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Comptroller General calls FBI on Employment Security Commission

Staff Report
Published Feb. 12, 2010

Out of “an abundance of caution,” Comptroller General Richard Eckstrom Tuesday contacted the U.S. Inspector General’s office and the FBI regarding irregularities in the S.C. Employment Security Commission’s accounting practices of stimulus funds used to pay federal extended benefits, said R.J. Shealy, spokesman for the comptroller general.

Eckstrom announced his actions during Gov. Mark Sanford’s cabinet meeting Tuesday. Eckstrom’s decision to contact the Inspector General and the FBI came after conducting a spot check on the agency to see if the agency was recording stimulus funding properly.

Comptroller General Richard EckstromShealy said the Comptroller General last year talked about the need to properly code the stimulus funding. Not doing so “heightens the opportunity for waste and abuse,” he said.

Since the agencies were contacted, the ESC released the information indicating it had received $688 million, which was not properly recorded, Shealy said.

J. William McLeod, chairman of the ESC's three-member commission, said in a written statement that the commission was surprised by the comments.

"In fact, the commission has been working with the Comptroller General's staff and hand delivered the requested information this morning. We had staff members working over the weekend on this matter, and were in constant contact with the Department of Labor and the State Comptroller General's office."

McLeod also stated that "The Commission has been informed by the U.S. Department of Labor that the programming problems experienced by the agency are no different than the difficulties faced by other states."

In a letter to Unemployment Insurance Deputy Executive Director Allen Larson, Region 3 UI Director Dianna Milhollin said like most states in the country, the ESC, "has had considerable difficulty in programming and properly reporting for the stimulus funding received for both program and administrative funding for the UI program."

Milhollin acknowledged that there have been many discussions between the S.C. Employment Security Commission and the Department of Labor since last fall, and that the reporting has been "complicated” because federal extension funding for benefits and administrative costs have been paid with stimulus and non-stimulus funding sources based on whether or not the claims were filed on specific dates.

Milhollin said that South Carolina is not alone in facing this problem.

"Additionally, many states, have had difficulty programming the IT changes needed for this reporting with the many complicated IT changes required by the numerous federal extensions and changes with both state extended benefits and federal extension benefit claims," she said.

However, the Department of Labor "has received nothing but cooperation" from the commission and staff in trying to discuss the difficulties the agency is experiencing in an effort to properly and timely report extended benefits, Milhollin said.

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