‘It’s not fraud if the agency does it:’ Iowa officials explain unemployment overpayments

HE WANTS TO KNOW: Iowa state en. Matt McCoy, D-Des Moines, wants to know how many people received unemployment checks in error.

DES MOINES, Iowa — The only reason Iowa Workforce Development hasn’t been telling the truth about the extra unemployment benefits it paid out in March is because it believes in the honesty of Iowans.

Because 85 people contacted the agency to report receiving extra unemployment benefits, IWD has claimed the computer problem that caused it to issue extra unemployment benefits resulted in over paying, well, 85 people.

But testifying under oath before the Iowa State Senate Government Oversight Committee on Wednesday, IWD Unemployment Insurance Division Administrator Michael Wilkinson and Regional Operations Manager David Eklund reluctantly conceded the agency doesn’t actually know how many people received extra benefits.

Asked by Sen. Matt McCoy, D-Des Moines, if he thought more than those 85 received benefits, Eklund, who was in charge of handling the overpayment problem for IWD, declined to answer.

“There you’re weighing the honesty of our citizenry,” Eklund said.

Eklund, who supervises IWD’s fraud investigators, said he didn’t want to speculate on whether dishonest Iowans would fail to report an unexpected windfall.

A computer problem prevented IWD from updating its list of qualified unemployment benefit recipients for the week ending March 8, so the agency used the previous week’s list instead, even though that meant benefits would be paid to people who didn’t request them.

An email written by Eklund, and obtained by the committee through an open records request, laid out the agency’s solution to the overpayment problem: Wait to see if anyone voluntarily returned the payments.

“We can gladly accept their offer to return the benefits, with a ‘thank you,’” Eklund wrote in the email dated March 13.

Asked how by Sen. McCoy how many of the 85 people who contacted IWD actually returned the extra benefit, Eklund couldn’t provide a number.

“I didn’t total that amount,” Eklund testified.

“If they insisted on returning the funds, we, as my email states, would accept the money with a ‘thank you.’”

And the overpaid had to insist.

“We didn’t force anyone to pay it back,” Eklund said.

Photo courtesy of Iowa Workforce Development
“IT’S NOT FRAUD IF THE AGENCY DOES IT”: Unemployment Insurance Division Administrator Michael Wilkinson said that in testimony before the state senate on Wednesday.

“If an individual honestly asked me, ‘Do I have to pay this back,’ I was equally honest and told them they were not required,” Eklund explained.

“My fear, in essence, was that we would be penalizing the honest and rewarding the dishonest who did not come forward,” Eklund told the committee. “And to my own personal compass of fairness, that did not seem right.”

Iowa Watchdog asked Government Oversight Committee Chair Sen. Janet Petersen for her assessment of Eklund’s handing of the overpayments.

“I don’t even know what to think of what he said,” Petersen, D-Des Moines, said. “I was surprised by that. Clearly it’s not the best way to administer the unemployment program.”

Regardless of whether it truly was the best way, Wilkinson assured the committee it was legal.

“The actions that we took were within the Iowa code, precedents and administrative rules,” Wilkinson said.

People who kept the extra benefits are equally blameless, according to Wilkinson, because IWD was responsible for entering their information into the payment system.

“It’s not fraud if the agency does it,” Wilkinson said.

Petersen didn’t find that reassuring.

“There’s more at issue here than narrow legal definitions,” she told Iowa Watchdog.

“Basically what we’ve found out today is that we don’t know how many people received an overpayment. And I believe IWD is trying to keep it that way.”

Petersen said the committee will to press IWD to provide more information.

Contact Paul Brennan at pbrennan@watchdog.org. This story originally appeared on Watchdog.org.