The state Labor Department’s ability to answer a flood of calls didn’t improve substantially during the pandemic, although it hired hundreds of staffers to beef up its call center, a new audit on Monday showed.
The new audit out on Monday showed that the agency answered about as many calls in April of 2021 as it did in July 2020.
“We ramped up individuals, we ramped up phone lines and we didn’t see results,” said Republican state Sen. Caryn Tyson, a member of the Legislative Post Audit Committee.
“This definitely need to be looked at closer,” Tyson said.
The agency answered 56,000 calls in April 2021 compared to about 54,000 calls in July 2020, the audit found.
The audit shows that at the outset of the pandemic the Labor Department, which started with 33 call center staffers, answered about 70,000 of the 12.5 million calls it received as businesses shut down because of stay-at-home orders.
By May, one month into the pandemic, the agency was answering 49,000 calls.
The number increased to 69,000 by last January and receded to 56,000 by April.
At the same time, the state was spending millions to hire more staff.
The Labor Department has said the state is employing about 600 people to handle calls and generally helping Kansans get their benefits, although that number fluctuates.
“Not being able to reach a customer service representative likely resulted in additional delays for people needing assistance with their claim,” the audit said.
Deputy Labor Secretary Peter Brady told lawmakers on Monday that the agency started to increase the call center staffing with outside help in June 2020.
Brady said the agency hired Accenture in early July 2020 to provide contracted staff with 20 new associates to add to the 120 state employees from other agencies that were already working there to help out with the influx of calls.
By last fall, the Labor Department added 200 to 250 more employees. By May and June, the agency had reach 650 employees at its peak.
The agency has spent at least $50 million to bolster its call center since last year, including $11 million recently approved by the State Finance Council.
Brady said calls spiked in the early part of the year after Congress passed a law that not only extended unemployment benefits but changed the eligibility requirements.
“That extension was very challenging to put in place,” Baker said.
“January, February, March – we saw significant drive and increase in the calls coming to the agency because those extensions were put in place,” he said.
Indeed, call volume jumped from 3.4 million last January to 8.6 million in February before dropping back to about 3.3 million in March.
Baker said the agency is keeping a high level of resources through Sept. 4, when the existing expanded federal unemployment benefits lapse.
He expects calls will drop off substantially when the benefits end at the end of this week.
The agency warns, however, it will still be responsible for administering those programs such as hearing claims appeals, recovering overpayments and investigating fraud.
Auditors also upped their estimate of how much money the state has paid out in fraudulent claims during the pandemic to about $700 million out of $2.8 billion in unemployment benefits paid from January 2020 to February 2021.
Earlier this year in the first phase of the Labor Department audit, it was estimated that Kansas paid out about $600 million in fraudulent unemployment claims during 2020.
They estimated there was about $200 million in fraudulent claims paid out in state funds and about $400 million in federal funds.
The audit released on Monday estimated that the new number comes closer to about $700 million, with half coming from state funds and half coming from federal funds.
Auditors estimate that about $344 million in fraud from state funds occurred at the end of 2020, peaking at $107 million last December.
The auditors noted that the fraud payments adversely affected the state’s unemployment trust fund, which declined about $711 million during the same time frame.
Auditors concluded that fraudulent payments could have accounted for about 48% of the decline with legitimate payments likely making up the rest of the decline.
In its response to the audit, the Labor Department generally agreed on $380 million in fraud but had low confidence in the remaining $306 million.
The agency contended that $306 million should be discounted from the overall $700 million estimate until it can be further investigated and accounted for.
