An audit discovering more than $105 million in revenue sitting in Georgia Department of Labor accounts has created questions for auditors and agency leadership about the administration of former Commissioner Mark Butler.
Current Labor Commissioner Bruce Thompson said he sent the money, which accumulated for nearly a decade, to the Georgia Department of Treasury last week. Georgia law requires all revenue that agencies generate be sent to the general fund of the state treasury.
At a press conference Thursday, Thompson said ongoing investigations are revealing the department may have purposefully withheld the money under Butler.
“Over a period of the last nine years, the prior commissioner, and at least a few members of his leadership, colluded to intentionally avoid properly disclosing over $105 million to the state and federal government,” he said, based on initial conclusions from the investigation.
A letter by State Auditor Greg Griffin to the commissioner said that since fiscal 2014, the Department of Labor has been withholding some revenue from the administrative assessment, part of the employers tax that funds unemployment insurance.
Then, in fiscal 2016, the department also began withholding some revenue generated from unemployment insurance penalties and interest.
These untransferred funds sat until August 2020 in the Federal Unemployment Insurance Trust Fund, when the then-CFO of the agency had the money moved just before the trust fund became insolvent due to the unprecedented payouts brought on by the COVID-19 economic shutdown. Because of that, the agency avoided using the funds to pay benefits.
The money sat in another account before being moved back to the federal trust fund in 2022, after the COVID-19 unemployment emergency had passed.
The audit report said not transferring the money risked potential loss of interest and increased opportunities for fraud and corruption. It also meant that the department’s required financial reports were incorrectly filed as they failed to disclose the untransferred revenue.
A wide array of state and federal agencies are involved in the investigation.
During his press conference, Thompson said he hopes all involved will be held accountable. When asked directly whether he believed his predecessor Butler committed a crime, he responded “anytime you violate the constitution, it’s a crime. But that is only my opinion.”
In an interview following the press conference, Butler said he knew very little about the funds. While the then-CFO told auditors that they kept the administrative assessment revenue purposefully, out of frustration that the department wasn’t being given enough funding from it. Butler reiterated that he didn’t recall that, despite sharing the same frustration.
Counsel at the agency during Butler’s tenure advised keeping the money, believing the agency had a legal basis to retain it, according to the audit. Butler said he hasn’t been contacted by anyone yet regarding an investigation, which makes him question its seriousness.
“This is nothing but political theater based on a vendetta against me,” Butler said. “(It) amounts to a gross abuse of power to intimidate his (Thompson’s) political enemies.” He said he will comply with any inquiry, though, if contacted.
Thompson did not detail a timeline for an investigation but said the plan is to move rapidly.
“I hope that everyone connected to this investigation will voluntarily and openly cooperate with officials as we seek to restore confidence in this agency,” he said.
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