The D.C. Department of Employment Services faced immense scrutiny during the pandemic, as frustrated people who had lost their jobs complained the city agency was slow in doling out unemployment payments and offered conflicting information about their claims. The chorus of concerns grew so loud that by May 2021, the District’s Office of Inspector General announced that it planned to audit the agency’s ability to process claims.
Nearly two years later, the inspector general sided with those complaining, saying in a report issued Thursday that D.C’s employment services agency could’ve done more to mitigate some of the frequently cited issues.
Like other state employment agencies, the Department of Employment Services saw a historic surge in unemployment applications during the pandemic, and agency officials have previously acknowledged they struggled to keep up with demand and mitigate fraud as they implemented new federal programs. The inspector general’s report said officials failed to live up to their own goals for distributing initial unemployment benefits, and maintained inadequate documentation for some claims.
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“DOES had to adapt quickly to address the surge in calls, manage the increase in unemployment benefits claims, and implement technology updates in response to new and updated federal benefit programs,” the report said. “We consider the amount of time DOES took to implement the federal pandemic programs as reasonable. However, DOES lacked sufficient oversight and an effective [unemployment] technology system to respond to and promptly process benefit claims.”
In its responses to investigators, the Department of Employment services disagreed with the majority of the inspector general’s recommendations, but also said the agency is launching a revamped unemployment system this year. A spokeswoman for the Department of Employment Services said the agency had no additional comment on the report.
The inspector general acknowledged the city agency made attempts to reduce wait times related to unemployment benefits, but found it did not consistently meet its own goal of distributing initial payments to new claimants within 21 days of filing. In a random sample of 166 unemployment claims made between April 2020 and September 2021, 108 of which had benefits approved, the inspector general found that just 33 people received their first payment within the 21-day goal.
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The inspector general also alleged that the Department of Employment Services inadequately maintained case notes and documentation related to some unemployment claims, “which may have resulted in call center representatives having limited information to provide to callers.” More broadly, the report said, insufficient supervision fueled lags in issuing benefits and investigating applications of those deemed ineligible.
The agency is supposed to seek wage documentation from claimants who are determined to be monetarily ineligible for benefits, according to the inspector general’s report. But investigators found that officials did not investigate missing wages for 37 of 60 monetarily ineligible claims that were reviewed during OIG’s probe. Investigators said this was in part because the agency failed to ensure staff was consistently taking that step.
“Without conducting wage investigations as required, DOES may have improperly denied benefits” to the 37 claimants, the report says, noting that the agency had not provided any evidence those people were instructed to fix possible issues.
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In written responses, the employment services agency shot back that certain programs, like Pandemic Unemployment Assistance, are not subject to the 21-day benchmark for initial payments. The agency also argued that some claimants with issues were unresponsive to the agency’s follow-up, or applied for benefits with incomplete applications.
“During the period in question, monetarily ineligible claimants were instructed to contact the agency if the determination was incorrect,” the agency wrote. “It is the claimant’s responsibility to identify, correct, and inform DOES of any inaccuracies for their wages that are detected by the system.”
The Labor Department offered grants and other pandemic-related funds to help state employment agencies handle the increased volume and combat fraud. According to the inspector general report, the D.C. employment agency received 20 Labor Department staffers to boost its number of claims examiners to 58. It also spent $34.6 million on a contractor, who is not named in the report, to bolster call center operations and reduce wait times.
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But the report said that the city agency did not collect time sheets for the contracted call center, raising questions about whether it actually fulfilled the terms of the contract. The call center agency also billed the District about $230,000 in credit card processing fees, a payment that the inspector general said should not have been approved without additional authorization from a contracting officer.
The employment services agency has since asked the city to audit that vendor and determine if the agency may have paid for services that it did not receive from the contractor, according to the report.
The inspector general recommended that Unique Morris-Hughes, who directs the city employment services agency, take steps to strengthen staff supervision and improve workflows to expedite unemployment claims. But in a written response, the employment services agency disputed 10 of the inspector general’s 12 recommendations — only co-signing suggestions related to the agency’s information management system.
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In some cases, the employment services agency said, the inspector general’s suggestions were misguided because the recommended procedures were already in place.
In February 2022, D.C. Auditor Kathy Patterson announced that she was launching a separate review into overtime practices at the employment services agency. Weeks earlier, several former employees filed a lawsuit against the agency alleging that they were not properly paid for working extra hours during the pandemic.
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