Georgia Still Can't Verify $1 Billion in Jobless Payments

Georgia's own Department of Audits and Accounts⧉ has, for the sixth consecutive fiscal year, been unable to sign off on the state's Unemployment Compensation Fund at all.▸ The just-released audit for the year ended June 30, 2025 -- issued February 11, 2026 -- disclaims an opinion on the fund's balances outright: "the State's Department of Labor was unable to provide sufficient appropriate audit evidence to support the balances and financial activity of the unemployment compensation fund." The same audit found that more than $1 billion in pandemic-era unemployment payments⧉ still await eligibility review, years after the federal pandemic unemployment programs themselves expired.

In audit language, a disclaimer of opinion is categorically worse than even an adverse opinion.▸ An adverse opinion means the auditor reviewed the books and concluded they're materially wrong. A disclaimer means the auditor could not review the books well enough to conclude anything -- the state's own accountants simply cannot vouch for what the Unemployment Compensation Fund says it holds, owes, or paid out. Finding 2025-010⧉ traces that failure to a chain of repeat findings stretching back to 2020-008 in the FY2020 audit -- meaning the same core problem has now been cited in the state's own single audit every single year since.

One thing did move in the right direction: the state's separate compliance opinion on the federal Unemployment Insurance program itself -- a distinct rating from the disclaimer on the fund's account balances -- was "adverse,"⧉ the worst available rating, in FY2024, and improved one notch to "qualified"⧉ in FY2025.▸ The disclaimer on the fund's underlying balances, covering FY2024 and FY2025 alike, did not budge.

The mechanics of the failure are almost old-fashioned for an agency that processes hundreds of millions of dollars a year.▸ The audit describes⧉ a Department of Labor that keeps its official books in Microsoft Excel: 12 monthly workbooks, manually combined at year-end into a year-end ledger, then copied into yet another workbook to prepare the state's Annual Comprehensive Financial Report. None of it reconciles automatically to the legacy computer system that actually processes benefit payments -- a system the department's own written response says was built in 1982.

The fund's underlying accounting failure is separate from, but related to, a narrower eligibility-testing finding that shows up every year auditors sample actual benefit payments.▸ In FY2025, auditors tested $18,720 of Unemployment Insurance payments and found $487 worth that shouldn't have gone out -- one claimant who never proved wages or income, another who never certified being available for work. Applying that rate to the full $359,839,058 in payments they sampled⧉, auditors project roughly $6.9 million in likely improper payments statewide. A year earlier, the identical finding -- same eligibility gap, same roughly 60-transaction sample -- produced a projection more than four times as large, $31.7 million, from a comparably sized $378.8 million population. Both projections rest on small, non-statistical samples, so the swing says more about how thin a sample can be than about the fund getting dramatically safer in a single year; what doesn't change is that the same control gap has now been flagged in five straight audits, back to 2021.

The single largest number in the FY2025 audit isn't a projection at all -- it's a plain statement of unfinished work.▸ Pandemic Unemployment Assistance, the federal program that paid gig workers, freelancers, and others who don't normally qualify for regular unemployment, stopped accepting new claims in 2021. Yet the FY2025 audit found⧉ that PUA claims reviews "remained incomplete, with over $1 billion in payments still subject to eligibility review and potential overpayment establishment." Four to five years after the money went out the door, Georgia's Department of Labor has not finished determining how much of that billion dollars went to people who were actually eligible for it.

The department, for its part, has not disputed any of this.▸ It concurred with every finding in the FY2025 audit, and its written response to the eligibility finding points to the same root cause auditors themselves describe: a mainframe system old enough to collect Social Security. "GDOL's current UI Information Technology (IT) system was developed in 1982 using mainframe legacy technology," the department wrote. "Due to its age and structural limitations, many automated processes and corrective controls cannot be easily implemented." The audit notes⧉ a modernization effort is underway, with a target implementation date of September 2026 -- more than six years after the finding first appeared.

Georgia is not the only state whose 2026-cycle audit came back with problems -- a June 2026 review⧉ counted 13 states with some form of audit finding that year, including at least one other state's own unemployment trust fund left unauditable.▸ But among those 13, only Georgia and Delaware drew the single most severe rating available -- a full disclaimer of opinion, the same category the Unemployment Compensation Fund has drawn from Georgia's own auditors every year since fiscal year 2020, according to the finding chain in the state's own FY2025 audit⧉.