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Audit Audit of the Department of Unemployment Assistance

This audit found the Department of Unemployment Assistance (DUA) did not effectively manage the collection of delinquent unemployment insurance (UI) contributions from some Massachusetts businesses, resulting in millions of dollars of unpaid contributions. It examines the period of July 1, 2013 through December 31, 2016.

Binder organization: Office of the State Auditor
Date published: June 15, 2018

Executive Summary

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor (OSA) has conducted a performance audit of the Department of Unemployment Assistance (DUA) for the period July 1, 2013 through December 31, 2016. In this performance audit, we examined DUA’s process for maximizing the collection of delinquent unemployment insurance (UI) contributions due from businesses with employees working full time, temporarily, or part time on one or more days in any 13 weeks during a calendar year and businesses that pay wages of $1,500 or more in any calendar quarter.

Below is a summary of our findings and recommendations, with links to each page listed.

Finding 1

DUA did not properly administer the collection of millions of dollars in UI contributions.

Recommendation
 

DUA should establish formal policies and procedures for all activities regarding the administration of its collection process and implement effective monitoring controls to ensure that these policies and procedures are adhered to. The policies and procedures should include a policy that provides for the charge-off or removal of any delinquent employer account where the amount owed is 10 dollars or less.

Finding 2
 

DUA did not intercept over $18 million in payments made by the Commonwealth to state contractors who had delinquent UI contributions.

Recommendation
 

DUA should engage with the Payment Intercept Program and put in place an interface with that program to ensure that employers with delinquent UI contributions owed to DUA cannot receive funds from the Commonwealth via approved contracts.

During our audit, DUA imposed significant constraints on the audit process. Specifically, the agency did not respond to repeated verbal and written requests for specific documentation in a timely manner and did not provide timely access to its electronic accounts receivable records. Further, DUA unnecessarily delayed the conduct of our audit work and denied OSA personnel access to data pertaining to our audit objective. Although OSA was eventually able to complete the audit work necessary to meet the audit objective, these constraints significantly delayed the completion of this audit.

A PDF copy of the Department of Unemployment Assistance audit is available here.

List of Abbreviations

CMR

Code of Massachusetts Regulations

DUA

Department of Unemployment Assistance

EOLWD

Executive Office of Labor and Workforce Development

IRS

Internal Revenue Service

IT

information technology

OSA

Office of the State Auditor

OSC

Office of the State Comptroller

UI

unemployment insurance

 

Contact

Phone

Fax

(617) 727-3014

Address

Massachusetts State House
Room 230
Boston, MA 02133

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