Delaware’s Departments of Labor and Finance delivered a report to legislative leaders outlining an embezzlement of over $180,000 from the unemployment compensation fund in 2023. The report cites inadequate internal controls, outdated financial systems, and underfunding as contributing factors to the theft, exacerbated by the challenges brought on by the COVID-19 pandemic. The report reveals a lack of resources and staffing in the unemployment insurance office, leading to a delay in detection of the theft.
The report details efforts to modernize systems and technology within the unemployment insurance department, with state officials allocating $60 million of ARPA funds for this purpose. The report also highlights legislative changes aimed at preventing future thefts, including implementing ongoing background checks and enhanced ethics training for employees.
Following the incident, House Democratic leadership issued a statement calling the incident troubling but isolated, with steps taken to strengthen department infrastructure. However, Senate Majority Leader Bryan Townsend questions the delayed reporting of the theft to the General Assembly and calls for a reevaluation of laws to ensure timely reporting of such incidents.
The report also outlines steps taken to recoup the stolen funds, including efforts to liquidate assets from the estate of the former employee responsible for the theft. While the report acknowledges challenges faced by the department, it emphasizes the need for government investment to ensure efficient services and prevent similar incidents in the future. Townsend suggests further discussions on potential legislative changes may occur when the legislative session resumes in January.
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