UPDATED: NC audits find delays in unemployment payments, $47M in fraud

The North Carolina Office of the State Auditor released two new reports indicating continued delays in unemployment compensation claims and over $47 million in fraudulent disbursements.

“Government waste comes in many forms, and in this case, it’s occurring through unemployment insurance. Not only was there a higher rate of improper unemployment benefits, but there was also more than $47 million in fraud overpayments made during the scope of our audit,” added State Auditor Boliek. “The North Carolina State Auditor’s Office will continue to serve as our state’s fiscal watchdog, assessing programs and sounding the public alarm to push for improvement. Ignoring problems for years and missing basic public expectation cannot continue to be tolerated.”

During the period from July 1, 2024, to November 30, 2025, one audit revealed that the North Carolina Department of Commerce’s Division of Employment Security (DES) neglected to issue 28% of initial unemployment payments within the federally mandated 14-day period. A sum of nearly $12.2 million was accounted for by late payments, with 31,366 of the 111,413 initial payments being delayed. The delivery of funds for more than 13,500 payments surpassed a 35-day timeframe.

The auditors reported that while the late-payment rate has declined to 28% from 43% in a 2024 audit, North Carolina has not complied with federal standards for timely initial unemployment payments since 2011. For many years, starting in 2005, the state has held one of the lowest national rankings for promptness of payment.

“Losing a job can be a traumatic event that hurts entire families,” State Auditor Dave Boliek said. “For 15 years, benefits haven’t gone out when they should, even though employers pay into the system. People who lose jobs still have mortgages and bills to pay.”

The auditor’s office has advised the Department of Economic Security to conduct a review and implement enhancements to its claims processing procedures, ascertain the underlying reasons for payment delays, guarantee prompt disbursements, and reinforce strategies for managing surges in unemployment claims.

DES has implemented the recommendations.

UPDATE: Sandhills News reached out to the state auditors’ office for details-

How many individuals were investigated and found guilty?

Will the guilty reimburse the state?

Will any of the guilty face criminal charges?

Were any corporations involved in the $47 million in fraudulent claims? If yes, which ones? Will they face criminal charges?

Specifically, what measures are being installed to prevent further fraudulent claims?

How, if possible, will the state make up for the lost funds?

On June 25, Sandhills News received this message from communications:

“OSA’s data-centered reports are used by entities, such as state agencies and the General Assembly, to make informed decisions and improvements. In an official response, the Division of Employment Security agreed with all four recommendations in OSA’s report when it comes to preventing fraud. DES has committed to prioritizing solutions to address the improper payments and increase recoveries of both fraud and non-fraud overpayments, but OSA will continue to monitor to ensure progress is made given North Carolina’s poor track record.

DES can recover fraud overpayments, and as noted in the report, DES recovered $12.2 million in fraud overpayments from April 1, 2021, through March 31, 2025. While fraud recovery has improved in recent years, for fiscal year 2022, the worst year from the time period examined, $26.4 million in fraud overpayments were delivered and only $3.8 million was reported as recovered.”

Additionally, the U.S. Department of Labor announced plans to crack down on unemployment insurance fraud and mismanagement, including possible use of tools such as withholding administrative funding from noncompliant states. (LINK: https://www.dol.gov/newsroom/releases/eta/eta20260617).

June 20, 2026

Stephanie M. Sellers

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