Kansas lawmakers push for more answers on fraud, oversight with state’s department of labor

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TOPEKA, Kan. (KSNT) — Frustrated with a high volume of unemployment fraud reported by the state’s unemployment office, Kansas lawmakers are demanding more oversight with the Kansas Department of Labor.

Lawmakers met with the department in a House Commerce committee meeting Wednesday, to get an update on its implementation of new security measures and to get answers to questions they’ve received from concerned, unemployed Kansans.

According to Governor Laura Kelly, who addressed the ongoing issues with the state’s unemployment office at her weekly press conference, as of Wednesday, the department’s new security system has stopped more than 600,000 fraudulent BOTS and login attempts.

House Commerce committee chair, Representative Sean Tarwater, R-Stilwell, said while the new system seems to be working, there are other concerns that have yet to be addressed by the department.

“There’s so many people out there that haven’t gotten paid since March that deserve to be paid,” Tarwater said. “And they’re losing their homes, they’re losing their cars, and they can’t feed their kids. It’s a big problem, and those are the people, we need to get to.”

The committee heard from small business owners who’ve been affected by the fraud the state’s department of labor is dealing with.

Micki Debbrecht, a director of a small surgical practice in Wichita, detailed her struggle with having to notify employees of their private information, like social security numbers, being stolen. Debbrecht said about 38% of her staff has been affected so far.

To reassure employees, Debbrecht’s company went through the process of filing a cyber claim, going through the expense of having an additional company and some attorneys come in to look at their system and ensure their data points were not accessed.

“It’s a very violating feeling to know that your social security number is floating out around there,” Debbrecht said. “It’s still a little bit of an uneasy feeling for me to not be unable to tell them, you’re protected, or you’re okay, because I can’t answer that question for them.”

Debbrecht said many of her employees who have been impacted have gone to the extent of purchasing additional identity theft coverage. She said to purchase coverage for all employees would raise a significant financial burden for the company.

Rep. Tarwater brought up the issue of people receiving 1099-G tax forms from the department, despite not having applied for unemployment. Tarwater asked how many 1099 forms were flagged by the department.

Brett Flaschbarth, acting secretary of KDOL, could not provide a specific number but said a “substantial portion,” “in the tens of thousands,” were flagged, promising to get back to the committee with an exact number.

Tarwater told Kansas’ Capitol Bureau that many of the legislators on the committee suspect transparency issues in the department’s communication.

“Either they don’t know, or they do know, and don’t want us to know…either way we’re in big trouble,” Rep. Tarwater said. ” If we can’t get the truth, we can’t fix the problem.”

The committee plans to have a hearing on a bill on Thursday, addressing the implementation of an updated computer system for the state’s labor department. The project’s set to be completed in 2022. 

In the meantime, the Legislative Division of Post Audit is conducting an audit to get more answers to the issues the department’s experiencing with paying out fraud claims and delayed unemployment payments.

Tarwater said lawmakers are expecting to receive those answers sooner, by the end of February.

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