State Audit Finds Billion Dollar Accounting Errors In Colorado Unemployment Program

By Marianne Goodland | Colorado Politics

Colorado’s state auditors found serious issues with the accounting practices of the unemployment insurance division of the Department of Labor and Employment, concluding the agency underestimated and overestimated figures to the tune of billions of dollars.

The auditors labeled the problems with its most serious concern — a “material weakness,” an indication of a significant flaw in financial reporting. That could create the possibility of a “material misstatement in the financial statements — one that auditors, regulators, and management can’t overlook.”

The auditors found errors that required accounting adjustments, such as an overestimate in payments owed to claimants to the tune of $1.5 billion, when it should have been only around $86 million.

The agency underestimated bad debt expenses by almost $800 million, understated its revenue by $1.6 billion, understated its expenses by $2.5 billion, and overstated deferred revenue by $75.5 million, the auditors found.

The bottom line, according to the audit, is that the net impact of the over- and understated areas amounted to $781.2 million.

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