Delaware – Nearly three years after a former state employee embezzled funds from Delaware’s unemployment insurance trust fund, court records show the state has recovered less than half of the stolen money. The case continues to raise concerns about financial oversight and whether the system is vulnerable to similar incidents in the future.
The former employee, Michael Brittingham, a state unemployment insurance supervisor, embezzled $181,184 in 2023 by directing checks to a limited liability company he controlled. According to filings in Delaware’s Court of Chancery, the state has recovered only $83,400, roughly 46% of the stolen funds.
Incident Overview
The theft occurred in early 2023 while Brittingham was serving as a supervisor within the unemployment insurance division of the Delaware Department of Labor (DOL). Authorities later determined that he ordered his assistant to issue two checks from the unemployment insurance trust fund to a company he owned.
Shortly after being informed he was under investigation in April 2023, Brittingham died by suicide. The state publicly disclosed the theft in April 2024, nearly a year after his death.
The unemployment insurance trust fund is financed by Delaware employers and provides benefits to jobless workers. As of June 30, 2025, the fund reportedly held a balance of $256.2 million.
Recovery Efforts and Estate Seizures
According to court filings, the Delaware Department of Labor, acting as administrator of Brittingham’s estate, recovered assets including:
- $25,000 down payment on a 2016 Dodge Ram
- $19,000 for a camper
- $39,404 from a bank account
These assets totaled $83,400, leaving nearly $98,000 unrecovered.
The estate case in the Court of Chancery has since been closed.
Audit Findings Raise Ongoing Concerns
For the third consecutive year, accounting firm CliftonLarsonAllen (CLA) issued a “disclaimer of opinion” on Delaware’s Annual Comprehensive Financial Report related to the unemployment insurance trust fund. A disclaimer of opinion means auditors could not verify documentation necessary to confirm account balances.
In December 2024, Delaware Auditor Lydia York released findings that management within the unemployment insurance division failed to properly train and supervise staff in accounting practices.
“These problems created a control environment which was easily overridden and allowed for a theft of funds in early 2023.”
Earlier, forensic accounting firm Belfint Lyons Shuman (BLS) was engaged to investigate whether additional fraudulent activity occurred or whether other employees were involved. Draft findings warned that weak internal controls could “create a roadmap for fraud, waste, and abuse” if not corrected.
The trust fund has faced repeated findings regarding inadequate internal controls dating back to at least 2020.
Officials Respond to Modernization Concerns
Delaware Department of Labor Secretary LaKresha Moultrie, appointed after the theft occurred, has said the agency is working toward making the trust fund fully auditable.
“The first step is making sure that you have auditable records. So our goal is to get to auditable records and then a clean audit. But it’s just a process.”
Moultrie stated the agency initially aimed to modernize systems by January 2027, but recently paused modernization efforts to reduce a backlog of approximately 7,000 unemployment claims.
“We thought it was really important to focus on what we call mission backlog, which was an effort to reduce the 7,000 cases that were in our queue.”
It remains unclear which vendor is assisting with the modernization effort, and officials have declined to provide further details, citing investigative matters.
A Delaware State Police investigation concluded around August 2023, with no additional charges filed.
Background Check Loophole and New Legislation
Brittingham joined the Delaware Department of Labor in February 2019 and later rose through the ranks. However, in September 2019, he pleaded guilty to a felony for stealing more than $42,000 from a homeowners association. Despite this conviction, he was promoted to unemployment insurance administrator supervisor in 2021 while on probation. At the time, employees were required to self-report convictions.
In response to the scandal, Gov. Matt Meyer signed two pieces of legislation in June 2025 expanding background check requirements for Department of Labor and Department of Finance employees. The measures now require background checks for new hires, contractors, and promotions, and allow participation in a system that alerts agencies to new arrests or convictions.
Calls for Greater Transparency
Advocates for government accountability argue that public confidence remains shaken.
John Flaherty, spokesperson for the Delaware Coalition for Open Government, emphasized the importance of restoring trust in one of the state’s largest funds.
“When you think about probably one of the largest funds in the state, next to the transportation trust fund, it’s imperative that we have the trust and confidence that that sum of money is being spent in the public interest.”
He also questioned why more legislative hearings have not been held despite the scale of the issue.
“We all know that there are problems at the Department of Labor… we have to at least identify specifically what the problems are, and then let’s fix those problems as we move forward.”
Why Oversight Matters
Unemployment insurance trust funds are critical safety nets for workers who lose their jobs. Weak internal controls not only threaten taxpayer dollars but can delay benefits for families relying on timely payments.
Financial experts note that repeated audit disclaimers can undermine public confidence and signal systemic accounting weaknesses. Transparent oversight, strong background screening, and modernized digital systems are considered essential safeguards.
Conclusion
While Delaware has recovered nearly half of the $181,184 stolen from its unemployment insurance trust fund, significant concerns remain about financial controls and transparency. With modernization efforts underway and new background check laws enacted, officials say improvements are coming — but critics argue accountability must remain a priority.
What do you think about the state’s response and recovery efforts? Share your experiences in the comments below.
