BATON ROUGE, La. – Louisiana wants thousands of state and local government workers to send back $10 million in unemployment pay they received while still collecting regular pay after Hurricane Katrina.
A state audit found lax control by the state Department of Labor was the main reason the 5,439 ineligible workers were able to collect up to $258 a week, Legislative Auditor Steve Theriot said.
Administrative workers with the City of New Orleans received the most money with 2,233 wrongfully collecting $4.3 million. There were 1,638 state workers, many with the state Department of Health and Hospitals, who got $2.7 million.
The money was a small portion of the overall $560 million the department pay out in unemployment benefits to public and private workers in the four months after Katrina.
With residents spread nationwide and difficult to contact, state labor officials suspended the requirement for unemployment applicants to contact the department weekly to verify they are looking for jobs and to report any earnings, said assistant Labor Secretary Marianne Sullivan.
She said the agency suspended the call-in rule for 12 weeks based on meetings with officials from the governor's office, the Louisiana Association of Business and Industry, the state AFL-CIO and the Council for a Better Louisiana.
The department has gotten back $3.3 million of improper payments so far, mostly from unused benefit debit cards. It seems unlikely the state will get all the money.
Some recipients interviewed by Theriot's office said they had notified the Labor Department they were working. Others said they were entitled to the money as disaster relief. One said he couldn't recall applying for the benefits and spent the unemployment aid without realizing from where it came.
State labor officials will not pursue fraud charges against those who got the extra unemployment money unless there is strong evidence that applicants tried to defraud the state.