KENTUCKY TRANSPORTATION CABINET

OFFICE OF INSPECTOR GENERAL

REPORT OF INVESTIGATION

OIG Case: 2020-OIG-063B

Date of Report: February 19, 2021
Investigators: Maryellen MYNEAR; Chuck HINES; Jennifer WOODS
Status: CLOSED

TABLE OF CONTENTS

SYNOPSIS 2

BASES FOR INVESTIGATION

and PRELIMINARY BACKGROUND 3

INVESTIGATION
Allegations Regarding Questionable Employee Conduct 4
Preliminary Information Gathered 5
Interviews of Referred Employees 7
Policies/Procedures, Training Materials and Other Instructions 43

FINDINGS
By Allegation 43
Additional Findings 45

RECOMMENDATIONS 46

DISTRIBUTION 47

APPENDIX A: Witness Interviews Conducted by OIG

APPENDIX B: Policies/Procedures, Training Materials

and Other Instructions

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Copies of all electronic mail communications and documentation referenced herein shall be
maintained in the KYTC OIG case file. Certain information contained in this Report of
Investigation has been obtained from emails and other documentation that may be subject to
protection from public disclosure by attorney-client privilege, joint law enforcement privilege,
Rules of Civil Procedure, or any other applicable state or federal law. Inclusion in this Report
of Investigation does not waive any applicable privilege or restrictions that may be properly
asserted by the Commonwealth of Kentucky or its agencies.

SYNOPSIS

This Report contains the results of an investigation requested by the Office of the Governor, and
Lt. Governor and Education and Workforce Development Cabinet (EWDC) Secretary Jacqueline
Coleman, into possible improprieties and/or employee misconduct in the filing, processing and
payment of unemployment insurance benefits during the 2020 COVID19 pandemic. Specifically,
OIG investigated allegations that a number of EWDC employees received UI payments by
applying for and/or receiving pandemic-related unemployment benefits to which they were not
monetarily eligible. EWDC provided a list of thirty-five (35) EWDC employees believed to have
engaged in potential misconduct. OIG conducted a total of sixty-one (61) interviews in the course
of this investigation.

Individual and seemingly small decisions made in early March 2020 in a well-intentioned attempt
to expedite benefits for Kentuckians combined to weaken checks and balances intended to ensure
claimant eligibility and benefit accuracy. Certain experienced OUI employees appear to have
exploited known or perceived loopholes within the pandemic unemployment claims process to
obtain monetary benefits for part time jobs, while still fully employed in and compensated for their
state jobs. Other employees, while not filing claims, engaged in various levels of misconduct that
may also support disciplinary action. In addition, certain supervisory level personnel participated,
implicitly sanctioned, or failed to report misconduct. A summary of the interview of each
employee referred for investigation by EWDC highlights the individual conduct at issue. A
summary of applicable policies, procedures and training materials is also included. Lastly, specific
findings and recommendations are presented.

BASES FOR INVESTIGATION and PRELIMINARY BACKGROUND

By letter dated May 22, 2020 the Office of the Governor requested this investigation by the
Kentucky Transportation Cabinet’s Office of Inspector General (OIG). Specifically, KYTC OIG
was asked to investigate allegations of certain Education and Workforce Development Cabinet
employees “accessing and working on their own unemployment insurance claims and the
unemployment insurance claims of relatives.”1 The Office requested a “full and independent
review of each of these matters, and other matters that may arise during that review.” By separate
letter dated May 21, 2020, Lt. Governor and Education and Workforce Development Cabinet

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A separate investigation into an apparent April 2020 data breach was also requested in this letter. That investigation
was completed in July 2020 and a written Report presented to the Office of the Governor.

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Secretary Jacqueline Coleman also requested an investigation into alleged EWDC employee
activities “that raise concern regarding personnel/ethics issues and program integrity” and noting
that there is not an Office of Inspector General within that Cabinet.

The Commonwealth of Kentucky’s Office of Unemployment Insurance (OUI) oversees all aspects
of unemployment insurance or benefits within the state, from collection of appropriate taxable
amounts from employers subject to this taxation, to the processing and payment of benefits to
eligible claimants and the review and adjudication of any appeals therefrom. Funding for these
processes, as well as for unemployment benefits themselves, comes from a blend of federal and
state monies. At the onset of this investigation, the Office of Unemployment Insurance was housed
within the Workforce Development arm of Kentucky’s Education and Workforce Development
Cabinet (EWDC).2 The unemployment insurance program is also subject to regulation and
oversight by the U.S. Department of Labor.

In March 2020, in response to the emerging COVID-19 pandemic, Governor Beshear signed
several Executive Orders (EO), some of which were intended to assist Kentuckians whose
employment or livelihoods were being affected by this pandemic and mandated closures. Support
for these orders was provided in part by the concurrent passage by Congress of the federal
Coronavirus Aid, Relief, and Economic Security (CARES) Act, which included benefits
designated as Pandemic Unemployment Assistance (PUA). The CARES Act also provided an
additional federal payment of $600 per week to those who were receiving some type of
unemployment assistance, whether by traditional unemployment benefits or “new” PUA benefits.
These additional $600 payments are designated as Federal Pandemic Unemployment
Compensation (FPUC).

Prior to the pandemic, UI applicants would be subject to certain “cross checks” before benefits
were paid, including an employer protest period and the requirement that an applicant report any
and all wages earned during the benefit period. A mathematical formula then was applied to any
wages, which might reduce or eliminate a monetary unemployment benefit. As the pandemic hit,
a decision was made to automatically pay the first two weeks of benefits; this decision came to be
known as “autopay.” Benefits were set up to “autopay” the first two weeks without wage reporting.
Thus, claimants were automatically issued payments without full eligibility determinations and
without a calculation of the correct weekly benefit amount that would accurately account for any
wages earned from partial or other employment. The subject employees all filed claims based on
an alleged loss of income from a part-time (secondary) job.

Because most of the subject employees had full time wages from the state, those wages were used
to determine their benefit amount, with no recognition that these were not the “lost” wages from a
part time job, but rather wages the claimant was continuing to receive. The benefit amount paid in
many cases was the maximum UI benefit allowed by state law ($552 per week at that time). While
the subject employees who filed a claim for the loss of a secondary (part time) job likely lost

2
On May 28, 2020, Governor Beshear announced that the Office of Unemployment Insurance was being moved to
the Kentucky Labor Cabinet.

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income, in most cases, the employee’s full time wages would have “zeroed out” any monetary
benefit upon application of the correct formula. In turn, based on what is referred to as the $1
benefit rule in the CARES Act, a claimant with no monetary benefit should have been deemed
ineligible from receiving the additional $600 federal payment known as FPUC. Thus, the autopay
decision also compounded to pay significant amounts of FPUC in error.

INVESTIGATION

Allegations Regarding Questionable DWI/OUI Employee Conduct

On May 26, 2020, representatives of the KYTC OIG met with members of executive management
from the Education Workforce and Development Cabinet (EWDC) at the OIG offices at Berry Hill
Mansion, Frankfort. The OIG heard allegations that a number of EWDC employees received UI
payments by applying for and/or receiving pandemic-related unemployment benefits to which they
were not monetarily eligible. More specifically, EWDC management alleged that certain
Department of Workforce Investment (DWI) employees took deliberate advantage of known or
perceived flaws within the pandemic unemployment claims process to obtain monetary benefits,
while still fully employed in and compensated for their state jobs.

The allegations highlighted at this meeting included:

(1) DWI employees filed for and/or collected pandemic unemployment benefits when they
knew they were not eligible for them;
(2) Upon filing claims, employees did not properly disclose state employment, and/or may
have intentionally altered the employer addresses so that letters (412) to the employer
would be delayed or misdirected;
(3) Some of the employees may not have had part time jobs;
(4) The employees improperly accessed their own or others’ claims, removed ”stops” on
claims to obtain payment, and/or manipulated the claims of coworkers, friends, or family;
(5) The “automatic payment” process was being exploited by employees filing new or
duplicate claims;
(6) Employees were actively undermining or disregarding leadership;
(7) After an “executive management stop” was placed on employees’ claims on or about May
1, 2020, some employees continued to attempt to manipulate claims in an attempt to release
payments; and
(8) One full time employee received nearly $10,000 in pandemic assistance.

In early June 2020, OIG received a list of thirty (30) EWDC employees and was asked to
investigate each individual’s conduct with regard to these allegations. On August 28, 2020, five
(5) additional EWDC employees were added to the list for investigation.

