CACI Capitol Report: State Reports $305 million of Improper UI Payments

Last week, Ellen Golombek, Executive Director of the Colorado Department of Labor and Employment (CDLE), told a Colorado Association of Commerce and Industry group that the state made improper unemployment insurance benefits payments totaling $305 million between 2008 and 2010. During this period, the State of Colorado paid a total of $2.3 billion in unemployment compensation benefits.

Colorado’s improper payments amount to 17 to 18 percent of total payments made, according to Golombek, and four percent of the improper payments involved fraud. The national average for improper payments is 12 percent.
Work-search program abuses account for the largest percentage of improper payments. Currently, claimants are required to make five job contacts each week as a condition to receiving their benefits checks. A small percentage of individuals is audited to determine compliance with the program, but it is unknown whether the vast majority of claimants is in compliance.
Of the $305 million, Golombek says CDLE’s Unemployment Insurance Division has recovered 43 percent and will seek to recover the rest from benefit recipients.
Golombek explained that, historically, there has been pressure on the Unemployment Insurance Division to quickly issue payments, which led to mistakes being made by staff. There has also been less attention paid to compliance requirements for claimants due to the large number of claims and the extension of benefits from 26 to 99 weeks.
Gov. John Hickenlooper has issued an Executive Order directing the CDLE to reduce the state’s improper payment to below the “acceptable federal benchmark of 10 percent.”
Golombek told the CACI group that CDLE’s Unemployment Insurance Division plans to audit more claimants and issue warnings to individuals who fail to comply with the work-search program. Individuals who remain out of compliance will be subject to additional consequences.