IGH, N.C. — The N.C. Department of Commerce recently received positive results from three separate audits of the Division of Employment Security (DES). The Division was audited by the U.S. Department of Labor (USDOL), the Social Security Administration (SSA), and the Internal Revenue Service (IRS).
“We're committed to making changes that will benefit the unemployment insurance system,” said Assistant Secretary of Employment Security Dale Folwell. “Positive audit reports show that we're on the right track in those areas. However, we remain committed to quality customer service and improving all aspects of the unemployment insurance program.”
In late March, USDOL conducted an audit to evaluate operational control of funds within the Unemployment Insurance (UI) program. Additional review objectives included reviewing the DES Office of Internal Audit practices, operational procedures for addressing internal security incidents and violations, identifying current or former agency employees receiving unemployment, evaluating computer security and data processing systems, and reviewing risk analysis processes.
“USDOL stated that no findings were identified during the review,” said Folwell. USDOL also recognized the DES Office of Internal Audit business practices as a “Best Practice” for other states to follow. Folwell further stated, “We will continue to work closely with USDOL on any recommendations they may have to improve our quality and controls.”
In addition to the USDOL audit, the Social Security Administration reviewed the business process for secured social security number verifications and also found no significant weaknesses with security of this information. However, the Social Security Administration did recommend the DES include the SSA in their breach notification process, and also requested the DES purge SSA verification information from its systems on a regular basis to comply with the contract agreement between the DES and SSA.
Finally, the United States Treasury Department reviewed the business processes implemented to secure federal tax information because federal tax refunds are now being used to recover overpayment of Unemployment Insurance benefits. To ensure that DES met federal regulations to handle Federal Tax Information (FTI), the IRS required DES to submit its controls implemented to secure FTI by June 30, 2013. DES submitted the required Safeguard Activity Report and Inspections reports in a timely manner to the IRS. The IRS reviewed the Division’s Safeguard Activity Report and found that DES had no outstanding review findings. They also noted that no Corrective Action Plan was required.
As a result, DES is allowed to continue participating in the Treasury Offset Program, which allowed DES to collect more than $11,000,000 in UI benefit overpayments since January 2013 from federal tax refunds.
“Protecting claimant and employer information is a top priority,” said Folwell. “In order to meet the expectations of our customers, we must ensure that the proper controls are in place. The audit by the SSA and the IRS certifies that DES is adequately protecting both Social Security numbers (SSNs) and Federal Tax Information (FTI).
“In addition to these audits, the US Office of Inspector General and the NC Office of the State Auditor are in the process of completing their audits. We not only welcome their presence, but are encouraged by the opportunity to show continued improvement.”