TOPEKA, Kan. (AP) — Kansas lawmakers hope that a legislative audit to be released later this week will provide an estimate of how much the state has paid out in fraudulent claims for unemployment benefits during the COVID-19 pandemic.
Republicans in the GOP-controlled Legislature remained frustrated Monday with the lack of an estimate from the state Department of Labor for the potential cost of bogus unemployment claims. Their focus on potential fraud has intensified in recent weeks, and they’ve expressed concern that employers, who pay taxes to finance benefits, will be stuck with covering the cost of bogus claims until scammers are caught.
Potential fraud is among multiple problems the Department of Labor has faced in administering both regular and extra pandemic unemployment benefits. Democratic Gov. Laura Kelly and department officials have blamed problems on decades-old computer technology, and she said the department hopes to begin work on upgrades by the end of this year.
The department shut down its unemployment system from Jan. 30 to Feb. 2 so that it could install new security protocols aimed at preventing fraud. It reported last week that it was blocking the equivalent of three fraudulent log-in attempts a second by scammers or internet bots.
Kelly told reporters during a Statehouse news conference that Kansas has blocked 500,000 bogus claims that could have cost the state $22 billion. Her office later clarified that the figures were pandemic totals.
However, Kelly declined to give an estimate for how much the state has paid out in fraudulent claims, even as she dismissed figures from legislators as high as $700 million.
“I’m doing everything in my power to fix things now,” Kelly said. “We cannot lose sight of what happens when we do not maintain and modernize our infrastructure.”
The Legislature’s nonpartisan auditing division plans on Wednesday to release the first of two reports on the problems at the Department of Labor, focusing on the types of fraud it has encountered. The second report is due in June.
“We have not been to get really good estimates from the Department of Labor,” said Republican Rep. Kristey Williams, of August, the chair of the legislative committee that oversees the auditors’ work. “This is going to give us a good baseline to work from.”
Republican legislators have been at odds with Kelly for months over the state’s response to the pandemic since COVID-19 reached Kansas in early March 2020. Kelly last week attributed GOP lawmakers’ intensifying criticism of the Department of Labor to an effort to “just laying the groundwork” to try to prevent her reelection in 2022.
Unemployment claims spiked last spring after Kelly imposed a statewide stay-at-home order, and then again late in the year when Kansas saw its worst surge in new cases of the pandemic. GOP legislators worry that the state became a target for scammers.
Kelly has repeatedly argued that her Republican predecessors underfunded the Department of Labor and neglected its computers. She has included $37.5 million in her proposed budget for technology upgrades. She also is asking congressional leaders to provide aid to states for such modernizations.
The Legislature’s research staff said in a short memo to lawmakers in January that the state spent about $51 million on upgrading the department’s computers from 2004 until the project was canceled in December 2011 under Republican Gov. Sam Brownback. Some Republicans worried at the time that the project was plagued by wasteful spending, and the memo said the project was canceled with “approximately half” of the work completed.
But Kelly, a former legislator, said she remembers, “There was money that hadn’t been spent. They didn’t want to spend it.”
GOP lawmakers also have criticized Kelly over what they see as too slow a distribution of COVID-19 vaccines.
