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Legislative Post Audit Uncovers Alarming Failure by Kansas Department of Labor
January 26, 2007; For Immediate Release
For Information Contact:
Rep. Peggy Mast 785/296-7685
Rep. John Grange 785/296-7655
Rep. Steve Brunk, 785/296-7645

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Topeka - The Legislative Division of Post Audit presented its findings today to the Joint Legislative Post Audit Committee regarding the Kansas Department of Labor's administration of the state's unemployment insurance program. Some of the post audit findings included:

  • Kansas has the nation's highest overpayment rate in 2003, 2004, and 2005.

  • The Kansas Department of Labor issued $115.2 millions in overpayments in 2005; 45% of the $256.1 million paid out in unemployment insurance were overpayments.

  • Kansas Department of Labor's is responsible for a 29% increase in overpayments since 2002.

  • Dept of Labor Secretary Jim Gardner widened the loophole that allows some individuals receiving unemployment to abstain from Job Services registration. The regulation is contrary to Kansas law, which requires the Job Services registration of every person receiving unemployment insurance.

  • Of the 486 benefit payments reviewed by LPA Investigators, 232 or 47% were flawed.

    Joint Committee Chairman Rep. Peggy Mast said she was stunned and concerned by what she learned. "The post audit findings lead me to believe we are failing Kansans who need our help the most and failing Kansas businesses by not being good stewards of the money they pay into the unemployment insurance fund," said Chairman Mast. "Unemployed Kansans needs more than a temporary handout -- they need a hand up to a good paying job."

    Fellow Joint Committee member Rep. John Grange said lawmakers and Kansans need to look carefully at the findings of the audit and then at the Department of Labor's response. "I was amazed by the cavalier attitude of Secretary Gardner, saying the non compliance with state law had been going on since 1980 and he didn't think it necessary to change the way things were done,” said Rep. Grange. “Based on the numbers found by LPA under Gardner's watch, I believe a change is absolutely necessary. I trust we will have another opportunity to question the department and Secretary Gardner."

    Rep. Steve Brunk, chairman of the House Commerce and Labor Committee said he is extremely disappointed by how poorly state agencies are executing their responsibilities and managing state resources.

    "This audit illustrates the pressing need for comprehensive reform of our unemployment insurance and job training programs," said Rep. Brunk.

    Chairman Mast and Chairman Brunk said the problems brought to light today will not go unaddressed. Their House committees will review the audit in-depth and make recommendations for broad reform.

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