Virginia Employment Commission; Report on Audit for Year Ended June 30, 2021

During our audit, we identified internal control and compliance findings that we believe are either directly, or indirectly, related to a lack of resources available for processing and adjudicating unemployment claims with the onset of the COVID-19 public health emergency. Since March 2020, the ramifications of the COVID-19 public health emergency have significantly affected the Commission’s operations. To address the rapid rise in unemployment, the federal government provided additional federal funding to states and implemented several new unemployment-related benefits. The Commission struggled to adapt to these changes due to a lack of both staffing and technology resources. As a result, the Commission was not able to process unemployment benefit claims using its historical processes. While the Commission tried to process claims quickly, outdated technology and limited staffing resulted in a significant number of errors in benefit payments. The Commission did not detect many of these errors until after it issued payments, and the Commission did not have the systems or processes in place to record overpayments to recoup these funds.