One of a taxpayer’s biggest nightmares is when unscrupulous people rip us off because lax government oversight creates loopholes that they can take advantage of. It’s even worse when conspirators work for government.

The latest nightmare is brought to us from the nation’s capital itself. According to a new report from the Department of Labor, city employees collected or aided others in collecting unemployment benefits for which they didn’t qualify. They were able to get away with this because the city neglected to use safeguards that were in place to prevent this kind of fraud.

A few years ago there were allegations that DC staff were falsely creating unemployment insurance (UI) claims and providing benefits to certain individuals to whom they were related.

 They fraudulently charged employers UI taxes for individuals not on their payrolls, and charged costs to UI administrative grants for salary expenses for individuals who weren’t entitled to the benefits. When the Inspector General investigated, it was found that the improper and fraudulent payments wouldn’t have been made had automated controls designed to prevent them been turned on.

Even more, there were former city employees who received UI benefits while employed. They lost their jobs, during which they qualified for benefits, but when they returned to work, they failed to inform the appropriate agency.

The city’s watchdog agency made 136 recommendations to prevent these episodes from reoccurring. If only the city had implemented them.

Washington Times reports:

The DC Department of Employment Services, or DC DOES, cannot show it has done much to ensure city employees stop collecting unemployment insurance payments once they get hired, according to a report issued Tuesday by the Department of Labor’s inspector general.

Yet DC DOES has not implemented the recommendations to prevent fraud by city employees and cannot guarantee they are not double-dipping, according to the DOL IG.

In 2013, DC DOES implemented a process to identify all city employees receiving unemployment benefits. But city officials say they cannot always stop the unemployment checks on time.

Instead, they do subsequent reviews and stop improper payments, then try to recover money that should not have been paid.

DC DOES developed a computer monitoring system that cross-matches city employees with unemployment lists, called a “watch dog report.” As of December 2013, there were 66 city employees collecting unemployment insurance benefits.

Yet the city had no documentation to show it had taken action against any of them.

The IG also found DC DOES could not even prove it was collecting money from employees identified in a 2012 fraud investigation as collecting both paychecks and unemployment.

Unemployment benefits are meant to be temporary help for those who need it. However, when our taxpayer largess is taken advantage of by greedy people, it’s the responsibility of government to go after the wrong-doers and to ensure that the fraud doesn’t reoccur.

Why has the city been slow to implement the recommendations that would safeguard against this kind of fraud? Overlooking or minimizing these issues is irresponsible and drains needed funds for those who truly deserve it.

Perhaps now that the press is putting pressure on the city, D.C. will respond and get its priorities right.