Kansas lawmakers demand fraud audit on state’s labor office in amendment to unemployment bill

Capitol Bureau

TOPEKA, Kan. (KSNT)— Some Kansas GOP lawmakers are demanding more oversight of the state’s unemployment office.

In a committee hearing Tuesday, lawmakers in the Kansas House Commerce, Labor and Economic Development Committee added an amendment to a bill focused on revamping the state’s unemployment system. Supporters of the amendment said they’re trying to get to the bottom of the massive fraud that’s hit the department during the pandemic and figure out where that money went.

“That amendment allows the council that we’re going to create to order an audit on the department of labor, so we can figure out how much fraud there was, when they knew about it, what they did about it, and the extent of it,” said committee chair, Representative Sean Tarwater, R-Stilwell.

The Kansas Department of Labor (KDOL) has been fielding a high volume of fraud onset by the pandemic that’s also impacting states across the U.S.

“We are being hit massively both here in Kansas and across the country within some kind of cases national or even international fraud rings,” KDOL Deputy Secretary Brett Flaschbarth told Kansas’ Capitol Bureau.

State labor officials released estimates on how many taxpayer dollars were lost during the pandemic on Tuesday. Officials are reporting $290 million lost in paying out fraudulent claims in 2020.

The issue prompted lawmakers to add the amendment to the unemployment bill as they work on it in committee to provide specific answers on where the money went, in addition to the current investigation.

Right now, an audit is being conducted by the Legislative Division of Post Audit and is set to be completed by the end of the month to provide a precise number on the estimated fraudulent claim payments.

The bill is also set to kickstart a project to update the computer system for the state’s unemployment office. The goal is to get the project completed by 2022.

The outdated system is one of the main obstacles the state’s labor department has created for limiting their ability to ward off fraud and causing payment delays. But lawmakers are hoping the bill will be a permanent fix.

“My heart and my concerns lie chiefly with the employees and the everyday Kansans that need and deserve our help,” said Representative Stephanie Clayton, D-Overland Park, the ranking minority member for the committee.

Earlier this month, the state’s unemployment office deployed new security software to limit fraud. So far the department said they’ve been able to stop nearly 5 million fraudulent login attempts.

The state is still working to figure out how to recover the $290 million lost in paying out fraudulent claims.

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