Democratic State Auditor Nicole Galloway on Tuesday announced her office identified roughly $2 million in potential inaccuracies in Missouri's financial reports of its unemployment insurance program.
Galloway's office pointed to a new, more than $40 million tracking system for the program as the root of several financial reporting problems. According to the audit, the system was not fully developed or tested before it was put into place in November 2016.
The audit found that as a result, the Department of Labor and Industrial Relations, which oversees unemployment benefits, produced inaccurate or late financial reports.
"Businesses throughout Missouri pay millions into the unemployment system, which is why it is so disconcerting to find that there are funds being managed without proper oversight or accountability," Galloway said in a statement. "Even simple checks and balances have not been implemented, leaving the Department of Labor unable to accurately provide basic financial information."
The audit says there were about $2 million in errors in reports of employer accounts receivable balances, including both understatements of balances and discrepancies in reporting. Problems with the new system also led to at least $134,000 in overpayments to unemployed people who had already maxed out their benefits, according to the audit.
Labor Department spokeswoman Tammy Cavender said in a statement that there were issues with the new computer system "as is to be expected with large-scale modernization projects."
"In regards to the auditor's findings, while there may have been some hyperbole in the press release describing the scale of the issue, we appreciate her interest in this," Cavender said. "The Department has already completed fixing most of the issues, and is in the process of fixing the remaining issues."
The findings are part of an annual audit of how state agencies federal money. It covers the fiscal year than ran from July 2016 to June 2017, which spanned the administrations of both former Democratic Gov. Jay Nixon and current Republican Gov. Eric Greitens.
