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Systemic failures blamed for TN mishandling $1.9 million in unemployment benefits

Lesley Albert shares contents of ziploc bag - identity theft history
Posted at 7:52 PM, Mar 28, 2022
and last updated 2022-03-28 20:52:45-04

A new audit published Monday detailed how several issues — including identity fraud — led to Tennessee mishandling more than $1.9 million in unemployment benefits.

The Tennessee Comptroller of the Treasury released its findings as part of a "state single audit" for the year ending on June 30, 2021.

One of their major concerns was how the Tennessee Department of Labor & Workforce Development (TDLW) issued pandemic benefits to claims that failed ID verification for state unemployment.

While some waited for their claims to clear the verification process, others applied once again, but this time for pandemic benefits. This created several duplicate claims for claims agents to sift through and left many waiting weeks for help. The bottleneck of both legitimate and duplicate claims left behind 90,000 pending claims in the beginning of 2021.

The state was under a lot of pressure to process these claims as fast as it could. Several thousand were never properly vetted as a result before they were paid.

They discovered the issue in September 2020 and requested systems changes with their vendor, Geographic Solutions. The idea was to have better communication between state and federal programs, so no claim would fall through the cracks.

It’s a feeling Lesley Albert knows all too well.

NewsChannel 5 met her last year when she told us she had been waiting months to get any unemployment benefits. She applied in June 2020, and it would take until September 2021 before she saw a dime. Lesley was told her claim may have been compromised by identity thieves, so she would have to present a series of documents to prove her identity.

“When you have all of those things and you have to continually prove that you are you, to me, it tells of a system that’s broken,” Lesley said.

State officials reassured NewsChannel 5 for months that there was not a widespread fraud issue until Feb. 2, 2021. TDLWD commissioner Jeff McCord told NewsChannel 5 in a one-on-one interview that the volume of claims and unemployment fraud were the two biggest setbacks to processing claims faster.

“You have to be more intentional about every claim and not make assumptions about claims and that limits automation,” McCord said.

The audit notes that the automation process by Geographic Solutions Unemployment Systems (GUS), “did not function as expected and automatically approved claims for payment despite the presence of unresolved issues.”

Rep. John Ray Clemmons, who helped to process several claims since the beginning of the pandemic called it, “a failure of leadership.”

He knows much can be said about the state’s vendor not correcting the issue sooner. Ultimately, he places the blame on Gov. Bill Lee and how few resources were offered to fix what’s been a systemic failure.

“Be more thoughtful about who you’re entering into contracts with and provide the necessary oversight that is required of these vendors to whom we’re paying hundreds of millions of dollars. We should expect results, and we should expect our tax dollars to be used appropriately,” Clemmons said.

The rush to process claims as fast as possible is one reason the audit notes that as much as $410,000 was paid to claims where thieves used the identities of dead people.

The audit also points out that TDLWD personnel did not manually review and approve claims for Tennessee benefits to ensure claimants lost their jobs to no fault of their own. Some claimants received incorrect weekly benefit amounts.

Lesley knows this is not just a Tennessee problem. She’s now up to three states where someone else has used her name to apply for unemployment benefits. Claims were filed in Indiana and California before Tennessee. At least in those other states, she said they were quick to call and verify that she was not the one who opened the claim, to begin with.

Thieves were relentless and once again compromised her unemployment account in October 2021. She was told to wait until they could clear her name, but that would take until January 2022. Overall, she says the state still owes her nearly $4,000 in payments although she now has a full-time job.

Lesley said identity thieves have cost her more than $60,000 since 2020.

“We’ve got the technology out there to fix it. It’s just who’s going to step up to do it,” Lesley said.

Clemmons told us he wants Tennesseans to hold their lawmakers accountable for asking the tough questions and getting answers from leadership.

“It’s simply unacceptable and taxpaying Tennesseans should expect more of our state’s leadership,” Clemmons said.

NewsChannel 5 reached out to the state’s unemployment officials for comment, but they said they’re still reviewing the findings. They did offer a response to the Comptroller’s office and claimed how staffing was a major issue, even after hiring 500 more staff members since the beginning of the pandemic.