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Pennsylvania

Audit rips accounting in Pennsylvania jobless benefit system

| Tuesday, April 25, 2017, 9:27 p.m.
State Auditor General Eugene DePasquale
Lillian DeDomenic | For The Tribune-Review
State Auditor General Eugene DePasquale

HARRISBURG — State auditors said Tuesday that sloppy record keeping made it impossible to determine if the Pennsylvania Department of Labor and Industry properly spent millions of dollars in recent years on an unemployment compensation system that melted down during a funding fight.

Auditor General Eugene DePasquale said the state spent nearly $180 million under a 2013 law designed to improve the services at state unemployment compensation centers, but the money was commingled with other spending. He said most of the money probably went to pay employees.

“They dumped all the money into one fund,” said DePasquale, a Democrat, making it “nearly impossible for us to do an independent assessment.”

The department laid off nearly 500 workers and closed three of the eight service centers in December after Senate Republicans blocked a new round of funding over concerns about propping up an inefficient system. By January, nearly all calls to the centers generated busy signals, and those who did get through faced long waits that sometimes dragged on for hours.

“This level of service is completely unacceptable, and a lot of people were left wondering why these three particular service centers were shut down,” DePasquale said at a news conference.

Sen. Scott Wagner, a York County Republican who has been an outspoken critic of how the system is operated, said afterward that additional funding will be a hard sell without massive changes and improved accountability.

“This is more garbage. We are going to be back here four years, five years, six years from now,” Wagner said. “If you allow the same people to be involved who wasted all the money, it's going to happen again.”

Democratic Gov. Tom Wolf on Monday signed a law providing $15 million for the system as a short-term fix. Wolf said he planned to rehire about 200 of the laid-off employees and reopen the Altoona service center next month.

Wolf spokesman J.J. Abbott said the department has already addressed some of the issues in DePasquale's report by changing personnel and accounting practices and “finally holding IT contractors accountable.”

“We must never repeat the failure on the part of the Senate to fund the system in November 2016 that created a chaotic and disastrous situation for nearly 500 (Labor and Industry) employees and tens of thousands of unemployed Pennsylvanians seeking benefits,” Abbott said. “A long-term funding solution is necessary to fix the legacy problems outlined by the auditor general.”

The two top-ranking Senate Republicans, President Pro Tempore Joe Scarnati and Majority Leader Jake Corman, said the $15 million was designed to give them time to determine the next steps.

“But the audit does leave us asking — if the auditor general cannot account for this money and the spending, then who can?” they wrote in a statement.

DePasquale said the Labor and Industry Department needs tens of millions to rehire workers and pay for current operations and about $64 million for a new computer system.

“To say that it is being held together with bubble gum would be an insult to bubble gum,” he said.

He warned against going to a system that's entirely online because not everyone has internet access.

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