Of the 35 EWDC employees referred for investigation:

 15 were employees in the Office of Unemployment Insurance (OUI); 8 received benefits;

7 did not

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  13 were employees from the Office of Vocational Rehabilitation (OVR); 7 received
benefits; 6 did not
 2 were employees from the Unemployment Insurance Commission (UIC); both received
benefits
 1 employee was from the Division of Technical Assistance. Investigation revealed this to
be a fraudulent claim filed using this employee’s SSN; no benefits were paid
 1 was an employee from the Office of Adult Education (OAE); this person received
benefits
 2 employees had left state employment, which preempted an interview; 1 received benefits
and 1 did not
 1 employee was temporarily assigned from the KY Department of Library and Archives to
OUI. This employee did not receive benefits.

EWDC reported that the monetary payments received by these employees (at the time of referral
to OIG) totaled:

 $22,252.00 in Unemployment Insurance benefits (state funds);

 $5,580.00 in Pandemic Unemployment Assistance (PUA) benefits (federal funds); and
 $26,400.00 in Federal Pandemic Unemployment Compensation (FPUC) benefits (federal
funds)
 These payments total $54,232.00.

Preliminary Information Gathered

In addition to interviewing certain employees as provided by EWDC, thirty (30) individuals were
interviewed for background information. The need to interview these individuals was based upon
documents reviewed and/or information obtained during other interviews. These individuals are
identified in Appendix A, attached hereto and incorporated herein by reference.

While an in-depth discussion of the entire UI system is beyond the scope of this Report, several
individuals with significant UI experience provided insight related to UI operations, policies and
procedures which form the foundation for this investigation. Employees with COT and/or OTS
provided background information as to the operations of KEWES and KNET and steps taken
before and during the pandemic to implement provisions of the CARES Act.
Some interviews simply corroborated information already obtained and is not individually set forth
herein. Multiple individuals interviewed, as well as some of the identified employees,
independently but consistently described attempts to explain to then-Executive Director Muncie
McNamara that an automatic payment process would generate a myriad of issues – from
overpayments due to lack of wage reporting, to possible claimant fraud, to possible USDOL audit
for failure to follow established UI protocols. McNamara was not interviewed by OIG due to his
pending personnel action against the Commonwealth; in addition, his conduct falls outside the
scope of this investigation.

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During individual interviews, EWDC management expressed a general belief that certain
experienced employees, who know how the UI program works, took advantage of McNamara’s
lack of knowledge and the autopay process to exploit the system for personal gain. Beth Roark,
HR Executive Director, stated that she was notified by Harp of suspicious conduct by certain UI
staff involving the filing of unemployment claims, despite their continued full time state
employment. This conduct was confirmed by both Heidi Miller and Rebecca Poling from COT
through reports utilizing social security numbers to identify all state employees who filed claims.
With this knowledge, an EWDC executive management meeting was held which included Roark,
Benton and Harp. At that time, a decision was made to place a stop on all UI claims made by OUI
and DWI employees. Miller added the stops to these claims in the appropriate systems on or about
May 1, 2020, and used the designation “STOP DUE TO EXEC MGMT” [Executive Management].
Roark was then alerted that these “executive” stops and other stops were being removed from
certain DWI/OUI employees’ claims in the KEWES system. Removal of a stop alone will not
result in payment. Roark explained that within the UI mainframe processing system (KNET), a
code “90” must be entered which clears the disqualification so that a payment is released. It is
necessary to first clear the stop in KEWES and then place a “90” in the mainframe to release
payment. It appeared that employees were removing stops and then “90ing” a claim for payments
or asking other employees to take these actions on their claims. Employees engaging in this
conduct were identified through a unique identifier known as a “WFDI” number, issued to
approved employees. This unique WFDI must be utilized to access the UI systems and serves as
an “electronic footprint” to identify any actions taken by that employee.
Based on this potential misconduct, Roark then instructed Assistant HR Director Kimberly Tucker
to open an internal investigation. According to Tucker and Roark, it quickly became apparent that
this investigation was too large for their office to handle, and they sought outside agency
assistance.
EWDC publishes and/or obtains certain confidentiality agreements, security awareness training
acknowledgements, COT Acceptable Use Policy acknowledgements, and Ethics Act awareness as
appropriate. Roark provided specimen copies of each of these documents. She stated that HR does
not require an annual review of policies by employees; however, anything previously signed
should be maintained in an employee’s personnel file.
Multiple EWDC personnel stated that UI employees know or should know it is not appropriate to
use WFDI to look at your own claim or a coworker’s claim, or the claim of someone you know.
Several interviewees noted there must be a legitimate business reason to view a claim.

Another common theme among those interviewed was a lack of adequate training for employees
who volunteered or were detailed to assist with pandemic UI claims. It appears that certain required
documentation such as signed Confidentiality and Security Agreements and Security Awareness
Training acknowledgements were not obtained from all employees.3

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OIG requested several documents for each of the identified employees, and also performed an onsite review of
these employees’ personnel files.

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Some witnesses and identified employees noted incomplete, inconsistent or incorrect information
being disseminated to employees assigned to assist with claims. One main method of written
communication was a regular e-mail “blast” from the EWDC Communications Office that
periodically compiled various claims processing information and instructions as provided by
various management. These emails were sent approximately two to three times per week in April
2020. An email dated April 16, 2020, included the following guidance:

People that have full-time jobs, well as a part-time job [sic] and that have lost their
part-time employment, can file for UI benefits. After the claim has gone through
the process they may be ineligible for UI benefits due to their full-time wages would
qualify [sic] for the $600 PUC benefit payment.

As demonstrated by the identified employee interviews herein, less experienced employees or

those who had been detailed from a non-OUI job to help with claims might plausibly point to the
lack of training or experience in defense of the filing of a claim. Certain experienced OUI
employees, however, appear to have taken deliberate advantage while possessing sufficient
training, experience and/or knowledge to understand the loopholes in autopay and traditional UI
versus pandemic assistance programs. In addition, many employees who were assigned WFDI
numbers utilized this restricted access to view their claim or others’ claims in inappropriate and
likely actionable ways. Ultimately, it is the decision of each employee’s current appointing
authority (Labor Cabinet or Education and Workforce Development Cabinet) regarding
appropriate disciplinary actions. Certain conduct may also constitute a lack of good behavior or
unsatisfactory performance of duties within the meaning of 101 KAR 1:345 sufficient to support
personnel action, to be determined by the relevant appointing authority.

INTERVIEWS OF REFERRED EMPLOYEES4

All interviews were conducted in observance of the Healthy at Work guidelines set forth by
Governor Beshear.

OIG has made every effort to learn and understand details of Kentucky’s complex unemployment
insurance programs, from claim filing to database automated functions and interactions, to
eligibility determinations, to payments of benefits, as well as acronyms, stop codes and various
KEWES and KNET programming actions. In light of the complexity of these programs, however,
OIG is not a subject matter expert. OIG recommends further review of these interview summaries
by experienced OUI, OTS, or COT personnel, who may identify further misconduct, omissions or
4
Thirty-five individuals were specifically identified to OIG as Workforce Development employees who EWDC
determined had filed unemployment claims during the pandemic while retaining their full time positions with EWDC.
The interviews are set forth here in alphabetical order, by employee last name. The digital audio recording of each
interview will be maintained in the OIG case file. In addition to the thirty-one (31) identified employees interviewed
herein, four (4) identified employees were not interviewed after review of applicable electronic records revealed that
one (1) subject had not filed a claim, and three (3) subjects were former employees whose claims did not appear to be
related to their EWDC employment.

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false statements. OIG stands willing and able to assist in follow up investigation and/or interviews
if requested.

No WFDI Number Issued

Filed claim on July 22, 2020; did not receive any benefits
Interviewed September 10, 2020 via Microsoft Teams app (Teams)

has approximately nine years in OVR and did not assist with UI claims.
has a side business for cleaning services. She closed her business near the
end of March through first part of June due to the pandemic. She was aware of the
CARES Act, and researched for herself. After several unsuccessful attempts to
contact UI to see if she could file, she filed her claim to see what would happen.
She also ran hypothetical scenarios past co-workers ( could not recall who they
were) who responded that people who lost part time jobs would possibly qualify.
This was the reason for the gap between her loss of part time income and her filing.
She did not go in to request further benefits and never received and payments. She
is currently back to work in her part time job and considers herself fortunate to
have a full time job, so she decided not to pursue her claim.

OIG requested claim updates on all subject employees from OUI Benefits Administrative
Branch Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed
her claim on her part time employer. She was not paid anything and did not request any
weeks.”

WFDI Unknown

t
Filed claim on April 27, 2020; did not receive any benefits
Interviewed July 28, 2020 in Berry Hill Mansion Music Room

was an Audio Visual Technician with Kentucky Department of Libraries

and Archives and was asked to help with claims. He was provided “some” training,
which was he described as “rushed and sloppily done.” reported having
significant difficulty obtaining answers to questions to assist him with claimants.

worked part time at Heartbeats in Frankfort and believed he qualified for

benefits by listening to the Governor. He also compared his situation to a claim he
was working that was very similar to his. When he asked his supervisor (Ginny
Gatewood) if the claimant qualified, he was told yes. also researched on
the internet, which he asserted informed him that although he may not qualify for
UI benefits, he may and could still qualify for the pandemic benefits.

