Following unemployment audits, Schmidt calls on Kelly to expand credit monitoring to Kansans
After a forensic audit of Kansas’ unemployment system confirmed Kansas paid more than $400 million to fraudsters in the past two years, Kansas Attorney General Derek Schmidt is calling on Democratic Gov. Laura Kelly to provide free credit monitoring services to all Kansans.
Schmidt, the Republican nominee for governor, will face off with Kelly in the Nov. 8 election for Kansas’ highest office.
The audit was discussed in a Kansas legislative committee Wednesday but was not released to the public. The Star obtained an unredacted copy of it and another unreleased audit on the security of Kansas’ unemployment IT systems.
The audits concluded that Kansas paid between $441 million and $466 million in fraudulent unemployment payments between March of 2020 and March of 2022 while also likely flagging numerous legitimate claimants as fraudsters.
The Kansas Department of Labor, the IT audit said, had only partially implemented most best practices for cyber security identified by the National Institute of Standards and Technology.
In a Thursday press release, Schmidt said the audits underscored a need to mitigate the risk to Kansans and called for expanded credit monitoring services.
“Auditors now have confirmation hundreds of millions of dollars were paid out to fraudsters, and it appears the Kelly administration’s failure to secure Kansans’ personal information contributed to the debacle,” Schmidt said in a statement. “The only way to truly mitigate the ongoing risk to Kansans from the effects of this disaster is to provide credit monitoring services. It is the least the state can do for its citizens at this point.”
The audit did not specifically tie the fraud to a data breach.
In a statement, Kelly’s spokeswoman Brianna Johnson said free credit monitoring services are already provided to Kansans if their personal information held by a state is accessed in a data breach.
“There is no evidence of any widespread data breach at KDOL, and we already provide free credit monitoring services for one year to anyone whose information has ever been compromised,” Johnson said.
Schmidt’s proposal would expand monitoring services to all Kansans for at least year.
In the early days of the COVID-19 pandemic Kansas’ unemployment system, and its 1970s era IT system, buckled under the weight of an influx of legitimate and fraudulent claims. Nationwide, the U.S. Department of Labor predicts $163 billion was paid out in fraudulent unemployment claims.
Kansas is in the process of modernizing its system. In a statement Wednesday the Kansas Department of Labor said the audits underscored why that work is needed.
“The report proves what we have long said: the most important issue facing our Department is modernizing the outdated IT systems that caused these vulnerabilities during the pandemic. While the audit shows that Kansas was not unique in experiencing unemployment fraud nationally, it also affirms that our current modernization campaign will be essential to protecting workers during the next crisis,” Sandy Johnson, the agency’s chief of staff, said in a statement.
Republicans have long pointed to the breakdown at the department of labor as an indictment of Kelly’s leadership. Last year Kansas Republican National Committeewoman Kim Borchers was searching for Kansans who couldn’t get their benefits to feature in attack ads on Kelly.
Wednesday’s report resulted in another wave of criticism from Kansas Republicans. House Speaker Ron Ryckman, Senate President Ty Masterson, Rep. Sean Tarwater and Sen. Renee Erickson backed up Schmidt’s call for credit monitoring.
“Kansans trusted Laura Kelly to safeguard their personal data,” Ryckman said in a statement. “Instead, her administration put thousands of families’ financial security at risk during the pandemic, allowing overseas hackers to take possession of Kansans’ social security numbers and other identifying information. Kansans are owed more than an apology for her gross negligence.”
This story was originally published September 8, 2022 at 11:09 AM.
