Earlier this month I wrote an article on how the Nebraska Department of Administrative Services has been unable to account for $10.5 billion in State expenditures. $10.5 billion is more than the State’s annual budget for two whole years. One of the major players in this accounting fiasco has been the Nebraska Department of Labor. So, today I would like to show you some examples of how the Nebraska Department of Labor accounts for the way it spends your taxpayer dollars.

On April 28, 2022 Charlie Janssen, the State Auditor, wrote a letter to John Albin, Commissioner for the Nebraska Department of Labor, which highlighted several of the Department’s accounting errors. As you will see, many of the Department’s accounting errors amount to a basic lack of common sense and should have been easy for the Department of Labor to fix. In each of the cases I will highlight below, the Department of Labor was unaware of the problem until it was pointed out to them by the State Auditor.

The Nebraska Department of Labor oversees unemployment insurance benefits for all eligible unemployed workers in our State. According to Nebraska State Statutes inmates are ineligible to receive unemployment benefits; however, the State Auditor identified 35 inmates who had received unemployment benefits while incarcerated during FY 2020 and FY 2021. Out of the ten highest paid inmates who received benefits four were never investigated or adjudicated. Of the remaining six, it was found that their cases had been incorrectly adjudicated. Altogether, these ten inmates cost the State of Nebraska a total of $64,966.

Another group of individuals who were ineligible to receive unemployment insurance benefits were deceased claimants. The State Auditor stated in his letter to the Commissioner that, “The Department lacked adequate procedures to identify deceased individuals prior to benefits being paid.” The State Auditor identified 13 deceased claimants for FY 2020 and FY 2021 totaling $71,320.

Next, the State Auditor looked at individuals who received unemployment insurance benefits who were employed by the State of Nebraska. After looking at 77 cases it was found that 23 claimants improperly received the benefits totaling $87,973. This prompted the State Auditor to write in his letter to the Commissioner, “The Department’s process for identifying State employees who were also receiving benefit payments appeared to be not only time consuming but also ineffective.”

The State Auditor also looked into six claimants who were under the age of sixteen. Both State and Federal laws prohibit those under the age of sixteen from receiving unemployment insurance benefits. The Department paid these underage claimants a total of $70,704. In one case, the State Auditor pointed out how the claimant claimed to be a concrete mixer truck driver, but to be a truck driver of this kind requires a commercial driver’s license, and in the State of Nebraska one has to be at least 18 years old to get a commercial driver’s license.

All in all, the State Auditor found a total of $1.67 billion in accounting errors by the Nebraska Department of Labor for FY 2021. In his letter to the Commissioner, Charlie Janssen indicated that similar findings had been noted in a previous audit of the Department. So, it appears that these kinds of problems are being allowed to persist without any kind of corrective action being taken by the Commissioner of Labor, the Department of Administrative Services, or by the Governor. The State Auditor’s letter to John Albin is available to the public and can be found on the State Auditor’s website.