Audit finds NJ lost millions by not using own unemployment program during COVID-19
A new state auditor's report found labor department officials lost New Jersey millions of dollars amid the COVID-19 pandemic through a failure to use their own program.
The report released at the end of September revealed the state could have saved as much as $20.5 million in the summer of 2020 if thousands of eligible unionized state employees had been enrolled in New Jersey's Shared Work Program.
Signed into law by Gov. Chris Christie in January 2014, the program allows workers to receive some unemployment benefits when employers implement an aggregate reduction in work hours in lieu of layoffs. During the COVID-19 pandemic, the program was fully funded through the CARES Act. However, not all eligible employees were enrolled.
David J. Kaschak, the state auditor, in his report said the state labor department's oversight involved 18,245 union members who received more than $20.5 million in unemployment insurance benefits that were eligible for federal reimbursement. The claims took place in the summer of 2020 after state officials finalized an agreement with Communications Workers of America affiliated workers that mandated furloughs to avoid layoffs.
The state government was not the only organization to miss out on the program, records show.
Through an analysis of unemployment insurance claims from April 2020 to August 2021, the state auditor's office found 973 employers who could have enrolled in the program amid the pandemic. Those employers had 30,280 claims totaling more than $181 million, all of which came from the state's Unemployment Compensation Fund when they could have been offset by federal government sources.
"If 20% of those employer claims could have been converted to the [Shared Work Program], the Unemployment Compensation Fund could have saved approximately $36.3 million," the report stated.
New Jersey: Grand and contentious, the world's largest Hindu temple opening in NJ
NJ: Federal monitor to oversee revamp of troubled veterans homes, Murphy announces
Kaschak and New Jersey Department of Labor officials said failures came with the delay in marketing the Shared Work Program when the pandemic hit. Promotional videos and webinars were not ordered until August 2021 and not posted on the department's website until October 2022, records show. By then, the program had long lost its full funding support from the federal government.
Beyond the Shared Work Program, the audit identified several other weaknesses in the state's management of the unemployment insurance fund during the COVID-19 pandemic. Chiefly among them was the unemployment insurance division’s lack of oversight and monitoring over the unemployment benefits call center it contracted in 2020 to handle an influx of calls.
The dissemination of inaccurate information, a high call abandon rate and a slow average speed of response were all cited. In total, the call center run by Navient cost the state $51.8 million between June 2020 and its closure in June 2022. Records show the center received nearly 8.2 million calls from June 2020 through April 2022. Only 37%, about 3 million calls, were answered.
This article originally appeared on NorthJersey.com: NJ lost millions by not using own unemployment program during COVID-19