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 was not aware of other employees filing claims, and said his own
application was confusing and vague. He applied through regular channels and
never used his own WFDI number to access his own claim. did not receive
any benefits because he was informed a “hold” was placed on his claim. He called
the UI hotline but never got a return call from a person. He received several notices
of determination that did not make a lot of sense to him and he did not pursue it.
stated he tried to be as transparent as he could when applying for his
benefits and noted on his initial claim that he was employed full time.

Investigator note: No evidence was found that used his WFDI to access his own claim or
the claims of the others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on her
(sic) part time employer. He did not receive any money on her (sic) claim. He certified for two
more weeks but did not receive anything because he reported her (sic) earnings.”

WFDI Unknown

Filed claim April 2, 2020

Received $ in UI and $ in FPUC, auto paid
Interviewed August 13, 2020 via Teams

started state employment in May 2016. She was not asked to help
with people filing claims. She filed her claim because the Governor said people
could do so, based on lost wages from her part time job at Logan’s Roadhouse
Lexington. She waited for a while, but the Governor kept saying to file. She was
concerned about her payment because it appeared it was based on both her part
time and full time jobs. She stated her claim was “under investigation” when she
checked on it through the public portal. She logged into her claim to request
benefits, reported her wages and discovered her benefits would zero out. She made
no further attempts. In her original filing, she only listed her Logan’s Roadhouse
job and was not able to enter in any wages. She is back to work in her part time
job. She remarked it would not be fair to work overtime and also claim benefits.

Investigator note: No evidence was found that Fint used a WFDI to access her own claim or the
others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on
her part time job. Two weeks were auto paid. She certified for two more weeks but she reported
her earnings from her full time job and did not receive any benefits. She will be set up with a
departmental error overpayment.”

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 Filed claim on April 22, 2020; did not receive any benefits
Interviewed August 20, 2020 via Teams

started with the state in January 2020. She had no UI experience but
volunteered to help out when asked. She filed for benefits based on what she heard
from the Governor’s briefings because she worked part time as needed as a PRN
for Cornerstone Rehabilitation. Her claim was immediately denied. She did not
contest or question the denial. She did not talk to anyone in UI; however,
looked at her own claim using her WFDI number. She said she was not informed
of any restrictions on using the WFDI number and she was curious as to what her
claim looked like.

Investigator note: used her WFDI to check her own claim on 4/22. No evidence was found
that she looked at the claims of others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed her claim on her
part time employer. She was not paid anything and did not request any weeks.”

WFDI N/A

Started an electronic application on April 26, 2020 but never submitted the claim
Did not receive any benefits
Was not interviewed

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed no claim for her
for Unemployment Insurance benefits.”

WFDI Unknown

Filed Claim on April 17, 2020

Received $ in UI and $ in FPUC, auto paid
Interviewed on August 11, 2020 via Teams

stated in her interview she had no UI experience but was recruited to help
during the pandemic and as of the interview was still doing so. She claimed she
never received any real training until recently, within the last three weeks.

stated she did not know others were filing claims. She applied for her lost
part time job at Ross Dress for Less in Independence. She received an email that

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 stated people with part time jobs who are affected by COVID could apply.
stated there was no place to put down her full time job, and that it was her
understanding that the application form was asking for the job affected by COVID.
Alan Wade told her there was a miscommunication and that she would not qualify
for benefits, there would be a stop put on her claim, and the money paid would be
considered office error. She knows the system will bring up your state wages when
people apply for benefits, so she did not put anything about her full time job in the
comments.

stated she was not aware of a specific policy pertaining to the use of WFDI
numbers, but knew from “being around UI” that she should not use it to look at her
own claim.

Investigator note: No evidence was found that used her WFDI to access her own claim or
the claims of others in this group; however, she admitted that she did not list her full time state
position in her claim.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on her
part time employer. She received two weeks of benefits and they were auto paid. She was set up
with departmental overpayment. She did not request any benefits.”

WFDI N/A

Filed claim on July 21, 2020; did not receive any benefits
Interviewed September 11, 2020 via Teams

appeared visibly surprised to learn that an unemployment claim had been filed
under her name and SSN. stated she had no part time job and had not filed a
claim. said she has not shared her social with anyone other than where it was
necessary. The address listed in the claim contained a former address for . This
claim had already been stopped in the system for an identity issue and no payments
were made. IG Mynear recommended check her credit report to determine if
her identity had been compromised and to consider placing a fraud alert on her
accounts. Mynear forwarded this claim and ’s information to then-General
Counsel Amy Cubbage at Labor Cabinet. (copy of email in file)

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed her claim on her
part time employer. She was not paid anything and did not request any weeks.”

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 stated she filed her claim on April 16 based on information forwarded to her in an email
authored by Katrina Bailey, and forwarded to her from her co-worker Jana Glover. had two
part time jobs. She sits with elderly individuals in the evenings and/or on weekends through Elder
Care, and asserted that she works up to 70 hours per week in this part time job. also teaches
English as a Second Language via the internet to children in China. was “shocked” to find
out that “secondary” employment was covered under the pandemic assistance, but stated she did
not recall seeing the April 16 email from Holly Neal regarding claims for part time jobs.

claimed the term “secondary” implies you have primary employment, and this would mean
you did not have to report primary wages. She claims to have asked Bailey about offsetting wages,
and which wages would be reported. analogized her situation to that of teachers, who during
the summer break are not typically eligible for UI benefits, but who were eligible for PUA if they
lost a part time job. also claimed her supervisor, Greg Higgins, had made it known to her
he thought those with secondary employment could apply. also referred to the Governor’s
TV briefings.

used her WFDI to access her own claim multiple times, but noted she did not make any
changes to her claim. asserted she looked at her claim because she could not see certain
documents she uploaded on KEWES through the public portal. She asserted every claimant has
the right to see their documents, but the system was not allowing people to do so.

admitted she asked Jana Glover to check her claim but couldn’t recall why. On May 5, both
and Glover checked ’s claim. Glover advised there was a stop on her claim.
On same day, emailed the UI assistance inbox and Bailey, and stated it was her
understanding her claim should be converted to PUA. admitted to sending various emails
pertaining to her claim on work time but claimed she “had a lot of downtime.” On May 7, both
and Bailey checked claim.

On May 8, checked her claim again and then sent an email to Bailey. She informed Bailey
there had been a stop put on the claim and she did not know why. Further, she noted to Bailey that
if and when she started claiming her full time wages, her benefits would zero out. stated
that this made it “nonsensical” to say people with secondary income loss are covered.

received 8 weeks of benefits by auto pay plus an additional payment of $ after a

reconsideration she filed. opined she could not have gotten this additional money if she had
done something wrong. On May 11, again checked her claim. On May 12, requested
more training on the law, claiming that it was relevant to her own job, and not for her own claim.

On June 1, logged into her claim to request benefits, but only reported her part time wages.
When challenged that she knew she was supposed to report her full time wages, again
brought up teachers again and stated she knew that reporting her full time wages would zero out
any benefits. Despite being made aware of the management stop, continued to request
benefits by reporting only part time wages. When asked why she did this, claimed that the
stop was not “legal” but admitted that despite her position as an attorney for the Commission, she
never went to anyone in executive management to ask about it or express concern that the law was
not being followed.

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In a separate interview on August 3, 2020, Jana Glover stated that asked her to check her
claim on several occasions. In addition, Glover stated that asked her to check
claim. admitted she asked Glover to check claim because had
asked her a question and was a law school classmate. did not believe it was wrong to do so.

claimed her income was cut by 1/3 through loss of secondary employment and the money
she received is hers. She opined that if it is deemed an overpayment, it will be an office error,
payable in the event she draws UI in the future.

stated she was not familiar with the Executive Branch Ethics Act. maintained it was
not a conflict for her to continue writing appeal decisions for the UI Commission despite her open
claim and her steadfast disagreement with the wage reporting requirement and the management
stop.

Investigator note. accessed her own claim using her WFDI on 4/20, 4/23, 4/27, 5/5, 5/7,
5/8, 5/11, 5/19, 5/20. No evidence was found used her WFDI to access claims of others in
this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on her
part time employer. She was monetarily ineligible for a UI claim so she was set up on a PUA
claim. She filed effective 3-1-2020. She received 8 weeks of benefits and they were all auto paid.
She will be set up with a departmental overpayment. She did request weeks for the weeks ending
5-2 and 5-9 but the stop was on the claim so nothing was paid.”

