DENVER (AP) — The Colorado Department of Labor said it overpaid $305 million in unemployment benefits over the past three years, prompting Gov. John Hickenlooper to order the department to recover improperly paid benefits and tighten its procedures.
The benefits — including $169 million last year — were paid to ineligible recipients, including people who were not looking for work.
Most of the overpayments were mistakes by the Department of Labor, said Jeff Fitzgerald, director of the department's unemployment insurance division. Ellen Golombek, the department's executive director, said the department discovered the problem in May.
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Colorado has recovered 43 percent of the $305 million so far, Golombek said. The $305 million improperly paid is part of a total $2.3 billion paid in benefits, she added.
Employers pay into the Unemployment Insurance Trust Fund, which pays the benefits.
Hickenlooper directed the department to work with the U.S. Department of Labor to work on administrative errors, fraud detection, and collection measures. His order also cited outdated technology used by the department and pledged to seek financing for new equipment.
Federal guidelines mandate that improper payments should not exceed 10 percent of total payments. The U.S. Department of Labor notified Colorado in August its improper payments reached at least 17 percent, Golombek said.
The national average is 12 percent, said state Labor Department spokeswoman Cher Haavind.
Golombek said the department has increased the number of staff working on unemployment claims from 108 to more than 140.
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