Fraud still plagues Kansas unemployment system. Gov. Kelly must put fixing it first
Untold thousands of out-of-work Kansans are in a severe crisis today due to the state’s fumbling of unemployment claims.
Count Gov. Laura Kelly among them. If her administration doesn’t get on top of the roiling crisis, it will take on the aura of a scandal, if it hasn’t already. And for a governor who was in the vanguard of protecting schools at the onset of the COVID-19 pandemic last March, that would be a shame indeed.
The coronavirus pandemic has played havoc with every state’s employment and its unemployment system. But Kansas seems especially hard-hit and incapable of handling it: A survey from personal finance website WalletHub.com about how quickly states’ workforces are rebounding from the pandemic says Kansas’ is the slowest in the country. In fact, the state ranks 51st, when including the District of Columbia, for improvements to unemployment claims, according to to the site’s survey.
Of course, the Kansas Department of Labor can’t control the pace of the economy. And it is admittedly saddled with 1970s-era computer systems to deal with a suffocating number of claims and calls. Even though the department beefed up its call center to 450 people, unknown thousands of out-of-work Kansans have been unable to get through to request desperately needed unemployment checks.
Meanwhile, the system is paying out an undetermined amount of finite funds to fraudsters who have used the names of real Kansans — even those of state employees and the governor herself — to file fraudulent claims. One employee told The Star Editorial Board that his small company had fraudulent claims filed in the names of over half its employees.
Many of the identity theft victims have also endured the further insult of then being told they owe federal taxes on the unemployment benefits the state had paid out to thieves in their names.
Ryan Wright, a special adviser to the Kansas Department of Labor, says the department is working to ameliorate those problems with taxpayers — and that businesses will not be liable for fraudulent claims against them. And, he says, after installation of fraud-protection software last week, 1.2 million fraud attempts have been prevented — giving the department more time to get to legitimate claims-handling.
Still, the department hasn’t yet finished measuring the width and breadth of the fraud, nor is every legitimate claim getting through. Wright said the department is working with, and independent of, the Legislative Post Audit department to come up with a figure on the fraud.
“I think they are very close to wrapping up their work and putting out a number,” he said of Post Audit’s investigators. “I also think that we are getting close to that as well.”
Wright said estimates of Kansas unemployment fraud that reach up to $700 million are “pure speculation. We have no reason to think that it is that high at this time.”
Wright also pushed back against a perception that Kansas is the No. 1 state for unemployment fraud: “There is no data that points to that being accurate.”
Yet, delays in answers only encourage speculation. And legislators are circling overhead, demanding answers for constituents who are livid about the state’s inability to keep up with real unemployment claims and rampant fraudulent ones.
If the Kelly administration can’t come up with answers, and soon, it’s the mishandling of the unemployment crisis that will define the governor’s term in office.
No one should want that. Least of all her.