The state Department of Labor’s (DOL) failure to replace its long-troubled Unemployment Insurance (UI) system and ad hoc workarounds to compensate for the old system weakened oversight and ultimately contributed to an estimated billions of dollars in improper payments during the COVID-19 pandemic, according to an audit released today by State Comptroller Thomas P. DiNapoli. DOL refused to provide auditors with the data that would have enabled auditors to calculate the precise amount of improper payments and was slow to provide requested information that delayed the completion of the audit. The audit examined the period from Jan. 2020 to March 2022.
“The state Department of Labor’s antiquated UI system was ill-equipped to handle the challenges posed by the extraordinary demand caused by the pandemic for unemployment benefits and more lenient federal eligibility requirements,” DiNapoli said. “The agency resorted to stop-gap measures to paper over problems, and this proved to be costly to the state, businesses, and New Yorkers.” DiNapoli said. “The department needs to recoup fraudulent payments and correct its mistakes. I was pleased the department agreed with our recommendations and is moving to implement them.”
DOL officials did not heed warnings as far back as 2010 that its UI system was out of date, nor did it address issues identified in a 2015 State Comptroller’s audit. The system lacked the resources necessary to adjust to new laws or handle workload surges –– a dire...
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