Filed claim on April 15, 2020; did not receive any benefits
Interviewed on July 28, 2020 in Berry Hill Mansion Music Room

stated she understands UI processes and has worked in the field since 2009.
held a second job at a Frankfort gas station and she claimed her supervisor,
Don Sutcliffe, told her she could file. After filing, she began to question the action
stated there was a lot of confusion whether secondary, part time jobs actually
qualified. later learned from Kingsley that full time employees did not qualify.

On her initial filing, listed her part time job at the gas station. was
aware that Renea Houston had disqualified her UI claim and believed she was
supposed to set her claim up as PUA. went back to her claim to request
benefits and entered her state wages. She knew her wages would offset any benefits,
which in turn would also negate the $600.00 FPUC money. noted the rule
that in order to receive FPUC, a person has to draw at least $1.00 of benefits in
one of the other programs.

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 admitted using her WFDI to access her own claim as well as other claimants
because she was “curious.” asserted that as long as a person doesn’t make
any changes to their own claim or others, it was permissible to use her WFDI in
this manner. was aware of claim from word of mouth and looked
at his claim. also took issue with autopay.

Investigator note: accessed her own claim using her WFDI on 4/16, 4/20, 4/22, 4/27, 4/28,
4/29, 4/30, 5/1, 5/2, 5/3, 5/4, 5/5, 5/6, 5/8, 5/9, 5/11, 5/13, 5/15. accessed the following
claims of others in this group on 4/22, 5/2, 5/3, 5/8, 5/11, 5/15 on 5/2,
5/3, 5/4, 5/7, 5/8, 5/15, 5/20 and 5/29

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on her
part time employer. She did not receive any money on her claim. She certified for four more
weeks but did not receive anything because she reported her earnings.”

Filed claim April 8, 2020

Received $ in UI and $ in FPUC, all auto paid
Interviewed August 4, 2020 in Berry Hill Mansion Music Room

was recruited to assist in the pandemic and was moved up to a team leader
but was irritated he did not get what he thought should be an adequate pay
increase. thought his training was “spotty” and “difficult to follow.”

With regard to his own claim, he filed because of losses to his rabbitry side business
in Gray, KY. He admitted he utilized his WFDI to access his claim several times to
check status, and volunteered, “I probably shouldn’t have done that.” He offered
he “could have” gone into his own claim and paid, or “90’d”, himself but stated,
“I am not stupid.” said he also used his WFDI to check his wife’s claim
( ). asserted he never was told about any restrictions on the use
of this WFDI upon being issued the number, but that in early June he was made to
sign a Confidentiality/Security Agreement Form.

said he expected to get his first payment through the automatic payment and
did. His subsequent payments never happened. He affirmatively requested his
benefits several times and listed his wages earned from the state, to include
overtime. asserted that even if it has been determined that secondary income
was not eligible for benefits under state or federal law, he disagrees with the
decision because “it was what the Governor announced.” argued his claim
should never have been a UI claim, but rather a PUA to fulfill what the Governor
stated was available to him, and that he is still entitled to the benefits. also
contacted his state representative, Jim Stewart, and asked him to intervene.
was contacted by Stewart’s office and told they were looking at it. Following this

15
 interview, has sent several emails to OIG and to the Labor Cabinet,
continuing to request benefits for his loss of business income. emails to OIG
have been provided to EWDC HR.

Investigator note: accessed his own claim using his WFDI on 4/8, 4/9, 4/10, 4/14, 4/16, 4/17,
4/20, 4/22, 4/24, 4/27, 4/28, 5/1, 5/3, 5/4, 5/5, 5/8, 5/11, 5/18. OIG was not able to verify
admission that he viewed his wife’s claim, but OTS or COT should be able to do so. No evidence
was found that he looked at the claims of others in this group.

OIG requested updates on all claimants subject in this report to OUI Benefits Administrative
Branch Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on
his part time [business] and received two weeks of benefits and they were auto paid. He certified
for ten more weeks but he reported his earnings and did not receive any more benefits. He will be
set up with a departmental overpayment.”

Filed claim on May 7, 2020; did not receive any benefits

Interviewed July 30, 2020 in the Music Room

( is maiden name) works in the OUI Trust Fund section. She

initially was recruited to assist in the pandemic but was returned to her regular
duties with the Trust Fund. Reynolds stated she filed her claim upon Muncie
McNamara’s guidance. She stated that she and McNamara spoke often in regards
to the trust fund. Income from her and her husband’s trucking company was
reduced by the pandemic business closures. husband filed his own claim
and received benefits while , herself, did not collect. did not
check her own claim or anyone else’s.

Investigator note: No evidence was found that used her WFDI to access her own claim or
the claims of others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed her claim on her
part time employer. She was not paid anything and did not request any weeks.”

No WFDI Number Issued

Filed claim on April 25, 2020; did not receive any benefits
Interviewed on July 29, 2020 in Berry Hill Mansion Music Room

was not recruited to help with claims. “People” told her about applying
for benefits, and she heard that applied. Carla Rogers told her
people with full time plus part time jobs were getting benefits. She sells vinyl cut

16
 for some assistance because she only works a part time job because she needs the
money and that she was originally informed she could file a claim.

Investigator note: accessed her own claim using her WFDI on 5/4 and 5/6.
accessed the following claims of others in this group: on 5/4, 5/6; and
on 5/4, 5/6.
OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on
her part time employer. She received two weeks of benefits and they were auto paid. She will be
set up overpaid with a departmental error overpayment. She did not request any benefits.”

No WFDI Number Issued

E-claim filed March 30, 2020

Received $ in UI and $ in FPUC auto paid
Interviewed August 8, 2020 via Teams

This claim was e-filed by her part time employer, St. Claire Medical Center in
Morehead. She was not recruited to assist with claims. She was surprised to
received benefits and figured that St. Claire had e-filed for her. She confirmed this
with St. Claire HR. then contacted a local UI office, who told an
automatic payment had already processed. wanted the payments to stop
but also said she believed she could qualify because of her loss of secondary
income. has not logged in to file a claim or to affirmatively request further
benefits. has had to spend some of the money on a new motor for her car,
but she is concerned she will have to pay some of the money back, especially the
UI money since she also had a full time job.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie WASH. On October 5, 2020, WASH replied, “A mass claim was filed from her
part time employer. received one week of benefits which was auto paid. She will be
set up with departmental error overpayment. She did not request any weeks.”

Filed Claim April 4, 2020; did not receive any benefits

Interviewed July 29, 2020 via Teams

has been with the state for approximately 2 years and was asked to help with
pandemic claims. did not feel the training was adequate and if not for co-
workers, she would have been “lost.” applied for a part time retail job she
lost after hearing it might be eligible. logged into her claim through the
appropriate portal to request benefits, but did not go through with it because she
realized her wages would disqualify her from receiving any benefits. In regards to

19
 her use of her WFDI number, knew that using her number to look at her own
claim was not allowed, and did not do so.

Investigator note: No evidence was found that used her WFDI to access her own claim or
others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed her claim on her
part time employer. She was not paid anything and did not request any weeks.”

No WFDI Number Issued

Filed claim on March 30, 2020

Received $ in UI and $ in FPUC auto paid
Interviewed August 19, 2020 via Teams

started her state job on April 16, 2020. She is in training to be a VR

counselor. She has no experience in UI. was collecting UI unemployment
assistance for a previous job, before she started her current state job. She
anticipated starting state employment earlier than April 16, and therefore had
stopped requesting unemployment benefits. When her state job did not start as
anticipated, she reopened her old claim, intending to claim the period from March
30 to April 16, 2020. She put the same information from her old claim into her new
claim. said she was not aware of how the pandemic had affected the
process. She did not know that listing a job she lost in 2019, not due to the
pandemic, would trigger pandemic funds. stated the process was
confusing.

Investigator note: did not start employment with EWDC until 4/16/20. Previous claims
were from 10/23/2019 to 2/29/2020. She reopened her claim on 3/30/20. She was reported to OIG
as having been paid $ in UI benefits, but in reality it is $ since 3/30/20 and $
in FPUC. She was paid weeks 4/4, 4/11, and 4/18. This does not appear to be an improperly filed
claim.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ just started working
for OVR on 4-16-20. The last time she drew benefits was for the week of 4-18-20. She did not file
for COVID related claim”

20
Despite his alleged objections to autopay and lack of wage reporting, filed his own claim
after an alleged one-on-one meeting with McNamara in which McNamara told him he could file.
acknowledged that this discussion was not memorialized in any way. later claimed he
had also asked his “supervisor” Greg Higgins if he should file a claim. [It should be noted that
does not report to Higgins.]
A review of the claim as filed by reveals numerous inconsistencies and misleading
information. Instead of filing his claim to identify his part time job with Innovative Employee as
his employer, listed “Commonwealth of Kentucky” (COK). stated he did this because
he was “forced” to file through UI, and COK was his “most recent employer.” claimed he
didn’t have any “ability” to reflect his part time employer. When OIG noted that all other
interviewees who filed claims listed their part time job as the most recent employer from which
they separated, opined, “They’re wrong.”

