisiana Workforce Commission

Exhibit 4
Examples of Claimants Receiving Overpayments

Weekly Weeks Maximum Total Total
Claimant Benefit Received Amount Benefits Potential

Amount Enhanced UI Allowed for Paid Overpayment

Benefits Benefit Period

Claimant | $600 17 $10,200 $13,200 $3,000
Claimant 2 $300 6 $1,800 $3,600 $1,800
Source: Prepared by legislative auditor’s staff using information and data from LWC.

According to LWC, it has identified and established overpayment cases for some
instances where claimants received unemployment payments that exceed the maximum amount
allowed per week. However, as of August 27, 2021, LWC had not yet established overpayment
cases for the claimants identified in this analysis. LWC stated that it is working to establish
overpayments on claimants affected by this issue.

In addition, LWC made duplicate payments to claimants for the same benefit week,
resulting in $33,536 in potentially improper payments. We analyzed unemployment benefit
payment data and found instances where there were duplicate records in the data. In these
instances, it appears that the same payment was made multiple times, causing the claimant to
receive benefits in excess of the maximum weekly amount allowed, resulting in potential
improper payments of $33,536 to 53 claimants. According to LWC, this is a known issue, and it
is working to establish overpayments on claimants affected by this issue.

Recommendation 1: LWC should establish controls to ensure that individuals do
not receive payments for the same benefit week under multiple State UI and other
programs.

Summary of Management's Response: LWC agreed with this recommendation
and stated that the internal controls addressing this issue already exist. See Appendix A
for LWC’s full response.

Recommendation 2: LWC should establish controls to ensure that it does not pay
more than the maximum allowable amount for any one week of unemployment benefits
for any benefit program.

Summary of Management's Response: LWC agreed with this recommendation
and stated that the internal controls addressing this issue already exist. See Appendix A
for LWC’s full response.

Recommendation 3: LWC should establish controls to ensure that it does not make
duplicate payments for unique individual transactions.

Summary of Management's Response: LWC agreed with this recommendation
and stated that the internal controls addressing this issue already exist. See Appendix A
for LWC’s full response.
UI Program: Overpayments and Rule Violations Louisiana Workforce Commission

Recommendation 4: LWC should investigate instances in which it appears to have
made potential improper payments and re-coup dollars as appropriate.

Summary of Management's Response: LWC agreed with this recommendation.
See Appendix A for LWC’s full response.
APPENDIX A: MANAGEMENT’S RESPONSE
en! LOUISIANA 1001 North 23” Street (0) 225-342-3001 h
ittii WORKFORCE Post Office Box 94094 (F) 225-342-2051 | Aeabaceice cee
MW commission Baton Rouge, LA 70804-9094 www.laworks.net ’

Office of the Secretary

November 2, 2021

Mr. Michael J. Waguespack, CPA
Legislative Auditor

Post Office Box 94397

Baton Rouge, Louisiana 70804-9397

Mr. Waguespack,

The Louisiana Workforce Commission (LWC) respectfully submits its response to Improper Payments in
the Unemployment Insurance Program: Overpayments and Rule Violations.

My administration remains committed to ensuring the integrity of the Unemployment Insurance (Ul)
program. We acknowledge that there is work to be done to improve upon our overall effectiveness and
we will continue our efforts to provide the best services possible to the citizens of Louisiana. To be clear,
the findings at issue in this report occurred during a time of extraordinary challenges, as the COVID-19
pandemic brought into sharp focus the complexities of the laws, rules, and regulations governing the
Unemployment Insurance (UI) program.

As a result of the pandemic, Louisiana’s unemployment rate more than doubled from February 2020 to
April 2020, and the total number of UI claims increased by an astonishing 2000% within the same time
period. No state Ul program was properly equipped to handle such a sudden increase in claims. Yet, in
addition to the astronomical increase in claims, LWC was also tasked with immediate implementation of
numerous federal CARES Act benefit programs. Beginning in early 2020 and continuing into 2021, LWC
administered and/or implemented regular state Ul benefits as well as Pandemic Emergency
Unemployment Compensation (PEUC), Pandemic Unemployment Assistance (PUA), Federal Pandemic
Unemployment Compensation (FPUC), Mixed Earners Unemployment Compensation (MEUC), Extended
Benefits (EB), Lost Wage Assistance (LWA), and Disaster Unemployment Assistance (DUA) for four
hurricanes and two other severe weather events.

Five of the above programs were created in response to the pandemic and meant to assist those
unemployed suddenly as a direct result of the impact of COVID-19. These programs were not initially
equipped with the safeguards that typical state Ul programs provide. States were given little time and
guidance to implement these programs while also managing a record-breaking surge in claims and
multiple disasters.

