Staff Reports
A state audit released this week found major problems in North Carolina’s unemployment system. The Office of the State Auditor says $47.2 million of the state’s established overpayments were classified as fraud during the audit period. The report also says the improper-payment rate averaged 22 percent — more than double the federal warning level. Those facts land squarely on the table as U.S. Senate candidate Roy Cooper faces voters and critics demand answers.
What the audit actually found
The follow-up audits examined Division of Employment Security (DES) activity and found $168.8 million in established overpayments for the audit window. Of that total, $47.2 million was labeled fraud and $121.6 million was non-fraud. DES recovered about $49.1 million overall — roughly 29 percent — and recovered only about $12.1 million of the $47.2 million classed as fraud. The auditors estimated the improper-payment rate at 22 percent, up from an 18 percent rate in the prior audit and well above the U.S. Department of Labor’s 10 percent threshold. State Auditor Dave Boliek called the situation unacceptable and urged faster action.
Where the system failed — and who was slow to fix it
Delayed fixes after a federal grant
The audit highlights specific program failures. Work-search errors caused roughly half of the overpayments. DES received a $6.8 million federal grant to improve controls, including an online work-search repository, but full statewide implementation did not happen until more than three years after the grant was awarded. DES’s official response says it agrees with the recommendations and needs proper funding, staff, and technology to fix problems. The audit, however, faults both DES and the Office of the Governor for a lack of urgency in addressing the mess.
Politics and accountability: why voters should care
This is not just accounting jargon. The Division of Employment Security sits under the Department of Commerce, which falls to the governor’s office. U.S. Senate candidate Roy Cooper served as governor during much of the audit window, and the report points to slow action coming “through the Office of the Governor.” That makes this an obvious campaign issue. Republican U.S. Senate candidate Michael Whatley and others will rightly press for answers: Who was responsible? Why were so few fraudulent payments recovered? And how many improper payments went to people ineligible under state law, which defines ineligibility to include those not in satisfactory immigration status?
Fix it, explain it, or face the voters
Taxpayers and jobless families deserve a system that pays benefits correctly and stops fraud fast. The audit lays out clear fixes. Now state leaders and the Cooper campaign should explain what went wrong and what they will do to prevent a repeat. If the response is more excuses about funding and staffing, voters should treat that as exactly the kind of weak oversight this audit exposes. In a tight Senate race, answers and accountability matter — not just for headlines, but for the budget and for the people who rely on benefits done the right way.