On his claim, chose separation reason (from a dropdown menu) as “full time to part time
work.” As his secondary separation reason, chose “reduced hours due to workload.” He
listed his “start date” as 5/15/2012, which coincides with his start date for COK. He listed his “last
day worked” as 4/10/2020; however, was still employed by COK on that date (and up until
the date of this interview). stated the 4/10/2020 “must have been” the date his part time job
ended, despite an earlier statement that it ended “sometime in March.” inconsistently
claimed his “most recent employer” would be the employer you left most recently, yet maintained
that COK was his most recent employer even though he was still employed. Nothing on his claim
states the identity of his part time employer and his entries as to an alleged reduction of hours and
his “last day worked” is inconsistent with his COK employment on which he filed.

was questioned regarding his basis for asserting in his claim that he went from “full time to
part time” particularly since he did not list his part time job. Time and attendance records provided
by EWDC demonstrate that from March 2, 2020 to May 31, 2020, recorded a total of 697.75
hours. admitted these records reflected that during this period, he recorded 188.25 hours in
6ADL (overtime), in addition to his regular 37.5 hour workweek. asserted that, in the
absence of the pandemic, he would have worked all of these hours plus his part time job.8

Prior to filing his own claim, was heavily involved in drafting a “Self-Certification” form
that needed to completed by every prospective claimant per USDOL directives. This form would
also need to be sent to anyone who previously filed an unemployment claim during the pandemic.
described his work as “voluntary” because he knew such a certification was being required
by USDOL.

communications from USDOL. also asserted that he still could participate in appeals decisions involving facts
similar to his own claim (i.e., secondary, part time jobs), despite his claim.
8
previously stated he was paid approximately $18 per hour for his part time job. ’s state salary of
$45,226.80 divided by $18.00 per hour equals 2,512 hours. These hours (2,512 hours) divided by 52 weeks per year
equals 48 hours of work time per week. maintained that the CARES Act supports his position that he is entitled
to a PUA claim as though he could have worked 48 hours per week at $18 per hour, even while still working his full
time job at the state (37.5 hours per week, plus any overtime). This would equal more than 85 work hours in a week.
admitted that he has not obtained a legal opinion from an attorney regarding his interpretation of the CARES
Act.

24
job is to “deal with” overpayments.9 Houston responded to his email to say she realized this was
an autopayment and amended it. In her interview, however, Houston stated that had asked
her to rewrite his UI claim as an “administrative error.”

In her interview, Katrina Bailey stated that she told Houston that the actions Houston took on
claim were wrong. Bailey opined that she did not believe Houston knew this was wrong
at the time, but was just doing what insisted she do. Bailey noted that continued to
insist to many people that “everyone” was eligible to collect benefits.

stated he did not affirmatively request further benefits after receiving autopay amounts for
six weeks, and acknowledged that he would have been required to report all wages at that point.
also asserted that even if he had reported his full time wages and had not collected the $1,080
in UI, he was entitled to the $1,800 in FPUC payments despite the “$1 rule.” stated he also
filed for reconsideration on his PUA payment, asserting that it should be higher because he would
be entitled to a PUA calculation based on all his 2019 wages, including the wages earned for his
full time COK job that he still retained.10

stated he is familiar with the Unemployment Insurance Program Letters issued by the U.S.
Department of Labor and agreed that he routinely circulates UIPLs. acknowledged
exchanging several emails with various individuals regarding his various (unsolicited)
interpretations of the U.S. Department of Labor’s Unemployment Insurance Program Letters.
could not identify any UIPL that addressed unemployment benefits for a secondary, part
time job.

Under the UIPLs, claimants were required to receive a monetary benefit under an unemployment
program (regular UI, PEUC, PUA, or other programs not relevant here) in order to receive the
additional $600 FPUC weekly benefit. received $ in FPUC benefits, but maintained
that despite various UIPL’s use of the words “receiving” or “collecting” an underlying benefit, the
intent was that an individual merely be eligible to receive a benefit.11

9
It should be noted that all of email communications referenced herein occurred through the state email system,
apparently during normal work hours billed by . In addition, discussion about his claim with Fox occurred
on state time.
10
In a 3/31/20 email from to Christine Bellehelen, states that the CARES Act “indicates to me that the
weekly assistance amount is calculated in the same manner that normal UI WBAs are calculated.” email then
references section 2104 of the CARES Act; however, section 2104 provides for the payment of FPUC to individuals
who would be determined by state law to be entitled to receive regular unemployment benefits (not PUA). Thus, the
CARES Act does not support position.

11
See, e.g., UIPL 15-20 (4/4/2020; “4. Guidance” on page 2) which expressly provides that in order to receive the
additional $600 weekly FPUC, an individual must be “receiving” one of the types of unemployment benefits.
Subsection 4.a further uses the term “collecting” a benefit (rather than “receiving”) as a requirement Attachment I-5
to UIPL 15-20 states that “if an individual is eligible to receive at least one dollar ($1) of underlying benefits for the
claimed week, the claimant will receive the full $600 FPUC.” See, also, UIPL 14-20 (issued 4/2/2020). Page 4 of
UIPL 14-20 states that FPUC is available to those who are collecting certain types of unemployment benefits.

27
As a claimant, was responsible for familiarizing himself with all terms and conditions
contained with a document referred to as “PAM UI-400” titled “Your Rights and Responsibilities
While Claiming Unemployment Benefits and Important Things to Know.”12 acknowledged
his knowledge of this document in his state job, and noted that he had even undertaken drafting
possible revisions to the PAM-UI-400 for PUA claims. acknowledged that the original
PAM-UI-400 would have been in place until and unless a revision was implemented.13
admitted that PAGE 4 of the PAM-UI-400 states:

The actual amount of your benefit payment may also be less than your weekly
benefit amount due to required or elected deductions. We will deduct eighty percent
(80%) of the gross wages (before deductions) that you EARN during a week
claimed. It is required that you report all wages you earn while receiving
unemployment insurance benefits. Failure to do so could be considered fraud.

acknowledged that a claimant’s assertion that they did not “know” what was in the PAM-
UI-400 would not be a valid defense in an appeal. also stated that at the time he filed his
claim on 4/10/20, he believed the process was inconsistent with state and federal law.

was shown an OET Confidentiality and Security Agreement dated 5/23/2011 with
social security number and typed signature. EXH 15. did not specifically recall the
form, but acknowledged that Lisa Cochran, whose name appears on this form, was his supervisor
at that time. did not have any reason to believe it was not an authentic form contained within
her personnel file, just that he did not recognize it. was directed to the third paragraph of
that Agreement regarding access to confidential information or records. When asked whether his
actions in asking others to view his claim or discussing his claim violated that provision,
said no, because he didn’t access these things “directly” but only “asked” others to look at his
claim.

then stated that he is paying back the $1,080 UI benefits in increments of $90 per month.
admitted that he believed it would be a conflict of interest if he had appealed the
overpayment designation.

Investigator note: No evidence was found to indicate used his WFDI to access his own claim
or the others in this group; however, admitted to asking other employees to view his claim.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim for
benefits. The employer he listed on his claim was the Commonwealth of Kentucky and stated that
he went from full time to part time. He states that he is separated from his second part time job but
does not list it on the employer screen. He was auto paid for the first two weeks. This

12
All claimants are provided an electronic link to this document when filing an unemployment claim online through
the KEWES portal. (Claimants who filed claims in person in a Career Center were provided a hard copy of this
document.)
13
forwarded his drafts of these documents via email to Stephanie Ebbens-Kingsley as late as May 25, 2020.
Therefore, the original PAM-UI-400 was in place at the time filed his claim in April 2020.

28
Unemployment claim was set up overpaid and the stop was changed to a stop 1 on 4-30-2020 by
Renea Houston. A PUA claim was set up by Katrina Bailey and two weeks were released by Renea
Houston. An overpayment will be set up on this claim.”

No WFDI Number Issued

Filed claim April 14, 2020

Received $ in UI and $ in FPUC, all auto paid
Interviewed August 19, 2020 via Teams

has never worked in UI and was not recruited to work UI claims. She filed
because the Governor stated in his speeches that she should. She did not check
with UI staff to confirm what the Governor said and simply applied to see if she
qualified. worked part time in a nursing home, Health Pro Heritage in
Greenville, KY. Her benefit money was direct deposited. Upon logging in through
the portal to request benefits, did not report earnings because she assumed
they were asking about earning from her second job, of which she had none. When
later checking on her claim through the portal, she noted that it was under
investigation but did not learn why. She is back to work in her part time job.
claimed she did not know the difference between UI and PUA monies.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on her
part time job. She received two weeks that were auto paid. A stop was put on her claim and she
continued to request weeks for 6 more weeks but was not paid because of the stop. She will be set
up overpaid on a departmental error overpayment.”

