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NC benefit delays attributed to claims scrutiny

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RALEIGH, N.C. -

North Carolina's unemployment benefits agency is working quickly but carefully to eliminate a backlog of initial claims, the office leader said Wednesday. The claims grew recently as the agency took a more robust approach to deciding whether someone qualifies for help.

Division of Employment Services chief Dale Folwell told a legislative oversight committee the agency is working to eliminate a backlog of 12,000 unresolved benefit claims by the end of next month. The number is more than 60 percent higher than a backlog of about 7,300 cases in July. The backlog peaked at nearly 14,000 in December, division data show.

The increase comes as North Carolina's unemployment rate has fallen 2.5 percentage points over the past year to 6.9 percent, and the number of new cases received by division case evaluators fell to under 10,000 a month. New benefit rules and limits approved by the General Assembly also took effect last summer.

More initial claims are being delayed beyond the usual 21-day window the federal government expects because agency workers are scrutinizing them more closely, Folwell said. It makes more sense to prevent overpayments, he said, rather than attempt to collect them through tax refunds or wage garnishments when a mistake or fraud is later uncovered.

"We need to do it correctly, not just quickly," he said. Otherwise, he added, "to simply pay somebody some money, and then chase it down is a ridiculous use of our energy."

If the details of an ex-employee's dismissal doesn't match the employer's explanation - or perhaps the employer doesn't file timely paperwork - division workers are now speaking to both sides to obtain more information before deciding whether the displaced worker qualifies for benefits. The effort is designed to prevent disbursement of funds to people who, for example, quit their job on their own accord or are using someone else's identity to collect. Others are more complicated, he said.

"What we're talking about here is the toughest of the tough," he said.

The process has reduced the percentage of first-time payments going to displaced workers within 21 days from 90 percent in January 2013 to 79 percent in December. For all of last year, the rate was 82 percent, below the federal standard for success at 87 percent.

The agency is aiming to improve its consistently low marks compared to other states on performance measures tracked by the U.S. Labor Department. The improper payment rate of 17.5 percent is also the second highest in the nation only to Nebraska, according to department data for the year ending June 30, 2013.

Still, Rep. Paul Tine, D-Dare, said he's been getting calls from constituents who tell his office they've been waiting 12 or 16 weeks or longer for a decision on their initial applications.

"These are folks who don't make a lot of money and are living paycheck to paycheck," Tine said. "I know we're cleaning up the system ... but we've got a lot of folks out there who are having a hard time." Folwell said the agency's most outdated initial claim now dates back to early November.

About 61,000 people received state unemployment benefits in December totaling roughly $60 million, according to a document presented to legislators. Those who are denied claims can appeal the rulings through the division and ultimately to court.

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