Greg Ryberg Provides Detailed Questions for LAC Audit of the ESC
Senator Greg Ryberg (R – Aiken) and seventeen other SC Senators, today sent a detailed letter to the Legislative Audit Council (LAC) containing specifics for an audit of the Employment Security Commission (ESC). The two-page letter follows the initial audit request of last week.
Senator Ryberg said that, “The detailed questions in this follow up letter stem from our work over the last few weeks with the Department of Commerce and the Office of the Governor. The questions are, in part, some of the same questions that have already been asked by both government officials and the business community during the last year. The refusal of ESC to answer these questions leads me and the other Senators to take action to compel the ESC to answer them via a LAC audit.”
Senator Ryberg noted that, “I have served on the Senate Finance Committee since 2001, and I recall no time at which any ESC commissioner or any ESC staff came before the Senate Finance Committee to discuss this issue. Furthermore, Senate Finance staff has confirmed to me that the first time ESC approached them about the ESC trust fund was this past Fall.”
Senator Ryberg said that he considered this audit request earlier in the Fall of 2008 but that, “I spoke to the Governor’s office in September about requesting an audit, and they indicated that the ESC promised to work in good faith to reach an agreement with them on how to move forward. The ESC failed to do so.”
Senator Ryberg, chairman of the Senate Labor, Commerce and Industry Committee, which is the committee of jurisdiction over ESC, pledged to hold hearings upon the release of the audit. “I will use the LAC audit to examine the agency and make the changes necessary to ensure not only that it will in the future, conduct itself properly, but also that it will never again allow South Carolina citizens to end up in this precarious position.”
Mr. George Schroeder
Executive Director
Legislative Audit Council
1331 Elmwood Avenue, Suite 315
Columbia, SC 29201
Dear Mr. Schroeder,
The following members of the South Carolina Senate request that your agency conduct an audit of the South Carolina Employment Security Commission (SCESC). During the course of that audit, we request that your agency:
- Provide a detailed explanation of SCESC expenditures from the past four fiscal years for all sources of funds, including the use of state, federal, and other funds such as Unemployment Insurance (UI) taxes and Reed Act monies;
- Assess methods for measuring the results of expenditures and the sufficiency of those methods;
- Determine whether accounting systems and records comply with Generally Accepted Accounting Principles and whether proper internal controls exist;
- Document the current balance of all funds and provide an explanation of whether the funds are adequate to meet existing contracts and commitments;
- Compile a detailed account of UI trust fund expenditures, revenues, and balances since 2001;
- Assess potential cost savings and determine whether administrative costs are well-spent and funds are used in accordance with appropriate laws and regulations;
- Examine the agency’s management controls, including the use of assigned vehicles and the reimbursement of travel expenses;
- Assess whether the agency is safeguarding its resources against waste, loss, and misuse;
- Determine whether the UI experience ratings, benefit charges, and contributions are appropriately and equitably calculated for the various business class sizes;
- Review policies for determining initial and continuing UI eligibility and tracking claimants, including an assessment of controls for fraud prevention and job-attached claims;
- Evaluate the effectiveness of programs that match unemployed clients with job orders received by the ESC, including a determination of the percentage of UI claimants that register in the Wagner Peyser database;
- Examine the level of penetration in the business sector for job postings and review the satisfaction rating from those businesses;
- Assess the ability to accurately and reliably collect, maintain, and disseminate data across reports, both internally as well as to state and federal entities;
- Verify whether data is being made available to requesting entities in an appropriate timeframe and in accordance with applicable laws;
- Determine whether ESC resources are being integrated through efficient technology and business processes with partner agencies (SC Technical College System, SC Department of Commerce, Adult Education, SC Department of Social Services);
- Verify consistent use of relevant performance metrics for unemployment and workforce programs to measure desired outcomes for clients and taxpayers, including: referral to training programs, employment acquisition, employment retention for a specified period of time, UI claim duration, benefit exhaustion rate, and UI tax cost;
- Examine whether current technology and business processes have been implemented to efficiently process claims, facilitate adjudication, minimize registration inaccuracies, and mitigate fraud;
- Document existing information technology (IT) systems and identify deviations from current IT best practices, including a cost/benefit analysis of savings accrued from efficiency gains associated with implementation of improvements;
- Verify whether IT systems are safeguarding assets, maintaining data integrity, and operating effectively and efficiently to achieve the organization’s objectives; and
- Confirm whether existing IT systems allow data access for the development of reports and analyses to meet new and evolving requirements.
It is the intent of the undersigned to determine how the South Carolina Employment Security Commission is managing their resources and measuring their results while complying with the applicable laws and regulations. We will likely have more questions concerning these issues and we will forward them to you as soon as possible.
Sincerely,
W. Greg Ryberg
cc: Governor Mark Sanford