Late and overpaid: New audits show continued problems with NC unemployment system

RALEIGH, NC — For years, WRAL Investigates tracked problems with North Carolina’s unemployment benefits system.

Now, two new follow-up audits show the same problems still persist inside the Division of Employment Security (DES) when it comes to paying the correct amount of unemployment and paying those first-time benefits on time.

The first audit deals with improper payments. The category includes fraud, overpayments and underpayments.

From 2021-2025, the auditor found the improper payment rate for unemployment benefits in North Carolina was 22%, most of which were overpayments. That’s more than double the national standard of 10% error rate.

According to the North Carolina Office of the State Auditor (OSA), those payment errors cost taxpayers more than $90 million over the expected 10% error rate.

In fact, the improper payment rate got worse compared to an initial audit’s findings back in 2022, when OSA found errors in 18% of payments.

The second follow-up audit out today dealt with timeliness of benefits, meaning when people finally got paid after filing and qualifying for unemployment.

In 2024- 2025, 28% of first-time unemployment checks were not cut within the 14-day federal standard.  While not great, it’s an improvement compared to previous audit findings of 40% late checks in 2022 and 43% of late checks in 2024.

In fact, the auditor’s office noted on-time payments in below the national standard in just 3 of the past 20 years.

The Division of Unemployment Security agreed with the findings and recommendations to improve North Carolina’s unemployment system.