Auditor of Accounts Lydia York

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By Joseph Edelen

DOVER — The Delaware Coalition for Open Government and Senate Republican Caucus are urging the General Assembly to investigate how a former Department of Labor employee was able to allegedly embezzle more than $180,000 from the state’s unemployment trust fund and why notice of the offense was not immediately provided to the legislature and members of the public.

After first being publicized by WHYY News May 6, the open government group sent a letter to state lawmakers Thursday to call for action, which was underscored by Senate Republicans Friday.

In the letter, the six-member Republican caucus said they recently met with the Department of Labor’s and Division of Unemployment’s administrative team regarding the issue. They noted that outside consultants have also been brought in “to analyze the deficiencies in the agency’s systems that led to this happening.”

“While we appreciate the Department’s openness and willingness to meet, we believe, as elected leaders, that we must perform a separate inquiry to both rectify the issue and reestablish trust between the Department and the public we serve,” the Senate Republican caucus wrote.

So far, Democratic legislators in the House of Representatives and Senate have declined to comment publicly on whether they intend to conduct oversight hearings during the final three weeks of the legislative session, which concludes June 30.

Officials familiar with the matter say legislative leaders are working behind the scenes to convince the Carney Administration to be more forthcoming about both the alleged theft and enhanced security measures that have been put in place to better protect the Delaware Department of Labor’s Division of Unemployment Insurance program going forward.

Whether the Carney Administration is willing to provide those details to the public will likely determine whether the General Assembly undertakes oversight hearings of its own, sources said.

The House Republican caucus has also not expressed an opinion on the matter at this time, as spokesperson Joe Fulgham noted this was to allow for members to discuss the issue as a collective.

“We believe that the public has the right to know, it’s in the ‘right to know’ law in the preamble; that citizens… have a right to observe and monitor the actions of our public officials,” said John Flaherty, Delaware Coalition for Open Government board member and spokesperson.

“In this case here, they fell far short of their legal requirements. So, it was very disappointing that a fund that has over $300 million, when a violation of that fund came up, it was not treated the way it should have been, with openness and transparency.”

Background

The state did not publicly acknowledge the alleged theft until being contacted by WHYY News, according to the media organization’s May 6 story.

The Department of Labor then confirmed that former unemployment insurance administrator Michael Brittingham alle

gedly stole more than $181,000 from the fund last year, WHYY reported. Shortly after being told that he was under investigation, Mr. Brittingham, 37, took his own life in April 2023.

The story and ensuing fallout came nearly two months after State Auditor Lydia York released a special report detailing financial discrepancies within the Delaware Unemployment Compensation Fund.

The compensation fund – which is managed by the Department of Labor’s Division of Unemployment Insurance, and in 2023, reported about $390 million in assets from the federal government and Delaware businesses – was found to be “unauditable” after an independent analysis from CliftonLarsonAllen LLP.

The firm determined the Division of Unemployment Insurance was “unable to provide detailed accounting records of any kind to allow CLA to reach an opinion,” according to Ms. York’s special report.

“(Division) management failed to ensure accounting work was performed in a timely manner. State agencies, like Division of Accounting, were slow to respond when the scope of the problems within (Division of Unemployment Insurance) became clear,” said Ms. York in the special report.

The state auditor of accounts went on to say that the discrepancies represent an “unacceptable lack of adherence to the state’s established accounting policies,” but also demonstrate an “absence of accountability in a program that Delaware employers fund, and Delawareans rely on.”

Coalition for Open Government

In the government transparency group’s letter, they outline several potential violations of state law, public officials’ code of conduct and the Delaware Constitution.

This includes requirements for the Division of Accounting and the Auditor of Accounts to submit reports to the governor, General Assembly and public regarding such improprieties — though Delaware law does not set forth the timeliness of these reports – and ethical standards for public officials within the state employee code of conduct and state constitution.

“Immediate investigation is in the public interest to restore public trust in our state government. Any equivocation or inaction would further degrade transparency, accountability, and public confidence,” the letter reads. “The public trust is at stake.”

Mr. Flaherty, who serves on the board of directors for the Delaware Coalition for Open Government, told the Daily State News that, if the public does not get a sufficient response regarding the mismanagement of unemployment funds, there could be other avenues to pursue.

This includes calling for involvement from the U.S. Department of Labor’s Inspector General Larry Turner, whose office is responsible for detecting and deterring waste, fraud, abuse and mismanagement of taxpayer dollars in state labor agencies throughout the country.

The open government organization has advocated for the establishment of a similar, statewide office in Delaware, which has since been introduced by Sen. Laura Sturgeon, D-Woodbrook.

With three weeks left in the legislative session, its unclear if the proposal will receive enough support to become law, as it remains assigned to the Senate Finance Committee for approval on its anticipated annual price tag of over $1.3 million.

“There’s over $300 million in that fund, and I don’t think this is an isolated instance of one person stealing $180,000, there’s probably others,” Mr. Flaherty said. “It’s been over a year… it’s time for the General Assembly to bring these guys in, find out what happened, and what they’re going to do (going forward.)”

The General Assembly will return from its two-week break for Joint Finance Committee budget markup on June 11.