The United States Department of Labor (USDOL) is responsible for providing guidance to the states for
implementation and administration of the various CARES Act programs. To offer a broader perspective of
the timeline within which LWC had to implement the programs, the CARES Act was signed in to law on
March 27, 2020. The first general guidance and FPUC guidance from USDOL was received on April 4,
2020. The first PUA guidance was received on April 5, 2020 and the first PEUC guidance was received
on April 10, 2020. The first pandemic-related benefit payments were made on April 13, 2020. LWC had
no choice but to act quickly in order to get claimants the relief they desperately needed. Typical
implementation of benefit programs would take an average of approximately four to six months. However,
given the dire need, such a delay was not an option. Had LWC followed the normal implementation
procedures to ensure 99.9% program accuracy, our citizens would have suffered tremendous financial
hardship.

f Equal Opportunity Emptoyer/Program | Auxiliary aids and services ave upon request to individuais with disabilitias *« TOG 800-259-5154 |
Consider as well that, throughout the COVID-19 pandemic, USDOL guidance has been in a constant
state of flux, with significant updates and changes still being made to this day. The issues that have
arisen as a result of these completely new benefit programs are not unique to the State of Louisiana.
Every state that has administered these programs through the UI system has encountered similar
challenges. Therefore, it is important to note that the findings highlighted in this report are the result of a
once-in-a-century benefit program for individuals who otherwise would not meet the eligibility
requirements of the Ul program. It is for this reason that | will attempt to shed some light on the UI
application process.

As your report states, there is a “single application” for UI benefits. Federal taw requires that state
workforce agencies determine an applicant ineligible for regular state unemployment benefits prior to
determining her or him eligible for PUA benefits. An individual who is otherwise eligible for state
unemployment could be disqualified under state unemployment for not being able and available for work,
and then considered for those same weeks under PUA. Thus, two distinct claims are established to
account for changes in benefit program entitlement based on an applicant's weekly certifications. The
mere existence of a UI claim and PUA claim for a single applicant is not necessarily an indicator of an
improper payment and/or rule violation. The below chart illustrates the claims process:

Last Updated: July 31, 2021 TRACK 1 Individual is eligible for regular UC, including UCFE and UCX.

Federal Pandemic Unemployment
Compensation (FPUC}

+ Additional amount each week for regular UC
(inclucing UCFE and UCX), PEUC, EB. PUA, STC,
TRA, DUA and SEA Individual exhausts regular UC

« $600 available for weeks of unemployment
beginning after state signs Aqreemen: through
weeks ending on or before July 31, 2020

Regular Unemployment Compensation (UC)

Pandemic Emergency Unemployment Compensation (PEUC)

+ $300 available for weeks of unemployment
beginning afier December 26, 2020 and ending
on of before July 34, 2021

Assistance Act, the state may provide an optian for the individual to continue to collecting

Mixed Earners Unemployment :
Compensation (MEUC) Individuat exhausts PEUC

+ Optional program fer states

Extended Benefits (EB)

+ HW an ondividual qualities for neve regular UC claim, the individual must stop collecting EB
and fl reguilae UC atau,

+ Additional amount each week for individuals
with at least $5.000 in sel ployment income
during specified tate frame.

+ Applies to clauns for regular UC Gactuding
UCFE and UCX), PEUC, EB, STC. TRA. DUA anc
SEA (nxchiing PUA),

Additional $100 avaitable lor wweeks of
unemployment no earlier than “week ending
January 2. 2021 through weeks ending on or

+ If an individual is collecting EB when additional PEUC KS become available unde

Convnued Assistance Act, the Individual must exhauss existing EB cla before teverung to
PEUC claim.

Individual exhausts EB or state is not triggered “on” AND

before July 31, 2021 Individual must be unemployed, partially unemployed, or unabte to work because of a
listed COVID-19 related reason in the YIPL No. 16-20, Change 5 to qualify for PUA.
TR ACK 2 Individual who is self-employed, , .
seeking part-time employment, Pandemic Unemployment Assistance (PUA)

does not have sufficient work history, of is - Han indevitiual qualifies for new seqular UC claim, the individual must stop collectisg PUA
otherwise not eligible for regular UC, PEUC or EB aind file a news regulac UC claim
Individual must be unemployed, partially + [fan individual is coflectag PUA when addibonal PEUC weaks become available under the
unemployed, or unable to work because of a Continued Assistance Act, she indwidual must strep colle g PUA and revert to PEUC

listed COVIO-19 related reason in the UIPL No. elm

. + It state riggers “on” to EB ang an individual is ehgible for EB, the individual niust stop
16-20, Change Sto qualify for PUA. coallecing PUA sod file £6 olen

