I-Team: Inside The Audit - WAFB 9 News Baton Rouge, Louisiana News, Weather, Sports

I-Team: Inside The Audit

By David Spunt - bio | email

BATON ROUGE, LA (WAFB) - A report from the Legislative Auditor's Office, criticizing the Louisiana Workforce Commission (LWC), shows the agency failed to recoup millions and millions of dollars from Louisiana employers.

The LWC is the former Louisiana Department of Labor. According to the state legislative auditor, all Louisiana employers may be helping to pay for an $85 million mistake.

Here's an example of what's happened. Let's say "Julie" lost her job in Baton Rouge and moved to Little Rock, AR. She would file her unemployment claim in Arkansas and get paid by that state. Louisiana would then turn around and reimburse Arkansas. Louisiana is supposed to then charge Julie's former employer back in Baton Rouge, so Louisiana can get its money back.

That last step, auditors said, has not been happening. Last year alone, failing to take that last step cost Louisiana $44.5 million.

"This is an issue that's a long standing issue," said Curt Eysink, exec. dir. of LWC. "I don't know if it's ever been handled correctly, but we're out in front of it and fixing it and I'm proud of that."

"In October 2010, LWC began quarterly billing all employers for charges from other states for claims that were filed after March 21, 2010 in order to recoup the costs of interstate unemployment insurance benefits," Eysink wrote in his official response to the audit.

According to Legislative Auditor Daryl Purpera's office, the same thing happened in fiscal year 2008 to the tune of $21 million and $20 million the next year. Add that into the 2010 figure, it totals $85 million that, so far, has not been reimbursed to Louisiana.

"All employers could end up paying the bills on this," said Purpera. "All employers could have their rates increased."

Eysink said that's not true and does not want all employers to panic.

"The employers whose people are involved whose claims were filed out of state, they've already received notices, and going forward they will receive notices a claim has been filed against them," he explained.

NOTE: After our report aired, the a spokeswoman with the LWC responded with the following:

"Today, at least 32 other states have borrowed $46 billion to pay unemployment benefits because their trust funds have run dry. Louisiana's fund is solid today because of good oversight and management, informed legislation, and the active involvement of the business community and claimants."

"The Louisiana fund has a positive balance of about $835 million. These funds are paid by employers, whose unemployment insurance tax rates are based on their claims experience and the overall risk they pose to the health of the fund. Louisiana's strong positive balance, in effect, represents amounts that are pre-paid by employers to cover future claims."

This lessens the effect of future claims on the taxes paid by employers that have strong balances in the fund. This also reduces the effect on the trust fund of the issue cited in the audit."

Click here to read the whole report

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