RALEIGH, NC (WNCN) — North Carolina has, according to a. Failed to timely pay more than $400 million in unemployment benefits to people during the COVID-19 pandemic new report published on Monday.
State Examiner Beth Wood (D) found that the Job Security Department was unprepared for the massive surge in jobless claims that began in March 2020 and failed to adequately monitor whether payments were made as quickly as mandated.
“It was a tipping point that everyone had to do quickly,” Wood said in an interview Monday. “(People) couldn’t pay their bills. They couldn’t buy food. They couldn’t pay their mortgages. It was therefore crucial that the response time was very fast.”
She added that while the pandemic has prompted an unprecedented surge in jobless claims, the agency has not adequately prepared for a surge in demand for services following the Great Recession just over a decade ago.
“No one could have seen the pandemic coming. No one. But they had absolutely no preparation for the next economic downturn,” Wood said. “There was no plan. So it’s pretty chaotic up front.”
“One should have been better prepared at the front and not had to run a sweatshop in a crisis.”
Wood noted that the state failed to spend approximately $438 million in the timeframe it should have. She pointed out that federal requirements require at least 87 percent of payments to be made within 14 to 21 days of filing a claim. In addition, Wood found that DES had not met timeliness requirements over the past 10 years due to the way the agency designed its claims process.
The test covered the period between January 1st, 2020 and March 31st, 2021.
“The system they built to streamline it wasn’t even designed to be contemporary,” she said. “Somebody has to get this agency, or this department if you will, to respond more timely to the needs of the North Carolina unemployed.”
As Gov. Roy Cooper (D) ordered various businesses to close, the state’s unemployment rate rose to 14.2 percent in April 2020. On Monday, the Commerce Department said it had fallen to 3.9 percent by January 2022.
The Department of Employment Security declined our request for an interview on the auditor’s findings on Monday.
In a response accompanying Wood’s report, the agency said it concurred with its findings.
DES noted that the state saw “an exponential increase in jobless claims” in 2020, and the agency took steps like hiring additional staff and contractors to try to respond to the unprecedented demand.
The agency also noted that the federal government continued to add new unemployment programs that required additional federal policies and staffing to implement.
DES also said it was working on a “strategic plan for the post-pandemic era,” which should include: rapid onboarding and training of staff, rapid expansions of call centers, rapid expansions in fraud detection and prevention, and technology and monitoring solutions.
Weeks after the initial spike in jobless claims, Gov. Cooper also replaced the agency’s head, putting former state congressman Pryor Gibson in charge of DES.
Charlotte’s Jenni Propst was among the thousands of people making claims in the early days of the pandemic. She works in the entertainment industry and ended up being unemployed for over a year.
She waited weeks for her payments and became increasingly worried about how she would pay her bills.
“It was a disaster. It was a nightmare. It was a month of sleepless nights,” she said. “It was such a trying and horrible time in my life that I don’t really want to go through it again.”
She remains concerned that she and her colleagues could face renewed problems with the unemployment system during another economic downturn.
“I don’t have a lot of faith that next time it will be better. We know it will happen again,” she said.
When asked if she thinks DES is prepared for a future surge in demand, Wood said she was unsure.
“I have no idea. I think they’re still trying to get out of this one,” she said. “So I can’t tell you if they’re prepared or not.”
https://www.cbs17.com/news/capitol-report/audit-more-than-400-million-in-nc-unemployment-funds-not-paid-out-in-timely-fashion/ More than $400 million in NC unemployment benefits not paid on time