State audits find late unemployment payments, $47 million in fraud overpayments
RALEIGH — Two new state audits found continued delays in North Carolina’s unemployment benefit system and more than $47 million in unemployment benefit fraud overpayments, according to the N.C. Office of the State Auditor.
The audits reviewed the N.C. Department of Commerce’s Division of Employment Security, which manages unemployment benefits in North Carolina. One audit focused on the timeliness of first unemployment payments, while the other examined improper payments and fraud overpayments.
According to the auditor’s office, the Division of Employment Security did not issue 28% of first unemployment benefit payments on time during the period from July 1, 2024, through Nov. 30, 2025. The audit found 31,366 of 111,413 first payments were not made within the federally required 14-day standard, resulting in about $12.2 million in late payments.
The auditor’s office said the 28% late-payment rate was an improvement from a 2024 audit that found 43% of first payments were not issued on time. However, the office said North Carolina has not met the federal timeliness standard for first unemployment payments since 2011 and has averaged 41st among states since 2005.
A second audit found North Carolina’s estimated improper unemployment benefit payment rate was 22% from April 1, 2021, through March 31, 2025. The U.S. Department of Labor standard is 10%. Improper payments include payments that should not have been made or were made in the wrong amount, including both underpayments and overpayments.
The audit also found $168.8 million in established overpayments during the review period. Of that amount, $47.2 million was categorized as fraudulent. The Division of Employment Security recovered $12.2 million in fraud overpayments during the period, according to the auditor’s office.
The auditor’s office said fraud recovery has improved in recent years, but noted that in fiscal year 2022, $26.4 million in fraud overpayments were delivered while $3.8 million was reported as recovered.
State Auditor Dave Boliek said the findings show a long-running problem with unemployment administration.
“Government waste comes in many forms, and in this case, it’s occurring through unemployment insurance,” Boliek said in the release.
Editor’s note: This article was drafted with the assistance of artificial intelligence and was reviewed and fact-checked by a member of the NC Political News editorial team before publication.
