Report finds potentially $400 million wrongly given out from Virginia Employment Commission

I-Team investigates findings in audit
Virginia Unemployment Commission
Posted at 9:55 AM, Mar 03, 2022
and last updated 2022-03-03 22:15:48-05

HAMPTON ROADS, Va. – An audit of the Virginia Employment Commission has highlighted major issues within the agency after an explosion of claims filed as a result of the pandemic.

The report dissects problems that could have potentially cost taxpayers $400 million.

The News 3 investigative team spoke to those impacted, the VEC commissioner and Virginia Gov. Glenn Youngkin about the new findings.

While Sheryl Little worked through the pandemic, she had no idea her identity had been stolen until unusual bank statements from Wells Fargo started showing up in her mailbox.

"I considered it junk mail because I don't bank with Wells Fargo," she said. "By the beginning of November, I received my third piece and I'm like, 'Uhhh... let me open this.'"

"There were payments coming from the Virginia Employment Commission with four different individuals names on it going into this account. I mean, we're looking at a total of $13,000," Little said.

Little was shocked. She said she had applied for unemployment at the beginning of the pandemic, but withdrew when her employer received money from the Paycheck Protection Program, a Small Business Administration-backed loan that helps businesses keep their workers.

Little said the experience was frustrating. This has been a constant complaint News 3 has heard from viewers about the VEC from many people who have dealt with trying to get unemployment benefits.

She said after News 3 ran a story on television, she got a call from an investigator with the VEC, but now - two months later - she said she has not heard anything else.

Little added that she has taken precautions to protect her personal information.

Derrick B. Williamson said the VEC told him he was overpaid $7,500 in unemployment benefits.

“I don’t have anything in black and white telling me the 'why?' I called the overpayment department numerous times,” said Williamson.

He said the stress has been immense.

“It’s frustrating to keep having to make calls and the biggest thing is when different people tell you different things."

News 3 has been reporting on problems since the start of the pandemic.

The Auditor of Public Accounts, the group who does audits for state agencies, released the latest audit report for the VEC at the end of January.

The report for the fiscal year that ended in June 2021 found that while the Commission tried to process claims quickly, outdated technology and limited staffing resulted in a significant number of errors in benefit payments.

The report states that the VEC did not detect many of these errors until after it issued payments, and they did not have the systems or processes in place to record over payments to recoup these funds.

Bob McNab is an economics expert and professor at Old Dominion University.

"This perfect storm overwhelmed the Commission in the short term, and so it prioritized - rightfully so - pushing payments out the door, but when you prioritize pushing payments out the door, you lose internal control,” said McNab.

News 3 spoke to the new VEC commissioner, Carrie Roth, about the audit. She said this report and another one done by the Joint Legislative Audit and Review Commission show significant deficiencies in the agency.

Click here to read the full audit

“I think it just emphasizes the amount of work that we have here at the VEC to do,” said Roth.

The report also found that during 2021, the VEC processed $8.4 billion in unemployment claims, which is a 61% increase over the year prior.

And it states collectively, they identified more than $380,000 in known questioned costs, which is money that should not have been given out and estimate approximately $400 million in likely questioned costs.

The News 3 investigative team asked Roth if the VEC has gotten any of the $400 million back. She did not provide an exact dollar amount but said, “Those things are all in process and constantly evolving and to prosecute takes some time to do that, we are working through those amounts."

She said they are constantly getting money back and some of the suspects are unknown. Roth added that this is not unique to Virginia and seen across the country.

Roth said they are working to improve customer service training, focusing on appeal cases and working to improve relationships with other law enforcement agencies.

"There are still a number of people that have not received their claims and their benefits that they deserve, and so we are laser-focused on the unpaid claims and trying to move that backlog through," said Roth.

News 3 also asked Gov. Youngkin about the audit.

“We've cut materially the backlog. We're working through the challenges. We're redefining processes and and, in fact, how the call centers are working. We're doing an enormous amount of work in order to fix the Virginia Employment Commission. This started on day one, and I'm very pleased with the progress, but we still have a lot of work to do,” said Gov. Youngkin.

McNab said the findings are vital for all government entities.

“The largest lesson learned for the VEC and the Virginia government is that you need to be prepared for when disasters hit,” said McNab.

Click here to read the full audit

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