GDOL acknowledges this is a repeated finding from previous years, therefore the Department concurs with this finding and offers the following response preceded by the auditor’s findings:
Auditor’s Findings:
The Georgia Department of Labor did not have effective internal controls in place to ensur...
GDOL acknowledges this is a repeated finding from previous years, therefore the Department concurs with this finding and offers the following response preceded by the auditor’s findings:
Auditor’s Findings:
The Georgia Department of Labor did not have effective internal controls in place to ensure unemployment benefit payments were made correctly and only to eligible claimants.
1) Claimants did not self-certify for benefits in eighteen instances
GDOL Response:
Employer Filed Partial Claims (EFC) are submitted by employers on behalf of the claimant. The employer is responsible for attesting to the employment status and weekly earnings of the claimant for the EFC submitted. An affidavit certifying that the employer has obtained earnings from other employment as well as other requirements must be completed before EFCs can be entered or uploaded.
Claimants for which EFCs are submitted are considered to be still attached to the employer and are exempt from the requirement to register for employment services per Georgia Employment Security Law Rule 300-2-4-.02. Such individuals are not required to be nor certify on a weekly basis to be able, available and actively seeking work.
We recognize the state auditor's recommendations to add the self-certification. However, the current unemployment system is obsolete, having been put into production in 1982. This finding will persist until our new modernized unemployment insurance (UI) system is implemented in 2026.
2) Fraudulent employer-filed claims were filed for thirteen claimants
GDOL Response:
When we identify employer fraud schemes, we follow the guidance issued by the United States Department of Labor (USDOL) and collaborate with the United States Department of Labor Office of Inspector General (OIG) to investigate these cases. Additionally, we have taken the following measures to safeguard the system against fictitious employers:
• Effective December 6, 2021, the Employer Filed Partial Claims (EFC) process was revised to require individuals (employees) to complete an EFC profile to include a real-time identity verification before payments can be made. Employers are responsible for submitting the request for the payment to certify to the individual’s employment status, but the individuals must certify their identity and personal information for the claim to be processed. Employees are notified when a claim is filed on their behalf and provided instructions for their portion of completing the EFC process. The MyUI Customer Portal dashboard provides all the EFC correspondence sent to the individual as well as the status of the profile setup and identify verification.
• Before the implementation of the EFC profile requirement, GDOL utilized the Social Security Administration (SSA) crossmatch and Systematic Alien Verification for Entitlement (SAVE) verification processes to verify the identity of claimants where employers submit claims on their behalf.
• Effective June 29, 2023, GDOL implemented additional employer filed claims safeguards and security measures to reflect amended Georgia Employment Security Rule 300-2-4-.09. Employers must now meet the following conditions to submit Employer Filed Partial Claims on behalf of their employees:
o Employer accounts must have been registered with GDOL for more than 5 years.
o Employers must be current on all quarterly tax and wage reports.
o Employers must be current on all quarterly contribution taxes, assessments, penalties, and interest.
o The week ending date on employer filed claims cannot be older than 30 days.
The amended Georgia Employment Security Rule also clarifies that part-time employees are not eligible for Employer Filed Partial Claims.
BPC and Integrity merit staff continue to establish pseudo claims when fraud is confirmed to relieve victims of liability and the fraudster is unknown. Otherwise, the payments are moved to the fraudsters claim account, if identified.
GDOL has procured a vendor to build and implement a modernized UI system. We are also pursuing data analytics tools to expedite the identification and detection of fraudulent activities. These tools will also be incorporated into the modernized solution.
3) Proof of employment or self-employment or a valid offer to begin employment and proof of wages was not submitted by five Pandemic Unemployment Assistance (PUA) claimants. One of these claimants was not eligible to claim benefits in Georgia.
GDOL Response:
The claimants who established PUA entitlement with a weekly benefit amount greater than the minimum or later determined to not be eligible were based on wages entered by the claimant and/or wages reported by the employer. The Coronavirus Aid, Relief, and Economic Security (CARES) Act only required proof of wages to be submitted. If claimants did not submit proof, federal requirements only allowed for payment of the minimum weekly benefit amount and no disqualification of benefits. Claims established at a higher weekly benefit amount had to be reduced to the minimum amount if no proof was provided. To date, no proof has been provided by the claimants cited. The claims were reduced as appropriate. An overpayment has been established on all five claims identified for the difference in weekly benefit amount for weeks paid over the minimum amount under CARES and for the entire amount for weeks paid under Consolidated Appropriations Act (CAA)/American Rescue Plan Act (ARPA).
GDOL’s current UI Information Technology (IT) system was developed in 1982 using mainframe “legacy’ technology. Due to the system’s age and other limitations, many automated processes and corrections cannot be fixed and/or easily implemented. As such, many processes must be handled manually by staff. This includes reviewing all the PUA proof documents submitted to determine the validity and eligibility for each PUA claim. Based on the volume of workload and staff limitations, GDOL has been unable to quickly complete this manual review to correct the finding. It is anticipated this manual review will continue throughout the FY24 audit review period.
Summary:
GDOL’s limited technology resources will hinder our ability to update our current system to satisfy the state audit’s recommendation. Therefore, we acknowledge that this finding will persist until a system-wide resolution is implemented in the new modernized UI system. The new solution will include a self-certification and dual certification process for employer filed claims and include controls over eligibility determinations for current and future UI programs.
GDOL greatly appreciates the feedback and recommendations and will consider this information in our endeavors to modernize our UI system and business processes.