Audit finds millions in unemployment benefit overpayments, jammed call centers

The state Department of Workforce Development overpaid nearly $168 million in unemployment benefits during the last three years and the agency's call centers couldn't handle hundreds of thousands of calls initiating claims, according to a state report released Tuesday.

The Legislative Audit Bureau's findings showed the agency identified 681,400 overpayments totaling $167.9 million during the three years that ended June 30. The department attributed nearly 85 percent of the overpayments to individuals who unintentionally provided the agency with inaccurate information used to calculate their weekly payments, according the audit bureau's report. The agency traced 9.5 percent of the overpayments to individuals who intentionally provided inaccurate information.

The department is required to give the Unemployment Insurance Advisory Council an annual report on its efforts to detect and prosecute fraud in the preceding year. Auditors said department reports to the council haven't been clear.

Their findings showed the 2014 report indicated the agency identified $24.8 million in overpayments resulting from intentionally provided misinformation in 2013, and that $24 million of that was recovered. However, most of that money had been recovered in previous years; DWD actually recouped only $2.3 million in 2013.

The audit bureau also found that department call centers were too busy to answer nearly 1.7 million calls from people looking to initiate claims in the year that ended June 30. That amounts to more than 60.2 percent of the calls the centers took during the year, auditors said. The problem was most apparent in December and January, when the centers couldn't handle 80 percent of the 836,700 calls they received.

Department of Workforce Development Secretary Reggie Newson, one of Republican Gov. Scott Walker's appointees, said in a letter to the audit bureau that the agency would comply with auditors' recommendations to include an annual breakdown in recouped overpayments.

As for the call centers, he said the recession has spawned an unprecedented number of unemployment claims and a seasonal increase in claims is typical in cold-weather states such as Wisconsin. The number of calls also doesn't necessarily reflect the number of actual callers since internal estimates show that when a caller doesn't get through he or she calls back an average of four times, Newson added.

The agency has worked to improve its online claim filing system, hired additional staff for the call centers and extended call center hours, particularly over the Christmas and New Year's holidays, he said. The department also has been encouraging claimants to call on particular days of the week to distribute the volume more evenly, he said.

The report sparked a flurry of statements from lawmakers in both parties.

The leaders of the Legislature's audit committee, Rep. Samantha Kerkman, R-Salem, and Sen. Robert Cowles, R-Green Bay, said they're encouraged the department is making improvements. Senate Majority Leader Scott Fitzgerald, R-Juneau, said the level of fraud in the state's unemployment system is too high and promised to improve program oversight and management. Walker has said he wants to require drug testing for welfare and unemployment applicants.

Senate Minority Leader Jennifer Shilling, D-La Crosse, meanwhile, described the call centers' performance as "completely unacceptable." Assembly Minority Leader Peter Barca, D-Kenosha, accused Republicans of mismanaging one of the state's most critical services.

"I hope we can all agree that at the very least," he said, "the citizens of our state deserve to have their phone calls answered by the state agencies that serve them."