RELEASE: Schmidt statement on unemployment fraud forensic audit

TOPEKA – (September 19, 2022) – Kansas Attorney General and Republican Nominee for Governor Derek Schmidt issued the following statement on the forensic audit report released today by the Unemployment Compensation Modernization and Improvement Council showing the Kelly administration paid up to $466 million in unemployment fraud:

“Today’s report makes completely clear Governor Kelly’s incompetence failed Kansans,” Schmidt said. “A forensic audit shows that a simple two-factor authentication could’ve prevented 85 percent of the fraud that occurred on her watch during the pandemic. Kansans deserve better from their governor, which includes admitting the truth and showing some accountability.” 

According to reporting from the Topeka Capital Journal, auditors blame inaction by the Kelly administration for the vast majority of the fraud:

Auditors noted that about 85% of the fraud happened before KDOL implemented multifactor authentication.

“I find it disheartening that we had solutions within our grasp, we just chose not to make it a priority,” said council member Phil Hayes, citing the drop in fraud after January 2021.

They also estimate that about $15 million worth of fraud “might have been avoided” if KDOL hadn’t waived a one-week waiting period. The agency made nearly $78 million in overpayments for a variety of reasons.

On September 8, Schmidt called on Kelly to provide credit monitoring services to Kansans who have had their personal information exposed by the Labor Department’s failure to protect them. 

Schmidt has also since been endorsed by the state’s two biggest associations representing Kansas job creators, the Kansas Chamber of Commerce Political Action Committee and the National Federation of Independent Business Kansas Political Action Committee.