DES MOINES, IOWA — An audit of Iowa Workforce Development found the agency paid nearly a quarter-million dollars in unemployment benefits to Iowans who were behind bars and others who had died. The payments happened in fiscal year 2020 in the early days of the COVID-19 pandemic, according to the report.

The audit found that eight people who were paid unemployment benefits were incarcerated at the time – obviously making them ineligible. Those eight people were paid $113,813. The audit also found six instances where benefits were paid to someone who died – a total of $124,698 in ineligible payments. IWD responded to both findings in the audit, saying they have tightened screening protocols.

The payments all happened at the beginning of the pandemic when IWD was flooded with new claimants as much of the country shut down. “Certainly the people at Iowa Workforce Development had a massive influx of claims and had a lot more work to do than usual. I think its a fair question to ask why the state didn’t put more resources into Iowa Workforce Development to make sure this money didn’t go out,” Sand said.

Instead, Sand argues that by properly staffing themselves before and during the pandemic, the state would have saved money. “You could have one or two more people there doing the work and their salaries would have more than paid for themselves potentially by preventing these payments from being made.”

Sand says that federal authorities will continue to investigate the improper and potentially illegal payments made by IWD.

Another concerning item highlighted by the audit was the lack of background checks for IWD employees. Employees who work in information technology and those who handle cash were hired without background checks. Sand says IWD is already implementing a new system to address its lack background checking system.

“What we’re trying to do is make sure that Iowa Workforce Development has better systems in place to prevent waste, fraud and abuse,” Sand says.

IWD released this statement in response to the audit:

Like every state across the country, IWD responded to an unprecedented level of unemployment claims during the pandemic by pulling staff away from other duties to focus on paying needed claims. (For details of this response, please see page 14 of the report (p. 18 of the pdf).) Our focus was on helping Iowans.

Please note that the improper payments of federal money in FY2020 ultimately represented .01 percent of the more than $2.2 billion IWD paid out that year. As the report notes, we already have taken steps to address this situation and since that time have implemented safeguards that have improved IWD’s systems across the board.

Since the auditor first released these results on Nov. 15, 2021, the U.S. Department of Labor has accepted IWD’s explanation for the questioned expenses and ruled that the money will not need to be paid back.