RALEIGH, N.C. (NCN News) – A new report from the State Auditor takes a critical look at delays in payments and fraud in state unemployment benefits.
The pair of new audits report 15 years of late first round unemployment benefits being distributed, and more than $47 million in unemployment benefit overpayments.
Unemployment benefits are managed by the North Carolina Department of Commerce’s Division of Employment Security (DES). The Department of Commerce falls under the Office of the Governor. OSA conducted two follow-up audits on DES, both focusing on unemployment benefits.
One audit found that, during the period of July 1, 2024, through November 30, 2025, DES did not issue 28% of first unemployment benefit payments in a timely manner, resulting in late payments totaling approximately $12.2 million. Specifically, 31,366 of 111,413 first unemployment benefit payments were not made within the federally required 14-day standard.
While the 28% untimely rate is an improvement from our 2024 audit, which found DES did not issue 43% of first unemployment benefit payments in a timely manner, DES has not met the federal timeliness standard for first unemployment benefit payments since 2011. North Carolina has consistently ranked among the most untimely states, averaging 41st overall since 2005.
“Losing a job can be a traumatic event that hurts entire families. Employers pay into our unemployment benefits safety net, and yet for 15 years benefits haven’t gone out the door when they should,” said State Auditor Dave Boliek in a press release announcing the audits. “People who lose a job still have mortgages to pay and bills to finance. As the follow-up audit from the professional team at the State Auditor’s Office shows, slight improvements have been made, but it’s not fair for the government to continually shrug its shoulders at such a longstanding problem.”
The other audit found the rate of improper unemployment benefits made in North Carolina has increased. Improper unemployment benefit payments are any payments that should not have been made or are made in an incorrect amount.
In a response, State Commerce Secretary Lee Lilley wrote that the department agrees with a series of recommendations from the auditors office to improve service, while noting that DES “also recognizes that successful process improvements require adequate funding, staffing capacity, and technology investments to ensure long-term effectiveness and operational stability.”