MONTPELIER — A single human error, without adequate controls in place to catch it, likely led to the errant mailing of thousands of tax forms to the wrong unemployment insurance claimants earlier this year, according to a report issued Monday by State Auditor of Accounts Douglas Hoffer.
The mistake led to the state Department of Labor recalling thousands of 1099-G forms over concerns that personally identifiable information, including names, addresses and employee identification numbers (such as Social Security numbers), were sent to the wrong Vermont addresses. The state recalled the first batch of forms and sent out new, corrected forms, and offered identify theft protection to persons who were affected by the error.
MONTPELIER — The state, in response to a data breach that led to personally identifying info…
The audit, requested of Hoffer’s office by Gov. Phil Scott, was conducted by CliftonLarsonAllen LLP. The firm has been under contract with Hoffer’s office for the past three years.
A second part of the audit, focusing on how the Department of Labor handles personally identifying information, has yet to begin, Hoffer said, as the department has sought a delay while it deals with a pair of federal Labor Department audits.
In the report, the Department of Labor said it agrees with each of CLA’s five findings.
As a result of multiple federal and state COVID-19 unemployment benefit programs, the Department of Labor faced a larger than usual task in printing tax forms for claimants, as the funds needed to be accounted for in state and federal income taxes. These included the Lost Wages Assistance Program (LWA) and Vermont Short Term Supplemental benefit program. In order to meet the increased demand, the Department of Labor got help from the state department of Building and General Services for printing the forms.
Readers: Information from the state Department of Labor on what to do with an affected Form …
While the auditors could not recreate the mistake, which they traced to an Agency of Digital Services employee, they concluded that “manual data extractions from master records to create Excel files, as well as additional manual procedures to pre-sort the data by zip code and prepare the print file,” were the source of the error.
Furthermore, while the Department of Labor validated the data, “validation procedures ... mirrored those in place for UI program, where VDOL controls the entire process, and did not account for additional manual steps necessary for the new programs.
“Therefore, while validation procedures did occur, they were applied to print files generated from the master record, and they were not applied to the actual data files used in the printing process, after the manual procedures occurred. Hence, the error was not identified prior to print.”
According to the audit, the manual print run included 39,125 LWA recipients and and 34,042 VSTS claimants. But not all of those claimants were affected, as the Department of Labor discovered the error before all the forms were mailed.
Furthermore, according to the audit officials found a workaround to sort the forms for mailing after printing and stuffing.
BENNINGTON — The Vermont Department of Labor is scrambling to repair the damage caused by th…
The audit also evaluated controls put in place after the error, including the generation of “read-only” Excel files to prevent changes anywhere but the master files on the department’s mainframe computer.
Discrepancy logs were created for any errors identified and random checks were instituted to assure quality, the audit found.
Last, the auditors recommended that the Department of Labor retain the recalled and undeliverable statements “to provide for a full accounting of impacted persons.”