Dept. of Labor Misspends $73 Million on Unemployment Benefits

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(Memphis) A newly released state audit shows The Tennessee Department of Labor and Workforce misspent $73 Million over six years.

It was found during the state comptroller’s office’s annual audit and they say it’s not only due to error but fraud too.

Fraud means someone who wasn’t eligible applied for the benefits and got them, while error means the department continued paying claims to people who went back to work.

“There is a likelihood that most of that money will not be recovered.  About 77% I think is what we’re saying is going to be lost for all time,” said Blake Fontenay with the state comptroller’s office.

The state says most of that money will never be returned because the department of labor was not keeping very good records and files, another finding of the audit.

The audit also shows the department was not only overspending they were not spending money where they needed to.

“There were problems with people who were actually eligible to receive the benefits and many many of them were not receiving the benefits.  So the sword cut both ways,” said Fontenay.

Labor commissioner Karla Davis, who is from Memphis, and two others with the department have stepped down.

The Tennessee Department of Labor and Workforce is closed today for Good Friday so we couldn’t reach them for comment, but they told the Tennesseean it’s too early to respond to the audit but they plan on coming up with a plan of action to fix the problems in the next few months.