LAS VEGAS -- The state's Employment Security Division made as much as $5 million in improper unemployment payments over the past three years to individuals who were incarcerated in Nevada prisons or local government jails, according to an estimate in a legislative audit released Thursday.
A review of 97,000 unemployment claimants in January alone revealed that 67 were behind bars, yet managed to receive roughly $241,000 in benefits. The state also paid $40,417 total to three individuals after they had died.
"The division has not sufficiently explored ways to ensure claimants who are incarcerated and do not meet ‘able and available' eligibility requirements are identified," the audit stated. "Incarceration periods for these claimants spanned several days to more than one and a half years. Incarcerated individuals are not eligible to receive unemployment benefits. Statutes and division policies require claimants to be able and available for work to qualify for weekly unemployment benefits.
"By establishing routine comparisons of incarceration records against unemployment claimant information, improper payments can be identified and stopped."
The audit quoted division managers as stating that they do not have authority through state or federal law to compel prison and jail officials to provide incarceration records.
"As a result, statutory revisions requiring facilities (to) provide data to the division are necessary to ensure the division can compare claims data with incarceration records," the audit stated.
Eight incidents of potential identity theft of claimants' personal information by incarcerated individuals also was discovered by the audit. This prompted the audit to recommend that division policies be updated to notify claimants that their personal information is being used by someone else.
As for payments to individuals who had died, the audit stated that "the division needs to enhance its claims information system to prevent accounts of deceased claimants from being reopened when deceased individuals are identified."
Division administrator Renee Olson informed legislative auditor Paul Townsend in a Nov. 29 letter that in 2009 the division convinced the Nevada Legislature to pass legislation that makes it a fraud for an incarcerated individual to file an unemployment claim.
Olson also said plans are in place to improve the computer system used by the division so that it can cross match data sources in a way that would help identify incarcerated individuals who have filed unemployment claims.
"The division is in communication with the Office of Inspector General, Department of Corrections, relating to obtaining the needed data to automatically cross match inmate populations with those claiming unemployment," Olson wrote. "The division has formally requested similar data from the major metropolitan law enforcement agencies in the state."