Filed claim April 7, 2020

Received $ in UI and $ in FPUC all auto paid
Interviewed August 11, 2020 via Teams

stated in her interview she does not have UI experience. She was recruited
to help and received sporadic training, which was not very detailed. held a
part time job at Hickory Oak Restaurant in Bowling Green. asserted that
during a Skype meeting with Lisa Jones, she was told she could apply for benefits.
When applying, she was not given the opportunity to list her state job. She realized
she received too much UI money and tried to call in to straighten things out, and
wanted to send a check to pay back the money. In regards to the WFDI number, she
received her number via email. No instructions were given on any use or
restrictions. She admitted using her WFDI to look at her own claim. She did not
make any changes because she knew that would be inappropriate. She did not look

29
 at the others who filed. also claimed she had heard from the Governor’s
briefings she could apply.

Investigator note: accessed her own claim using her WFDI on 4/7, 4/8, 4/17 and 4/21. No
evidence was found that accessed the claims of others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed a claim on her part
time employer. She was auto paid for the first two weeks. She claimed 4 more weeks but reported
her earnings so no benefits were paid out. She will be set up with a departmental overpayment.”

No WFDI Number Issued

Filed claim on March 20, 2020

Received $ in UI auto paid
Interviewed July 6, 2020 via Teams

was not recruited to help take claims and she does not have a WFDI
number. She stated she had to work a second job in order to make ends meet and
worked part time at Five Seasons Sports Club. She filed because the gym advised
their employees they would qualify for benefits. recognized
immediately her benefit amount was based on her state wages. She received an
eligibility statement (in case file) listing the income from her state job, but it was
not her intent to claim against it. She tried to contact UI to report this in
approximately six phone calls and two emails, but could never get through. She
wrote in the application comment section that she “worked elsewhere.” She did
not affirmatively request benefits following the auto pay.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed on her part
time employer. She received two weeks thru auto pay. She will be set up overpaid and because
she was auto paid it will be with a departmental error overpayment. She did not request any
benefits.”

Filed claim on April 17, 2020

Received $ in UI and $ in FPUC auto paid
Interviewed September 25, 2020 in the Berry Hill Mansion Music Room
Resigned effective November 30, 2020

was employed with the Commonwealth for approximately 9 years, and began her
employment in the Interstate Section of OUI. was a Workforce Development Operations
Administrator. Her last supervisor was Debbie Wash; at the start of the pandemic, her supervisor

30
was Don Sutcliffe. stated that she “hated the idea” of auto pay. She said everyone was
questioning how claimants would report their earnings but the general consensus was that it was
“out of our hands.” She said that most of the communication about full-time employees applying
for loss of part-time employment was received by word of mouth but noted a mass email stating
those employees with lost part-time wages could file.

has a personally assigned WFDI number and has extensive access to the system.
denied being made aware of any restrictions for the use of the number. later
admitted that looking at your own claim is “frowned upon” but asserted it was okay to view other
claims as long as you are not “making or rendering a decision that would deem them payable.” As
discussed herein, used her WFDI number to access her own claim and those of coworkers
on numerous occasions. admitted removing stops and/or releasing payments for
coworkers through this access.

With regard to her own claim, stated she served as an assistant to the director of the music
program for the children’s choir at First Christian Church, and occasionally helped with the
nursery. received $ in UI and $ in FPUC, but upon questioning admitted that
the church had obtained a Payroll Protection loan and that she had continued to receive her salary
for the children’s choir work, without any significant wage reduction. She justified filing her claim
as a loss of possible additional part time hours, because she also assisted in other church areas
beyond her position as assistant to the director.

First Christian Church Senior Minister, Reverend Dr. John T. Opsata, was interviewed on Tuesday,
August 18, 2020 and he stated that prior to March 22, 2020, the church was conducting business
as usual. He provided a copy of the Financial Committee Meeting notes from March 22, 2020,
which outlined a plan to decrease expenses to include reduction of staff during the state of
emergency. The meeting minutes state that a few employees – to include –
would have no reduction in salary and noted that would continue to provide these
services. Dr. Opsata confirmed that continued to perform her duties as the church
produced live streams of services.

In her UI claim, states the nature of her self-employment as “I teach children music,
assistant music instructor.” She indicated she had lost “10-30” hours with a last day worked of
March 20, 2020, and further stated, “I am not able to work at this time because of the non profit
organization is not able to be open due to the COVID-19.” However, during the interview
admitted that she continued to be paid her salary and that the benefits she received greatly exceeded
any amount she might have received for any additional part time hours. According to Church
payroll records, there was no break in payment of salary to . Records indicate she was
paid on April 15, 2020 yet two days later she filed her UI claim specifically for the position of
music assistant for which she was continuing to be paid.

Payroll records provided by the church verify that and was paid $127.50 each week from
2/28/2020 through 8/31/2020, totaling $1,657.50. did not receive any payment for
nursery services during this period; however, ’s wages for occasional additional services

31
in the wrong phone number for First Christian Church. In a separate interview on September 17,
2020, Lowe stated she filed claim per her request. Lowe agreed that is a peer
and that she understand how this action could be a potential conflict.

In addition to using her WFDI number to access her own claim, admitted she used her
WFDI to access other employees’ claims. admitted reviewing claim on April
13, 2020 but stated she made no changes and “only” looked at his claim to use as a template to file
her own claim correctly. She explained that he is an attorney and was the very first to file a claim.
said that her goal was to “mirror” his claim in filing her claim.
admitted using her WFDI to access claim, but claimed to not recall
accessing it multiple times. filed her claim of April 15, 2020. On April 16,
removed the stop and then put the stop back on. On the following day, reviewed the
claim again and removed a stop. acknowledged she removed the stop but claimed she
then put the stop back on. Her stated objective was to stop the claim from being paid.
asserted that at that time they did not want to receive state UI funds, so they wanted to stop the UI
claim and set up a PUA claim to receive federal funds, but could not explain why she removed
stops. admitted that she and had discussed placing stops on each other’s claims
to avoid a UI payment.

On April 20, 2020, l accessed claim and added the note “No issue w/nonsep”
and then backdated the claim to March 29, 2020. admitted asking to backdate her
claim for PUA purposes, and asserted that based on instructions received, it was proper to backdate
PUA claims. stated that she later requested that place a stop on her payment in
order that the claim would not be processed; however, this was never done. accessed
claim on April 20, 21, 22, May 4, 5, 6, 8, and 18, 2020 but did not place a stop at any
point.

recalled conversations with and and said she put a stop

on ’s claim and attempted to put a stop on claim. filed her claim on
April 16, 2020 and reviewed her claim on April 28, May 4 and 5, 2020. said
she attempted to put a stop on ’s claim but payments had already been issued.
reviewed claim on April 16 and removed a stop. She also reviewed claim on April
22, 28, and May 4, 2020, and recalled backdating claim, allegedly per request.
claimed she placed a stop on claim to stop payment, but when questioned further,
admitted that she had actually removed the stop. She could not explain the removal, but
still insisted the objective was to stop the payment.

On April 28, 2020, Renea Houston removed a stop from claim and notated “ineligible
UI, sent email to set up PUA.” insisted that this note should have stopped the claim
(despite the removal of the stop), but acknowledged that on the following day, April 29, 2020, an
auto payment was generated to her. On May 1, 2020, a stop by executive management was placed
on her claim. claimed she never used her WFDI number to look at her own claim, but
WFDI records reveal she checked her claim on May 13, 2020.

33
 No WFDI Number Issued

Filed claims April 11, 2020, and April 24, 2020

Received $ in UI and $ in FPUC all auto paid
Interviewed August 11, 2020 via Teams

has been with the state 4 years, all in Adult Education. She was not asked
to help with claims. applied for her lost part time job at Buffalo Trace in
Frankfort. She said there was a group of employees at the distillery discussing the
CARES Act. She did her own research on the internet and found an article on USA
Today, which stated a person could draw benefits on the loss of a second job so she
applied to see what would happen. When she received her payment, she thought it
was too high and that she probably should not have received as much as she did.
had a friend call OUI to find out what was going on. The friend finally got
through on the phone and allegedly was told people like were not really
eligible, but that the money would not have to be paid back. Upon hearing this,
logged back into her claim through the portal and saw the questions
pertained to her full time job, and she did not pursue requesting benefits.
denied attempting to open another claim to get more money; she stated that she
was simply trying to read the application questions again. said she only
wanted benefits from her part time job but the application process did not
accommodate that, so she quit applying.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, filed her claim on her
part time employer. She received two weeks of benefits and they were auto paid. She will be set
up with a departmental overpayment. She did not request any benefits.

