Ky. State Auditor addresses Southern Kentucky Chamber of Commerce

When the average Kentuckian hears the term, “state auditor,” he or she usually pictures something along the lines of the IRS.

At Tuesday’s Southern Kentucky Chamber of Commerce Luncheon, Kentucky State Auditor Mike Harmon explained that the he and his staff are working for the people of Kentucky to ensure local and state government entities, including sheriff’s departments, county clerks, boards of education, municipalities, and even the state offices, have properly spent their public funds and properly accounted for the spending.

“We are the people’s auditor, not the IRS,” Harmon explained.

Harmon said with a limited staff and the large number of local government entities across the state, the office relies on tips concerning potential waste, fraud or abuse from the public.

Tips may be submitted by calling 1-800-KY-ALERT, or online at https://secure.kentucky.gov/formservices/auditor/digitalsafehouse.

Once a tip is received, Harmon said the staff will make an initial assessment to determine the validity of the tip and determine whether further action is warranted.

Harmon noted that the annual Statewide Single Audit of Kentucky for Fiscal Year 2020 contained 25 findings, half of which dealt with the Office of Unemployment Insurance (OUI).

Harmon explained that soon after the COVID–19 shutdown hit in March 2020, unemployment claims jumped through the roof.

Among the findings in the audit were that because of the volume of claims and new federal unemployment programs enacted, OUI leadership made decisions that violated federal law and sacrificed integrity in order to expedite payments.

“One of these changes, referred to as ‘Auto-Pay,’ allowed UI benefits to be automatically paid without requiring claimants to report the weekly wage information needed to determine whether they were eligible for benefits,” officials from the auditor’s office stated in a press release announcing the findings. Auditors noted that the change was implemented despite seasoned OUI and Commonwealth Office of Technology staff expressing concerns.

In addition, the audit noted that numerous unemployment claims were not processed in a timely manner.

“Additionally, OUI had archived more than 400,000 emails the office received through its UI assistance email account that remained unread as of November 9, 2020,” the press release stated.

The audit also found that the Auto-Pay system dispensed $17.8 million in traditional unemployment benefits, and more than $630 million in pandemic related benefits.

“While not all of these payments were improper, they were paid in a control environment highly conducive to improper or fraudulent payments,” the audit stated.

Harmon said his office is required to audit the state pension system every five years.

“It is a long way from being healthy,” Harmon said when asked the current state of the pension system noting that it is currently funded at 44 percent.

More information about the Auditor’s Office and State Auditor Mike Harmon is available online at www.auditor.ky.gov.