By BOBBY HARRELL
House Speaker


The Legislative Audit Council's reporting of just how broken the Employment Security Commission has become was quite shocking. When leadership in the House of Representatives began pushing for ESC reform last year, we knew there were great concerns about the commission. However, this report shows an agency in shambles.

The audit exposed a complete lack of accountability, transparency and an all-in-all failure by the commission to accomplish basic goals. These oversights and failures have cost our citizens opportunities and jobs.

We must reform the ESC from a check-writing agency to the job-placement agency our state needs. Reform can't wait another year; our state's unemployed need it now.

This is one of the reasons our state's unemployment rate is far too high: An employment agency in disarray has done little to combat joblessness. With the whole story finally being told, it is easy to see how our Unemployment Trust Fund has been driven deep into debt.

Waste has run rampant, and government resources have been squandered. As revealed by the audit, the ESC watched as the trust fund plummeted from an $835 million surplus in 2000 to a near-$800 million deficit today but failed to alert the General Assembly to this concern. Since July of 2000, that is a loss of $600,000 per day.

Accountability in recent years has been near nonexistent. Two years ago, the ESC stopped prosecuting fraud cases altogether, which has cost taxpayers more than $17 million. Three years of overpayments with no oversight has wasted $25 million. And out of the 42,889 filings for workers fired for cause - drinking on the job, stealing, fighting, etc. - only 281 of those claims were denied taxpayer-funded payments. These "for cause" claims comprised 10 percent of all benefits paid, costing businesses more than $170 million.

Out of all the job openings available in our state, only 40 percent are listed at the ESC. Also, the commission placed no priority on getting individuals currently collecting benefits placed into jobs. Having only a 20 percent goal for finding employment for those collecting benefits, it clearly has misplaced its priorities.

The ESC's central goal - connecting our state's unemployed with job opportunities - has taken a back seat to simply throwing more money at our employment problems. The goal of this agency should be getting citizens off unemployment benefits. Helping people find jobs quickly would cut costs and would provide those individuals with a much better income than what the state provides.

Transparency at the ESC has been very poor to say the least. It is very difficult for the public - or even for the General Assembly - to find out what this government agency is doing with our tax dollars. The LAC audit found transparency issues surfacing as early as 2001.

Despite multiple state laws requiring the ESC to report crucial information - such as its bleak financial situation - to the General Assembly, that information routinely goes unreported.

This failure to notify the Legislature of vital information was highlighted late last year, when thousands of unemployed South Carolinians nearly lost out on millions of dollars in federal aid. Even with persistent urging from the federal government, the ESC neglected to make the General Assembly aware of needed technical changes that would have prevented these benefits from being cut off. As a result, the Legislature had to reconvene in a special session to fix the oversight.

Our state's unemployed need an effective employment agency that works hand-in-hand with our goal of lowering unemployment and putting our citizens back to work.

This will require a complete restructuring of the ESC into a more responsive and accountable Department of Workforce. Making this a Cabinet agency will provide executive oversight and will ensure that this employment agency will work jointly with our Department of Commerce.

I hope this exposure of how severely broken this agency has become will open the eyes of all lawmakers to the need for major reforms at the ESC. Putting our state's unemployed back to work is the first step in recovering from this economic downturn.

Mr. Harrell, a Charleston businessman, is Speaker of the S.C. House.