Filed claim on May 14, 2020; did not receive benefits

Interviewed July 30, 2020 in the Berry Hill Mansion Music Room

has about eight years with EWDC and was not asked to work UI claims
during the pandemic. stated she filed her claim for her part time job at
Rhino Laces in Lawrenceburg because she was told, and allegedly confirmed by
Whittney Sherman, that people with part time jobs could apply during the pandemic
and that their UI claim would be changed to a PUA. went back into her
claim to request benefits and reported her wages. did not receive any
benefits but did not complain because she felt in her “gut” that the whole thing was
wrong. In regards to the use of her WFDI number, readily acknowledged
she should not look at her own claim and those of others, but admitted she had done
so. She defended herself stating she “only” looked but did not change anything.

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 She checked to see if had filed to “reassure” herself in filing her own
claim.

Investigator note: accessed her own claim using her WFDI on 3/17. accessed
on 5/2.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed her claim on
her part time employer. She was not paid anything .She requested four weeks but reported earnings
so she did not receive any benefits.”

No WFDI Number Issued

Filed claim on June 8, 2020; did not receive any benefits

Interviewed September 10, 2020 via Teams

has 24 years of state employment. She was asked to help with claims but
was pulled away and was not issued a WFDI number. filed her claim
because she has a part time job at the Johnson County Public Library. She said
she listened to the Governor on TV and was also told by her friend
(mother of employee ) to apply. said she knew nothing
about auto pay and did not affirmatively request benefits because she did not feel
right receiving payments while being a state employee working full time.
logged in to her claim to request benefits, listed her wages, but then did not submit
the request. When asked if she did not feel right about receiving benefits, then why
apply in the first place, claimed she was encouraged by her husband, who
also works for the state as a security guard at the Carl D. Perkins Center.
claimed she did not know coworker received benefits.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, filed her claim on her part
time employer. She was not paid anything and did not request any weeks.”

WFDI Unknown

Filed claim on May 3, 2020

Received $ in UI and $ FPUC, all auto paid
Interviewed August 11, 2020 in Berry Hill Mansion Music Room

was not asked to assist with claims, as it would constitute a conflict with
his position as attorney for the Commission. asserted the rules published
by DOL were not followed from the beginning, yet claimed he was not
aware of the decision to auto-pay.

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 UI benefits he may receive in future claims by him. He was told not to worry
because it was legitimate to apply during the pandemic. was later moved
to a PUA account (moved on April 28) and he received some additional funds
through that program, but everything has stopped now. never went back
to his claim to affirmatively request benefits and has returned to his work selling
cars part time. denied asking anyone to manipulate his claim, but admitted
he did ask Trina Allen and Karen Carter to “look” at his claim. He denied asking
anyone to set him up on PUA. said if he owes the money back, he has it to
pay back.

Investigator note: did not have a WFDI number to access his claim or anyone else’s.
However, WFDI access records show DWI employees Karen Carter, Trina Allen and Angela
Higgins did access claim. Angela Higgins was interviewed on August 3, 2020 by OIG.
She stated Allen directed her to set up on PUA, which she did. Higgins did not think it
was right to set up on PUA but that rules and direction were changing everyday and that
she was just following orders. Carter was interviewed on August 3, 2020 and stated she did not
know or recall or his claim.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, WASH replied, “ filed a claim on
his part time employer. A stop was put on the claim and when it was reconsidered the stop came
off and he was auto paid for two weeks. He was held overpaid with a departmental error
overpayment. He did not request any weeks.”

E-filed from Keeneland on March 23, 2020

Received in UI and $ in FPUC auto paid and manipulated (90’d)
Interviewed on September 24, 2020 in the Berry Hill Mansion Music Room

has been employed with the Commonwealth for approximately 3 years, and began his
employment in the OUI Trust Fund branch. received a one-year detail on July 1, 2019 to
the in OUI Benefits and reverted back to his Trust Fund position in July
2020. He had no previous experience in OUI Benefits. stated he was supervising
approximately 10 to 12 people in that position, which grew to approximately 40 to 50 call center
staff during the pandemic.

recalled several meetings where experienced OUI employees expressed concerns to

McNamara regarding his stated intent to automatically pay claims for the first two weeks. He
recalls that he and others stated that “autopay” would create many issues, but that McNamara was
not receptive. did not know where the “autopay” concept originated, but his general
impression was it came “from the top down.” later stated that he believed the Governor
wanted to “be sure people didn’t suffer needlessly.” did not have reason to believe anyone
in state government, including the Governor, told McNamara to disregard laws.

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wage reporting would “offset the benefit amount that we would earn from Keeneland. It’s not fair,
I make more 8 days at Keeneland than I make all month at the state.” This email documents that
was aware of the wage reporting requirement soon after his receipt of benefits, yet could
not demonstrate he made anyone aware of his “test” to receive payments. responds by
noting that she knows a “ton of people claiming second jobs and “making bank, like $600 a week!”
Plus the extra $600.” She states she “does not know why they would file, knowing we work for
the state” and asks to “make sure you clear what you did for me.” This statement suggests
believed to be doing her a personal favor.

Investigator note: accessed his own claim using his WFDI on 3/28, 4/8. No evidence
was found that accessed the claims of others in this group; however, he admitted that he
viewed and manipulated claim, and may have done so for others.

OIG requested updates on all claimants subject in this report to OUI Benefits Administrative
Branch Manager Debbie Wash. On October 5, 2020, Wash replied, claim was
filed by his part time employer as a mass claim. His first two weeks were auto released but there
was a stop on his claim. The stop was removed by Katrina Bailey and the weeks were released by
on 4-14-20. Then the claim was reconsidered and two more weeks were auto
paid on 4-22-20. The first two weeks have been set up over-paid and he is in a payment agreement
to pay back 92.00 per month. The second two weeks will be set up overpaid also but because it
was auto paid it will be a departmental error overpayment. He did request for benefits for the week
ending 5-9 but he reported his earnings so he did not receive anything.”

Filed claim April 9, 2020; did not receive any benefits

Interviewed July 29, 2020 in Berry Hill Mansion Music Room

has worked in OVR for approximately 9 years and was asked to help with
claims during the pandemic. She had no previous experience with UI. felt
her training was inadequate. She was tasked with assisting with identity issues for
claimants. said she filed her claim for her part time job based on an email
she received stating people who lost part time work due to COVID could apply.
She ultimately was denied any benefits. She stated it was “not fair” that some
people received money and some, like her, did not. admitted she requested
(other employees) Alan Wade, Carla Rogers and Amber Watts to look at her claim
and help her. also admitted she used her WFDI number to look at her own
claim. She asserted Wade tried to get her paid but a stop was put on her claim.
admitted she asked someone, perhaps Watts or Rogers, to take the stop off.
Later, during a meeting with Wade, he told her state workers like her with part time
jobs did not qualify for the benefits. logged in to request benefits but did
not enter wages or submit her request, because her state wages would disqualify
her. also acknowledged an email she received from Alan Wade in April,
telling her she was not qualified for unemployment. did not respond to that
email but forwarded it to Katrina Bailey. Bailey responded that would be

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 disqualified for UI due to full time employment and moved over to PUA (see file).
On May 7, checked on the status of her PUA claim with Wade and claims
that Wade advised her he had “90’d” her payments to release her benefits. In his
separate interview, Wade denied “90ing” any payment, but rather he placed a
STOP on claim. Wade further stated that he contacted after seeing
that both Rogers and Watts had tried to pay her claim. Wade stated to that
she was not entitled to benefits, but noted that directions from McNamara during
this period were inconsistent and contradictory. discussed her claim with
several of her co-workers, who appear to have then accessed her claim to see it.

Investigator note: accessed her own claim using her WFDI on 4/10, 4/14, 4/17, 4/21, 4/22,
4/23, 4/24, 4/27, 4/28, 4/29, 4/30, 5/1, 5/4, 5/5, 5/6, 5/7, 5/8, 5/11, 5/12, 5/18, 5/27. No evidence
was found that she looked at the claims of others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, filed a claim on her
part time employer and did not receive any benefits. She did not request any benefits.”

Filed claim on April 22, 2020; did not receive any benefits
Interviewed July 29, 2020 via Teams

has 12 years experience in OUI and was asked to help with claims
during the pandemic. She did not attend any formal training. filed a
claim because it was discussed in meetings that people who lost part time jobs due
to the pandemic were eligible. She also referred to emails she had received. After
filing, she was able to make arrangements with her part time employer, Mary Kay,
and continued working that job. She asserts that she contacted Don Sutcliffe and
requested her claim be stopped. She did not request any benefits. She added that
she knew UI generally applies to loss of a full time job, but asserted that during the
pandemic, part time job loss was covered. admitted to using her WFDI
number to view her claim, asserting that she was checking to make sure no monies
were being sent to her because if so, she wanted to contact her bank and reject the
deposit. admitted she knew it was wrong to use her WFDI number in
this manner.

