Auditor Mike Harmon: Fraud Remains an Issue with Kentucky’s Unemployment Insurance System



Mike Harmon, Kentucky’s 47th State Auditor of Public Accounts, today released Volume 1 of the Statewide Single Audit of Kentucky (SSWAK) for Fiscal Year 2021, which includes 19 findings. Of those 19 findings, nine relate to issues identified by auditors with Kentucky’s Office of Unemployment Insurance (OUI) and the Unemployment Insurance (UI) system.

“Last year, our auditors detailed issues within OUI ranging from ‘auto-pay’ and the problems it created, to IT security concerns including employees having access to remove stops on their own accounts ,” said Auditor Harmon. “While some things appear to have improved, particularly with internal controls, this year’s SSWAK report confirmed multiple instances of fraudulent claims within the UI system. OUI failed to fully implement controls to detect fraudulent activity, which resulted in many claimants receiving payments before OUI flagged them as potentially fraudulent and stopped further payments.”​