Recent audit reports have revealed continuing concerns within the North Carolina unemployment system, directly affecting North & South Carolina residents who rely on its services. According to the latest findings, the Division of Employment Security (DES) faces persistent challenges with payment accuracy and timeliness, as the state’s improper payment rate continues to surpass federal standards.

Improper Payment Rate Significantly Exceeds National Thresholds

Between 2021 and 2025, North Carolina’s unemployment improper payment rate reached 22%, which includes fraud, overpayments, and underpayments. This figure is more than double the national standard for such programs, which is set at 10%. This discrepancy has resulted in taxpayer costs exceeding $90 million more than expected losses during the review period, intensifying public scrutiny across both North & South Carolina.

Comparison With Previous Audit Results

The situation marks a concerning decline from previous years. A 2022 audit had already flagged an 18% error rate in the unemployment system, indicating an ongoing struggle to maintain payment accuracy. The latest audit findings highlight that not only have payment errors continued, but the gap between North Carolina’s performance and federal expectations is widening.

Timeliness of Unemployment Benefits Still Lags National Benchmarks

The second key area of concern focuses on the timeliness of unemployment benefits. Federal guidelines require states to issue first payments to eligible recipients within 14 days. In North Carolina, 28% of first-time unemployment benefit payments in 2024-2025 failed to meet this deadline. Although this represents some improvement compared to 40% and 43% untimely payments in previous years, the state continues to fall short of federal standards, impacting first time recipients and overall public confidence in the system.

Division of Employment Security Response and Recommendations

The Division of Employment Security has concurred with the recent audit findings and has committed to implementing the suggested recommendations. The DES aims to address both payment errors and issues related to payment timeliness. The division has acknowledged the increased pressure on the unemployment system, particularly in the wake of the Covid-19 pandemic, which brought unprecedented demand for unemployment benefits and administrative challenges.

Impact on Local Communities and Taxpayers

The ongoing improper payments, including both overpayments and underpayments, have tangible effects on communities and taxpayers. The rising taxpayer costs, as highlighted by audit findings, place additional pressure on public resources across North & South Carolina. Local job seekers, many of whom rely on timely and accurate payments, have voiced concerns regarding the reliability of the unemployment system. The failure to consistently meet payment deadlines has compelled some regional organizations to offer supplementary support for affected individuals.

Ongoing Efforts and Future Outlook

As North Carolina continues efforts to align its unemployment system with federal standards, state officials stress the importance of improved oversight, stronger verification measures to prevent improper payments, and enhanced processing systems to increase efficiency. Stakeholders across North & South Carolina—including policy advisors, advocacy groups, and the broader workforce—are closely monitoring developments as the Division of Employment Security works toward more effective delivery of unemployment benefits.

The situation underscores the broader importance of robust administrative systems for public benefit programs. State leaders remain hopeful that the ongoing reforms will bolster public trust, minimize errors, and ultimately provide timely, accurate support for individuals navigating the challenges of unemployment in the region.