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VIEWPOINT: Failure to Report an Act of Embezzlement at the Department of Labor’s Division of Unemployment Insurance

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The Delaware Coalition for Open Government (DelCOG) – a nonprofit organization that promotes transparency and accountability in government – is filing a request to the Delaware General Assembly to investigate the failure by state officials responsible for reporting the act of embezzlement in excess of $180,000 from the Delaware Department of Labor’s Division of Unemployment Insurance.The Delaware Coalition for Open Government (DelCOG) – a nonprofit organization that promotes transparency and accountability in government.

Failure to Report Embezzlement at the Division of Unemployment Insurance

From news media reporting, it is clear that the act of embezzlement at the Division of Unemployment Insurance occurred in the first quarter of 2023.

Although official reports, published in 2024 by the Office of the Auditor of Accounts and the Department of Finance, included a “Disclaimer of Opinion,” from a third party accounting firm to describe problems about inadequate financial controls, it is especially disconcerting that the reports failed to disclose the embezzlement.

Notwithstanding the Disclaimer of Opinion, not only does failure to disclose the embezzlement of state funds in a timely manner severely damage the public’s perception that our state government is working in the Public Interest, but it also has

  • the appearance of impropriety by state officials.
  • the appearance of possible state-office collusion.
  • the appearance of a possible cover-up.

Violations of the Delaware Code

Specifically, failure to disclose embezzlement – if and when known – in reports to the Governor, General Assembly, and the public by the Office of the Auditor of Accounts is a violation of the Delaware Code.

Similarly, failure to disclose embezzlement  – if and when known – in reports to the General Assembly, the Attorney General, and the Director of the Office of Management and Budget by the Department of Finance’s Division of Accounting is a violation of the Delaware Code.

Withholding the disclosure of embezzled state funds severely damages transparency, accountability, and confidence in our State Government and, in that regard, is a breach of the Public Trust.  Additionally troubling is that the embezzled funds consisted of contributions not only by Delaware employers, but also by the federal government.

Need for Investigation to Defend the Public Interest and the Public Trust

These concerns – possible violations of the Delaware Code, Code of Conduct, Constitution, and the breach of the Public Trust – warrant investigation.

DelCOG urges the Delaware General Assembly to take ownership of the embezzlement problem and investigate the causes, motivations, and political influences – if any – that prevented the act of embezzlement from officially being reported to the Governor, the General Assembly, State Officials, and the public, as mandated by the Delaware Code.

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.

Upon conclusion of the investigation, it is vital that the General Assembly’s findings are disclosed to Delaware’s citizens, including: who knew what; when did they know it; and the reason the embezzlement was not reported.

The Public Trust is at stake.

By John Flaherty, Delaware Coalition for Open Government Board Member

Editor’s note: The House Republican Caucus issued a letter to Speaker Valerie Longhurst on June 5 requesting an “. . .investigative committee to conduct a thorough probe of the Department of Labor.”

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