Edited by: Fern Sidman
Thanks to a thorough investigation by the office of New York State Comptroller Tom DiNapoli (who just won re-election), it has been revealed that under the previous administration of disgraced governor Andrew Cuomo, the most expensive administrative mishap in state history occurred, according to a report in the New York Post.
From the time that the coronavirus pandemic emerged in April 2020 through March 2021, it was discovered during the investigation that a massive theft of unemployment insurance funds took place to the tune of at least $11 billion in fraudulent payments, as was reported by the Post.
The report indicated that currently employers are now paying back about $9 billion, plus interest, borrowed from the federal government to fund many of those bad claims.
According to the report from DiNapoli’s office, officials in the New York State Department of Labor could not provide supporting information to explain why the estimated fraud rate derived from the federal BAM program for the department’s traditional unemployment insurance increased more than threefold during 2020-2021.
In 2010 concerns were first raised about states using outdated equipment and software to administer unemployment claims, according to the Post report. The problems weren’t fixed, and the 2020 flood overwhelmed the Labor Department.
Faced with the high demand to process unemployment claims during this period, the Labor Department resorted to stop gap measures to compensate for system limitations which ultimately proved to be costly to the state, the DiNapoli reported revealed.
The Post reported that the agency’s workarounds paid people out of the wrong accounts, overpaid them in other instances, and opened the door to rampant fraud.
Labor Department officials also did not provide the number of claims that were actually paid to fraudulent claimants before being detected, the DiNapoli report indicated.
DiNapoli’s investigative team also discovered that Labor Department officials had gone rogue, repeatedly misleading legislators and the public, the Post reported. When Labor Commissioner Roberta Reardon addressed lawmakers in January 2022, she said the department had “prevented over $36 billion from falling into the hands of criminals.” Auditors, however, found that claim couldn’t be substantiated, according to the DiNapoli report.
When the auditors launched their investigation, the DiNapoli report indicated that there was a slow response to requests for information, sometimes taking as long as six months. This delayed the investigatory team having the ability to render findings and recommendations. Consequently, this posed a delay at the Labor Department to promptly address serious issues.
Even though New York’s 213 members of the state senate and state assembly are mandated to oversee state agencies and how they are managed, the Post reported that in recent decades, lawmakers have been reluctant to hold state agencies accountable, fearing retribution from the governor. If state lawmakers ignore DiNapoli’s findings, the employers now footing the bill for New York’s unemployment debt deserve to be more outraged with them than with the people who let $11 billion slip out the door, the Post reported.
This is not the first time that the comptroller has initiated an investigation on the operations of state agencies.
In March 2021, the Post reported that activists urged DiNapoli to investigate how former governor Andrew Cuomo handled the nursing home debacle during the Covid pandemic.
In March of 2020, a directive was issued by the governor for nursing homes to accept coronavirus patients and this resulted in thousands of deaths from the spread of the virus.
According to the Post report, in a letter written in 2021, the activist group known as “Voices for Seniors” raised questions that included “How and why did the governor’s administration issue the March 25 order?” to admit COVID-19 patients and “Were there financial considerations in that decision?”
It also asked, “Who wrote Governor Cuomo’s ‘book’ and did they do so on the state’s dime? Are there communications between the governor and the publisher that establish a profit motive for the coverup? If so, can the state re-capture the $1M advance that the governor reportedly received or any other profits from the sales?”