As depicted in the chart, an eligibility determination must cycle through all the programs for a final
determination of program eligibility. Further, in addition to the initial program eligibility, continued eligibility
must be recalculated at each quarter change for federal claims. These quarter changes occurred in April
2020, July 2020, October 2020, January 2021, April 2021 and July 2021. Moreover, some individuals’
state UI eligibility changed on a week-by-week basis, which complicates eligibility determinations and
introduces the possibility of overpayments being made.

A.2
Overpayments are a normal occurrence, even under typical Ul operating circumstances. When coupled
with the rapid implementation of multiple new programs without the benefit of the usual extensive test
controls in place to ensure accuracy and efficiency, the reality is that mistakes are inevitable. However,
once an overpayment is established, LWC works hard to recoup those funds through various methods in
order to ensure that all available funds are disbursed to those entitled to them.

As stated in the audit report, LWC has paid nearly $10 billion since the onset of the COVID-19 pandemic.
We take our responsibility to provide relief to the individuals entitled to the benefit programs we are
tasked with administering very seriously. While we strive to ensure that we do so effectively and within the
confines of the law, we acknowledge that mistakes are made and we will work earnestly to rectify the $2.9
million in payments that potentially violated the employment benefit program rules.

The findings presented in this report offer an opportunity for us to learn what processes work best under
extraordinary circumstances and what potential problems may arise. To that end, LWC reaffirms its
commitment to continue to make enhancements to the administration of the Unemployment Insurance
program.

Should you have any questions or need additional information, please feel free to contact my office at
225-342-3001.

Sincerel

Secretary

A.3
Recommendation 1: LWC should establish controls to ensure that individuals do not receive
payments for the same benefit weeks under multiple State U/ and other programs.

The Louisiana Workforce Commission (LWC) concurs. The internal controls addressing this
specific issue already exist.

Recommendation 2: LWC should establish controls to ensure that it does not pay more than
the maximum allowable amount for any one week of unemployment benefits for any program.

The Louisiana Workforce Commission (LWC) concurs. The internal controls addressing this
specific issue already exist.

Recommendation 3: LWC should establish controls to ensure that it not make duplicate
payments for individual unique transactions

The Louisiana Workforce Commission (LWC) concurs. The internal controls addressing this
specific issue already exist.

Recommendation 4: LWC should investigate instances in which it appears to have made
potential improper payments and re-coup dollars as appropriate.

The Louisiana Workforce Commission (LWC) concurs.

A4
APPENDIX B: SCOPE AND METHODOLOGY

This report provides the results of our data analytics unit performance audit of the Louisiana
Workforce Commission (LWC). We conducted this analysis under the provisions of Title 24 of the
Louisiana Revised Statutes of 1950, as amended. This audit covered the unemployment benefit eligibility
period of February 2, 2020, through April 24, 2021. Our audit objective was:

To identify potential overpayments or improper unemployment benefit payments LWC made to

claimants.

The scope of our audit was less than that required by generally accepted Government Auditing
Standards issued by the Comptroller General of the United States. We believe the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objective. To answer our
objective, we performed the following audit steps:

Obtained unemployment benefits data from LWC, including information regarding
applications, claimants, benefit payments, established overpayments, and transferred
unemployment benefits.

Researched and reviewed state and federal laws, rules, regulations, executive orders, and
policies regarding the administration of and eligibility for unemployment insurance
benefit programs.

Analyzed unemployment benefits data from LWC to determine if claimants received
payments for multiple benefit programs for the same benefit week. Removed instances
from our results if LWC had established an overpayment case on the unemployment
claim prior to August 27, 2021.

Analyzed unemployment benefits data from LWC to determine if claimants received
payments in excess of the maximum amount allowed based on the amount of time the
claimant was enrolled in a particular unemployment benefit program and the length of the
program. Removed instances from our results if LWC had established an overpayment
on the unemployment claim prior to August 27, 2021.

Analyzed unemployment benefits data from LWC to determine if claimants received
payments for duplicate payments for the same benefit week in excess of the maximum
amount allowed for any one benefit week. Removed instances from our results if the
duplicate payments did not exceed the maximum allowed weekly benefit amount or if
LWC had established an overpayment on the unemployment claim prior to August 27,
2021.

Sent results to LWC for review to determine why these issues occurred and incorporated
feedback into the report draft.

B.1

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