FRANKFORT, Ky. — The Kentucky State Auditor issued a scathing report of Kentucky’s unemployment office Tuesday, detailing several issues where the office either broke federal law or failed to account for benefits.

“I just think, overall, there was a systemic failure in leadership,” State Auditor Mike Harmon said.

Harmon says early on in the pandemic, the state paid out benefits automatically, and because there weren’t any checks on who was eligible for benefits, it’s impossible to tell just how much money should have gone out.  

“The best of intentions ended up creating more problems,” Harmon said.

Even after the auto-pay system was eliminated — after two weeks for general unemployment and eight weeks for the federal pandemic unemployment assistance program — Harmon says the unemployment office still couldn’t give a proper estimate for how much money still needed to be paid out.

“If you don’t know how much you owe, it’s going to be difficult — especially since we’re in a budget session with the General Assembly — it’s difficult to budget to that if you don’t know how much you’re still going to owe,” Harmon said.

The audit also found 400,000 unread emails sent to the unemployment assistance email account as of Nov. 9 and issues with data breaches that weren’t properly reported.

There are 25 total findings in the audit, some of which are unrelated to the unemployment office. The full report can be read here.

As part of their investigation, auditors picked 37 state employees who filed for unemployment benefits during the period the auto-pay system was being used. None of them were eligible for benefits due to their salaries, but 16 received benefits, totaling $116,000.

Gov. Andy Beshear said he relied on guidance from the federal government throughout the process. He also echoed prior comments he made criticizing past leaders for neglecting the unemployment office.

“You cut and cut and cut the safety net, like the previous administration or previous General Assemblies did, you leave us 90-something people short, the budget almost cut in half, all the local offices closed and an IT system that should have been replaced 10 years ago — and then all of a sudden, you have the most filings ever, ever on top of that — you’re set for the perfect storm,” Beshear said.

And with the emails, Amy Cubbage, lead attorney for the governor’s office, says the office had to prioritize what they could get done.

“While we want to be responsive to emails and to anyone who is reaching out for help, we have limited staff so we had to make sure that we were working the claims in the most efficient way possible,” Cubbage said.

According to numbers the Kentucky Labor Cabinet provided to Spectrum News this week, there are 102,000 unresolved unemployment claims. More than half of those have been flagged for a possible fraud or identity issue.