Investigator note: used her WFDI to access her claim on 3/27, 4/17, 4/20, 4/22, 4/23,
4/24, 4/25, 4/27, 5/2, 5/4, 5/5, 5/12, 5/28. No evidence was found that accessed the
claims of others in this group.

OIG requested claim updates on all subject employees from OUI Benefits Administrative Branch
Manager Debbie Wash. On October 5, 2020, Wash replied, “ filed her claim
on her part time employer. She was not paid anything and did not request any weeks.”

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 POLICIES/PROCEDURES, TRAINING MATERIALS and OTHER INSTRUCTIONS

While EWDC did not possess a comprehensive manual of general administrative policies, certain
existing Policies and Procedures as well as voluminous training materials were provided to OIG
by EWDC HR and may apply to certain subject employees. OIG also was provided any training
acknowledgements in EWDC’s possession signed by some of the subject employees. This material
is discussed in greater detail in Appendix B, attached hereto and incorporated herein by reference.

FINDINGS

By Allegation

ALLEGATION 1: DWI employees filed for and/or collected pandemic unemployment

benefits when they knew they were not eligible for them.

FINDINGS: Substantiated as to OUI employees. OUI employees all knew that persons
with full time employment would not qualify for UI benefits, and knew that traditional UI claims
required wage reporting and the application of state law (and wage reporting) to determine the
weekly benefit amount. OUI employees are familiar with KEWES and KNET applications and are
required to understand claims processing and other procedures as outlined in various training
materials and policies. Despite this information, full time OUI employees with secondary, part
time jobs filed claims, asserting that they were informed by management that they would qualify
for pandemic assistance for the second job. They also knew, however, that the automatic payment
would be made prior to the requirement to report their wages and would likely result in
overpayments. In addition, the automatic payments were excessive and OUI employees knew or
should have known that these benefits were being paid as unemployment benefits (not PUA) based
on the same full time position for which the employee was still being paid. These same employees
also collected the additional $600 FPUC payment, despite potential knowledge of USDOL’s “$1
benefit rule.” See individual interviews.
Unsubstantiated as to non-UI employees. Several of the DWI employees identified by
EWDC did not possess experience in unemployment insurance benefits and do not appear to have
sufficient knowledge of the UI systems to have known they were not eligible to collect pandemic
unemployment benefits for a secondary, part time job. These employees pointed to EWDC emails
and/or the Governor’s briefings as support for the belief that they could and should file a claim for
a secondary job. See individual interviews.

ALLEGATION 2: Upon filing claims, employees did not properly disclose state employment,
and/or may have intentionally altered the employer addresses so that letters to the employer
would be delayed or misdirected.

FINDINGS: Unsubstantiated as to address manipulation. OIG did not locate instances

of deliberate manipulation of employer addresses. It appears that the massive slowdown of mail
processing due to the pandemic contributed to EWDC not receiving timely notices of claims filings
by employees.

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 Substantiated as to failure to disclose state employment by certain OUI employees.
Similar to Allegation No. 1, experienced UI employees appear to have circumvented the ability of
the UI systems to detect the existence of a full time job. Some employees did enter a “note”
regarding their COK employment. Most employees asserted that they listed only the part time job
as “most recent employer” because that was the job against which they intended to claim benefits
and were told they could file if the pandemic affected any income. Given the conflicting
information being disseminated regarding PUA claims, a final determination rests on a case-by-
case basis as to the manner in which each OUI employee filed his or her claim. See individual
interviews.

ALLEGATION 3: Some of the employees may not have had part time jobs.

FINDINGS: Unsubstantiated. It appears from a review of available wage records,

internet business verifications and site visits, that the employees reported by EWDC had part time
jobs; however, several of these employees likely received benefits significantly in excess of their
lost part time earnings. See individual interviews.

ALLEGATION 4: The employees improperly accessed their own or others’ claims, removed
“stops” on claims to obtain payment, and/or manipulated the claims of coworkers, friends,
or family.

FINDINGS: Substantiated as to certain employees. See individual interviews.

ALLEGATION 5: The “automatic payment” process was exploited by employees filing new
or duplicate claims.

FINDINGS: Unsubstantiated. It does not appear that any employee filed a duplicate
claim; however, certain employees had “eClaims” filed by their employer which likely created the
appearance of multiple claims. In addition, while the “automatic payment” was only supposed to
issue the first 2 weeks of benefits, in some employees’ cases, he or she continued to receive
automatic payments for a longer duration. These continued payments without any reporting by
the OUI employee might form a basis for personnel action. See individual interviews.

ALLEGATION 6: Employees were actively undermining or disregarding leadership.

FINDINGS: Inconclusive. Certain OUI employees attempted to alert McNamara to

numerous issues with autopay but did not elevate those concerns to other management. Certain
OUI employees “followed” directives that they knew or should have known were wrong.

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ALLEGATION 7: After an “executive management stop” was placed on employees’ claims
on or about May 1, 2020, some employees continued to attempt to manipulate claims in an
attempt to release payments.

FINDINGS: Substantiated as to certain employees. In some cases, stops were removed

and/or code “90s” were entered in the mainframe to release payments – and this conduct occurred
before and after the executive management stop. In other cases, it appears that steps were taken
to “disqualify” an employee from a regular unemployment insurance claim and move the employee
to a PUA claim to obtain or permit payment. See individual interviews.

ALLEGATION 8: One full time employee received nearly $10,000 in pandemic assistance.

FINDINGS: Substantiated but not improper. One employee had a prior unemployment
claim (before her state employment commenced) through which she appears to have
(appropriately) received more than $8,000. This employee reopened her claim when her state
employment start date was delayed, and collected additional amounts. See
interview.

Additional Findings

The employee conduct investigated herein reveals potential misconduct beyond the specific
allegations set forth above, including:

 EWDC employees using work time and work resources to access their own or other claims,
send email or otherwise communicate with co-workers about their own claims and similar
actions set forth in the individual interviews. Certain EWDC employees also used work
resources in an inappropriate or unprofessional manner, such as drafting and/or storage of
excessive amounts of personal materials not related to their position, as well as the use of
Teams “chats” for personal conversations, including offensive language. This conduct also
encompasses numerous violations of EWDC policies as well as violations of the Executive
Branch Ethics Act and also may constitute a lack of good behavior or unsatisfactory
performance of duties within the meaning of 101 KAR 1:345 sufficient to support
personnel action.

 There appears to be significant misuse of WFDI numbers by EWDC employees. This

misuse constitutes misconduct for many if not all of the identified employees, as set forth
in the individual interviews. Moreover, the investigation suggests that other EWDC
employees misused WFDI access, even if the employee did not file a claim and/or no
benefits were received. This misuse was compounded by an apparent lack of due diligence
in ensuring that any employee with WFDI access (especially those who volunteered to
assist with claims) was properly trained and required to sign a Confidentiality and Security
Agreement. This finding is tempered, however, by the recognition that EWDC was
responding to an enormous increase in claims filing and was attempting to quickly enlist
adequate staffing to help claimants.

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 RECOMMENDATIONS

As set forth in this Report of Investigation, disciplinary action of the identified EWDC (and/or
now Labor Cabinet) employees should be considered, ranging from written reprimands up to and
including dismissal from employment. Other recommendations are:

 Mandate annual Ethics Act training (with signed acknowledgements) for key employees

 To the extent not already completed, the Cabinet should develop comprehensive policies
and procedures, disseminate these documents, and obtain signed acknowledgements on an
annual basis from each employee. This could be accomplished as part of the annual
employee review process.

 Develop and administer training to outline supervisory and programmatic responsibilities

in accordance with statutes, regulations, and law. This training should also establish and
outline expectations for a higher level of accountability for supervisory personnel related
to oversight of UI programs

 Additional review of conduct by employees who did not file their own claim, but appear
to have improperly utilized WFDI numbers and/or improperly assisted others employees
with claims as set forth in this Report. As identified herein, this conduct was noted upon
review of the claims filed and indicate certain other employees viewed and/or altered one
or more of the identified employees’ claims with no apparent business reason

 Review employee access/privileges in regards to WFDI access to KEWES and KNET, to

ensure proper authorization based on job responsibilities and ensure required training is
completed and acknowledged in writing by the employee

 Develop a means of comprehensive communication to ensure that programmatic changes

and critical information is uniformly and timely provided to all staff in language that can
be easily understood

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 DISTRIBUTION
This Report of Investigation will be provided to the Governor’s Office of Legal Counsel, with
further dissemination to be determined by that Office.
Submitted by:
OFFICE OF INSPECTOR GENERAL
MARYELLEN MYNEAR, EXECUTIVE DIRECTOR
CHUCK HINES, INVESTIGATOR
JENNIFER L. WOODS, INVESTIGATOR
700 Louisville Rd.
Frankfort, KY 40601
(502) 564-0501
maryellen.mynear@ky.gov

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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