Group files for investigation for lack of reporting on state embezzlement

The filed request states that the embezzlement in excess of $180,000 from the Delaware Department of Labor’s Division of Unemployment Insurance was wrongly not reported to the state’s citizens. (Photo by the Corporate Finance Institute)

A nonprofit filed a request Wednesday 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 filed the request. That group aims for transparency and accountability in Delaware’s government — it also has pushed for the state to create a position of Inspector General.

The request for investigation states that “it is clear” that the embezzlement happened 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,” the document states.

The coalition claims that withholding the disclosure of embezzled state funds severely damages transparency, accountability and confidence in the state government — which it calls a breach of public trust.

It states the embezzled funds consisted of contributions not only from Delaware employers, but also the federal government.

“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,” the request states.

The group urges the General Assembly to share its findings with Delaware citizens after the investigation is over, specifically who knew what, when they knew of the act and the reason the embezzlement wasn’t reported.

Violations of the Delaware Code, Code of Conduct and Constitution

The following violations, as described in the Delaware Code, Code of Conduct, and Constitution, clearly justify the need for an investigation, according to the coalition:

1.  Filing written reports is a statutory requirement of postaudits by the Office of the Auditor of Accounts to the Governor, General Assembly, and the public, including the disclosure of all illegal and unbusinesslike practices, as mandated in the Delaware Code Title 29, Chapter 29, Auditor of Accounts.

2. Filing written reports is a statutory requirement by the Department of Finance’s Division of Accounting to the General Assembly, the Attorney General, and the Director of the Office of Management and Budget, including the disclosure of irregular, illegal, or improper financial administration or transactions, as mandated in the Delaware Code Title 29, Chapter 83, Department of Finance, Division of Accounting.

3.  Adhering to ethical tenets by state officials to ensure respect and confidence is necessary to maintain the Public Trust, as described in the Delaware Code Title 29, Chapter 58, Code of Conduct.

4.  Adhering to ethical tenets by state officials in carrying out their responsibilities is in the Public Interest, as described in the Delaware Constitution, Article XIV, Oath of Office.