The new interim director of the state unemployment benefits agency revealed to Gov. Mark Sanford on Thursday that the past mismanagement goes further than originally uncovered.
After a month on the job, John Finan, a retired Air Force brigadier general, said the old management at the state Department of Employment and Workforce showed poor work ethics, failed to advertise open positions and filled jobs based on nepotism and favoritism.
The agency, formerly known as the Employment Security Commission, had been run by three commissioners — who each earned more than a $100,000 salary — and an executive director, who made $134,000 a year. The Legislature kicked out the old management and overhauled the agency after its performance during the recession came under fire.
Finan said that the commissioners cost the state — all told — about $700,000 a year and that they would each only work two or three times a week, sometimes not working at all for weeks on end.
What’s more, Finan told the governor during his Cabinet meeting, “The agency is loaded with people that we got as personnel gifts through acquaintances rather than hiring through merit.”
Finan also said that 99 percent of the last roughly 100 people hired at the agency were put in the positions without putting out any notice to the public that the positions were available.
Additionally, the state faces possible significant fines from the IRS for the late payment of taxes last year. Finan said that fine is being negotiated with the federal government. Finan, earlier this week, said he wouldn’t speculate on what the fines might be.
Sanford commended Finan for his work so far. “The general has jumped in with both feet, and I think he’s done a good job over there,” Sanford said.
The agency was put in the governor’s Cabinet as part of the legislative fixes passed this year. Those fixes also include requiring the agency to again investigate fraud, deny people fired for gross misconduct from collecting benefits and do more to help people who were laid off find new jobs. The state also set up a new system for businesses to pay unemployment taxes.
The state has been borrowing money from the federal government since late 2008 to pay benefits.
Finan said his team has some new ideas to improve the agency. One plan is to save on the $5 million annual cost of issuing unemployment checks by providing debt cards in place of the paper mailings, he said. That plan is being tested now.