We examined overpayments the Department of Labor (DOL) classified as non-recoverable during the period August 1, 2010 through January 31, 2011 to determine if DOL correctly classified those overpayments in accordance with the New York State Unemployment Insurance Law, the Federal Supplemental Appropriation Act of 2008, and the American Recovery and Reinvestment Act of 2009. We found DOL incorrectly classified between 21 percent and 31 percent of regular Unemployment Insurance Benefit and Extended Benefit overpayments as non-recoverable, totaling between $3.44 million and $5.04 million. We also found DOL incorrectly classified $765,411 in Emergency Unemployment Compensation Benefit (EUC) and Federal Additional Compensation Benefit overpayments as non-recoverable. Once DOL classifies an overpayment as non-recoverable, no attempt is made to recoup the overpayment.
DOL has policies and procedures for classifying overpayments. However, incorrect classifications occur because staff: (i) does not receive appropriate supervisory oversight to ensure they classify overpayments correctly, and (ii) lacks appropriate training for classifying and processing overpayments. In addition, although Federal law prohibits classifying EUC Benefits as non-recoverable, DOL did not have an exception report to identify EUC overpayments classified as non-recoverable for supervisory review.
For a complete copy of Report 2009-0370, click here.