Time for Employment Security Department to come clean

Employment Security Department officials should be bending over backward to help auditors figure out how fraudsters were able to help themselves to an estimated $576 million in unemployment funds last spring.

But, according to State Auditor Pat McCarthy in an Oct. 20 letter, the agency has made it difficult for state auditors to fulfill their constitutional role to investigate proper use of taxpayer money. Disappointingly, officials had interfered to the point of withholding documents for months and limiting access to personnel without internal minders.

ESD officials say they have been doing their best to assist outside auditors while managing heavy caseloads and responding to multiple audits. But the now-familiar excuse of overwhelm has grown tiresome. If ESD Commissioner Suzi LeVine can’t get a handle on her department’s responsibilities, the governor should appoint someone who can. LeVine did not make herself available for an interview this week.

The State Auditor’s Office is conducting five separate audits of the unemployment agency in the wake of this spring’s massive fraud. But in the letter to LeVine, McCarthy wrote that the department was imposing “significant constraints” that interfered with auditors’ inquiries, as Seattle Times reporters Paul Roberts and Jim Brunner reported Sunday. Those constraints included delaying access to relevant documents and refusing to let auditors interview some key employees outside the presence of ESD’s internal auditors without showing a “business need” for the private interviews.

McCarthy wrote that unless the department started being more cooperative, she would report that “management interference” prevented her office from conducting a thorough audit — a rare and damning conclusion.

The differences have been ironed, and audits are progressing, spokeswomen for the State Auditor and Office of the Governor told the editorial board Wednesday.

But compliance never should have been an issue. From the start, the ESD should have embraced accountability and full transparency by throwing open the doors to auditors. Instead, the department drafted a four-page list of audit protocols that sought to dictate the terms of auditors’ inquiries. McCarthy was right to push back against these terms.

ESD officials say the protocols were developed with input from the state auditor’s staff. They say they were intended to make sure the agency understood auditors’ needs and ensure action items were completed, while helping the department keep track of external audit deadlines and requests. That may be true, but the department is in no position to try to exert control over external, independent audits. For an agency that has struggled for months to perform under admittedly difficult circumstances, the move seems overly bureaucratic, at best.

There is no justification for the beleaguered employment department’s lack of transparency. A thorough, and independent, accounting of what happened is necessary to protect against future theft and restore the public’s trust.