Skip to content
Link copied to clipboard

Pa. audit finds major issues with state unemployment-system fund

The state auditor general found oversight and accounting issues in a fund tied to the state unemployment system's problems. In December funding issues led the state to close three call centers and lay off nearly 500 employees.

HARRISBURG - Pennsylvania's auditor general said Tuesday that he found major problems with the accounting and oversight of a fund related to issues plaguing the state's unemployment compensation system.

A dispute over how the state uses the supplemental money on its unemployment compensation system led to the layoffs of hundreds of workers in December and lengthy wait times for residents calling for assistance.

In a news conference Tuesday, Auditor General Eugene DePasquale said his audit showed that the Department of Labor and Industry did not properly account for spending from the Service and Infrastructure Improvement Fund between 2013 and 2016.

The department did not record specific expenditures in the account, instead lumping them together, he said.

"We don't know how they spent the money," DePasquale said.

And he said that required reports were submitted to the governor and General Assembly more than 18 months late, with too little detail to be useful.

After the state Senate declined to renew supplemental funding for the unemployment compensation system, the Department of Labor and Industry in December closed three call centers and laid off nearly 500 employees.

In January, callers to the state's unemployment compensation service centers received busy signals 99.3 percent of the time, DePasquale said.

Fixing the problem will take money, the auditor general said. He said the Department of Labor and Industry will need an estimated $159.5 million between 2017 and 2020 to maintain its current unemployment compensation operations and replace its computer system, and an additional $38.5 million to recall furloughed workers for one year.

On Monday, Gov. Wolf signed legislation providing $15 million for the system, while saying in a statement that a failure to approve a long-term response to the problems would lead to another crisis.

The administration plans to rehire approximately 200 workers for nine months, the governor's office said.

In a statement, a spokeswoman acknowledged that the Department of Labor and Industry "did not sufficiently delineate" between different types of money, but said that all money was spent on permitted expenses.

In a statement Tuesday, Wolf spokesman J.J. Abbott said the Department of Labor and Industry had acknowledged errors in reporting the use of the funding and had fixed several of the problems identified in the audit.

But he said that a "long-term funding solution" is also needed.

Senate President Pro Tem Joe Scarnati and Senate Majority Leader Jake Corman  said in their statement that the audit findings "reinforce our decision to resist writing a $57 million check to the department in October as requested by the Wolf administration."