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Washington state auditor warns unemployment agency on audits

UPDATED: Mon., Nov. 30, 2020

Associated Press

Associated Press

SEATTLE – A Washington state auditor has accused the head of the state’s unemployment agency of allegedly hindering an investigation into massive fraud resulting in the theft of hundreds of millions of taxpayer dollars.

State Auditor Pat McCarthy said Employment Security Department Commissioner Suzi LeVine imposed “significant constraints” on auditors – including limiting interviews with key employees and delaying access to important documents, the Seattle Times reported.

McCarthy said in an October memo that if the obstructions continued, auditors would report that “management interference” prevented completion of multiple audits currently underway.

The Seattle Times obtained the memo after making a public-records request.

The obstructions have stemmed from efforts by the auditor’s office to document the scale of the theft and amount of money since recovered, The Times reported. The department estimated that about $356 million has been recovered since Friday compared to the $576 million stolen.

“I understand that they have had a tsunami of challenges with regard to the number of unemployment claims,” McCarthy, a Democrat, said referring to a wave of pandemic-related layoffs in March and April. “But right now it is critically important … that we are able to complete this work.”

The auditor’s office is conducting five audits of the Employment Security Department. The annual financial audit report is due in December. The remaining audits are due in 2021.

LeVine has said in a statement that her agency has welcomed the audits from the start and has put in place procedures to get information to auditors as quickly as possible.

“We remain firmly committed to full transparency and are collaborating closely with the State Auditor and her staff, as we have all along,” she said.

McCarthy said the department has made some improvements since her warning letter last month, which was also sent to Democratic Gov. Jay Inslee’s staff, but said “we are still having some challenges.”

Inslee spokesperson Tara Lee said in an email the governor’s office and the office of financial management have been working with the auditor and the department “and we are not aware of any issues that aren’t resolvable. All indications are that the audits will be done on time and on target.”

The Employment Security Department is also being audited by the U.S. Department of Labor and the Justice Department.

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