TRENTON – Two bills sponsored by Senate Labor Committee Chairman Fred H. Madden to strengthen the unemployment claims processing system in New Jersey in order to help safeguard benefits for the unemployed were approved today by the committee.
The bills would implement recommendations made by the state Auditor in 2013, after an audit found widespread access to the state’s primary unemployment claims system, including people who had left state employment. A separate audit found that some businesses were sending certain payments meant for the unemployment system to the Department of Labor instead of the Division of Revenue in the Department of Treasury. Those payments in some cases were then being hand delivered to the division, increasing the risk of lost payments.
“The vulnerabilities found within the system increased the potential for theft or loss of funds intended to be used for the payment of unemployment insurance benefits,” said Senator Madden (D-Gloucester/Camden). “By making commonsense changes, we will improve the integrity of the UI system and better safeguard benefits that residents depend on to take care of themselves and their families when they find themselves out of work.”
The first bill (S2414) would require the Department of Labor to establish a procedure for the quarterly review of personnel access rights to the department’s primary system for unemployment claims receipt and processing. The procedure would have to include an evaluation of employee access to the system and the adjustment, addition, or deletion of access rights based on the review. Highlighting the importance of this change is the April 2014 theft conviction of a DLWD unemployment insurance clerk who was found to have stolen $21,055 in unemployment benefits between June and September of 2013. The employee used her position to access LOOPS and redirect benefit money from individual claimants into her personal bank account.
The second bill (S2415) would clarify that all payments, reports and receipts from employers related to the unemployment compensation program must be submitted directly to the Division of Revenue in the Department of the Treasury.
“These critical improvements will strengthen the system and help reduce the risk of errors, fraud, misuse, or theft of unemployment funds,” said Senator Madden. “By doing this, we will help the UI system remain solvent and safeguard the funding that New Jersey’s unemployed rely upon to make ends meet.”