DENVER | An audit of Colorado’s unemployment insurance fund in Colorado could not verify the accounting of hundreds of millions of dollars in and out of the Colorado Department of Labor and Employment.
“The State of Colorado did not have an adequate methodology to substantiate the estimated amount of receivables and payables within the Unemployment Insurance Fund,” the audit said.
The audit means the state could not track $510 million received from the department’s employer premiums and through coronavirus relief aid, and was also unable to track $872 million in unemployment claims through the end of June, KUSA-TV reported Tuesday.
“Yes, our books on this were a little shoddy for the auditors, and we have gone back and addressed and we are working to make sure that this, again, does not happen,” department Chief of Staff Daniel Chase said.
The audit also said the department provided financial data that had errors after the audit deadline.
“We did make retroactive adjustments to our accounting books, but that was late, and again, that was using methodology that the auditors just didn’t quite agree with us on that,” Chase said.
The department received 548,000 unemployment claims from July 2019 to June 2020, about five years’ worth of work compared to the average 109,000 claims over the previous three years. Of the newer claims, 337,000 — or 60% — were filed from March 15 to April 30, 2020.
Chase attributed the discrepancies in part to changes in finance leadership and efforts to restructure and reorganize the department. The department lost its controller, deputy controller and multiple lower-level employees. It also launched a new system that was delayed, which led to more fraudulent claims.
The state has borrowed $930 million to prop up its unemployment insurance fund and is continuing to borrow to pay unemployment claims.
The fund is expected to be replenished through increase premium rates for employers and Chase estimated its balance will be positive in 2026.
“I don’t think employers ever feel good about giving us more money,” said Chase. “I do think that with all of the measures that we’ve taken at this point, even starting back in August before this audit took place, and moving forward since then, I think we can sow confidence in what we’re doing moving forward.”