Late last week, the Department of Labor and Industry (L&I) owned up to a decades-long error it made and has yet to rectify five years after it was discovered. It might be laughable if it wasn’t so irresponsible and disrespectful to Pennsylvania’s taxpayers and workers.
In case you missed it, between 2006 and 2016, the agency overcharged interest on money owed to it by people who received “fault overpayments.” These are payments that occurred as a result of the filer withholding or providing incorrect information that led to them receiving benefits for which they were not eligible. Bottom line: The department unknowingly made improper payments and then when the error was discovered, it overcharged interest on repayments. And though officials have known about it for five years, the department has yet to make it right with the people who were overcharged.
It’s really inexcusable for a state agency to behave this way. But making improper payments is not an isolated occurrence in state government. And that’s why we have been working on a package of bills to protect taxpayers and prevent improper payments from occurring in the first place.
House Bill 104 would require state agencies to review their programs and expenditures, assess how susceptible they may be to improper payment, and address any risks to ultimately prevent such payments. The Office of the Budget would then be required to maintain this information on a publicly accessible website.
House Bill 108 would create a “do-not-pay” initiative to monitor improper payments across Commonwealth agencies. Specifically, any agency that makes payments by expending federal funds would be required to enter into a memorandum of understanding with the United States Treasury Department to join the federal do-not-pay program. Other states participating in do-not-pay initiatives have enjoyed significant savings. For example, Oregon saved $286 for every $1 it spent after enacting its do-not-pay law.
When improper payments do occur, House Bill 39 would help ensure we get that money back. It would require the Secretary of the Budget to establish a review schedule of a Commonwealth agency that has $50 million or more in payments to individuals, vendors or entities for improper payments and payment recovery by contracting with an auditor to perform a recovery audit.
Each of these bills earned approval in the state House and are awaiting action in the Senate.
The taxpayers of this Commonwealth – and in the case of unemployment compensation, the workers and employers of this Commonwealth – deserve a government that respects the value of their hard-earned money and handles it appropriately.
Overpaying, overcharging interest and paying out money that shouldn’t be paid out at all is simply unacceptable. We understand mistakes are sometimes made, and that is precisely why we have been pushing for our package of bills to help catch those mistakes … preferably before they happen! But we are also putting in place a mechanism to ensure any improper payments that do happen are recovered and returned to the state and, in turn, the taxpayers.