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Former government workers double-dipping on unemployment benefits, audit finds

By John Solomon

Monday - 5/6/2013, 10:30pm  ET

The downsizing of the U.S. government may not be returning all the taxpayer savings it was intended. That's because displaced federal workers are being allowed to double-dip on unemployment benefits, with some making more in jobless aid than their former salaries, a new audit has found.

The Government Accountability Office, the auditing arm of Congress, on Monday criticized the Labor Department for its oversight and management of the Federal Employees’ Compensation Act (FECA), an unemployment insurance program for out-of-work government employees that last year paid out a whopping $2.1 billion in claims.

Investigators found examples of improper payments and indicators of potential fraud in the Federal Employees’ Compensation Act (FECA) program, which could be attributed, in part, to oversight and data-access issues, GAO said in a report Monday that generated bipartisan concern in Congress.

In just a small sampling of former federal workers, GAO found 19 cases where former workers were collecting both state unemployment insurance (UI) and FECA benefits, a double-dip that cost taxpayers at least $1.3 million. And four of those former federal workers “received more income from combined UI and FECA benefits than they would have received from their federal salary alone,” GAO said.

GAO also found that eight of 32 displaced government workers they reviewed underreported how much compensation they were collecting, possibly allowing them to collect more FECA aid than they were entitled.

The Labor Department said it is “committed to program integrity  and reducing improper payments” but that it was concerned about the cost-effectiveness of GAO’s recommendation to set up a system in which state unemployment programs share data on former federal workers to catch people who might be collecting too much taxpayer aid.

Members of the Senate Homeland Security and Government Affairs Committee, which requested the report, urged the Labor Department to do more to stop the overlapping payments to former federal workers and save taxpayers money.

“The Department of Labor’s priority should be ensuring American families are not forking over their hard-earned tax dollars to pay for improper and incomplete claims,” Sen. Tom Coburn, R-Okla., said. “I look forward to working with the Administration and Congress to make the reforms necessary to FECA to ensure the federal employees’ compensation is not compromised by fraud and abuse.”

Added Sen. Claire McCaskill, D-Mo.: “Families and businesses in every corner of the country are dealing with the effects of shrinking federal budgets, so it’s disturbing to see this amount of improper and overlapping payments of Americans’ tax dollars.”