Delaware recovers less than half of taxpayer funds stolen by state employee in 2023

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Court records show the state of Delaware was able to recover just a portion of the money a former state employee embezzled from the unemployment insurance trust fund in 2023. Questions continue to linger nearly three years later about whether it could happen again.

The state only publicly revealed the theft by Michael Brittingham, who was a state UI supervisor, in April 2024 after being contacted by WHYY News, following a tip. Brittingham embezzled $181,184 in 2023 by ordering his assistant to issue two checks to a limited liability corporation controlled by him. He took his own life in April 2023 shortly after being told he was under investigation.

According to Delaware Court of Chancery filings, the state was able to recover $83,400 of the money from his estate, about 46% of the amount stolen.

Delaware Department of Labor Secretary LaKresha Moultrie, who inherited the ongoing trust fund problems when she was appointed secretary last year, has been touting progress in modernizing outdated systems. But the trust fund remains unauditable and DOL appears tight-lipped about the problems that still remain.

Auditing firm finds Delaware’s UI fund remains vulnerable to more thefts

Delaware employers pay into the fund, which doles out jobless benefits. The businesses have tax accounts with DOL and they pay based on the wages of their employees. As of June 30, 2025, the fund currently has a balance of $256.2 million.

But for the third straight year, accounting firm CliftonLarsonAllen has issued what’s called a “disclaimer of opinions,” meaning it couldn’t rely on the state’s documentation to confirm bank statements of how much money is actually in the reserve. CLA does an annual audit of Delaware’s Annual Comprehensive Financial Report, which represents the state’s overall fiscal health.

A few months after the theft, DOL engaged accounting firm Belfint Lyons Shuman at a cost of $1.27 million to perform forensic accounting. Its charge was to determine if Brittingham had conducted any other fraudulent transactions and to see if any other state employees were implicated.

The most recent update to the public on how the embezzlement happened appears to be a December 2024 report by Delaware Auditor Lydia York that determined the division’s management failed to train and oversee staff in basic accounting duties and recording data in relevant systems.

“These problems created a control environment which was easily overridden and allowed for a theft of funds in early 2023,” the report said.

York’s December update included findings from a draft BLS report sent to DOL and York. The firm warned that if the problems with weak internal controls were not addressed it would “create a roadmap for fraud, waste, and abuse – not only at DOLUI, but potentially in other areas of state government.”

John Flaherty, spokesperson for the Delaware Coalition for Open Government, said the public needs more information about why after three years since the embezzlement, the trust fund continues to lack oversight.

“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, and that the monies are spent wisely,” he said.

The trust fund had been hit with findings over a lack of adequate internal controls since at least 2020.

York highlighted massive problems plaguing the fund in a March 2024 special report blasting its financial management. In it, she called out mounting problems over several years that had failed to be addressed due to factors including a lack of oversight, outdated systems and limited training.

Moultrie said in an interview with WHYY News that the DOL is actively working on fixing the issues, including making the UI trust fund auditable.

“The first step is making sure that you have auditable records,” she said. “So our goal is to get to auditable records and then a clean audit. But it’s just a process. We have to be able to account for records all the way back to fiscal year [20]23.”

She said they have an implementation goal of January 2027 for the modernization project, but recently pivoted so they could slash the state’s backlog of 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,” she said. “So we put our claims modernization on hold for the purposes of mission backlog.”

Moultrie said the agency is working with a vendor to make system improvements, but it’s unclear who the company is. She declined to answer questions related to the embezzlement through a spokesperson, saying there was still an investigation. It’s unclear what investigation she is referring to.

A Delaware State Police investigation into the crime ended around August 2023 with no additional charges. A spokesperson for York said the forensic auditing work ended in late 2024.

The Brittingham’s estate case in the Court of Chancery is also closed. The DOL, acting as administrator of Brittingham’s estate, was able to seize a $25,000 down payment he made on a 2016 Dodge Ram, $19,000 for a camper he purchased and $39,404 from a bank account.

“I’m not sure why this is such a state secret,” Flaherty said. “We all know that there are problems at the Department of Labor, and now with the new administration, maybe we can move forward, but we have to at least identify specifically what the problems are, and then let’s fix those problems as we move forward.”

Laws enacted after theft was revealed

Brittingham joined the state DOL in February 2019 as a field agent, receiving a background check when he was hired. But while moving up the ladder at the agency, he pleaded guilty in September 2019 to a felony for stealing over $42,000 from his homeowners association. Brittingham was made unemployment insurance administrator supervisor in 2021 while serving on probation. DOL officials said employees were required to self-report convictions.

To address that loophole, Gov. Matt Meyer signed two pieces of legislation in June 2025 that expanded the DOL’s and Department of Finance’s ability to conduct background checks on employees and protect sensitive taxpayer information.

One of the measures subjects DOL employees to background checks as new hires, contractors, subcontractors and when they are transferred or promoted. The second bill enabled DOF to participate in the state’s Record of Arrest and Prosecution Background system, which alerts an agency if an employee has a new arrest or criminal conviction.

After WHYY’s exclusive reporting, some Republican lawmakers called for legislative hearings into the matter. But Moultrie was asked just one question on the UI trust fund during her testimony before the Joint Finance Committee. There were no questions about its efforts to recover the missing taxpayer funds.

Flaherty said lawmakers may be moving on, but the public is not.

“The Legislature should make this a higher priority in identifying what are the deficiencies in the fund and what they can do to help the Department of Labor overcome those deficiencies,” he said. “So everyone will have confidence that everything is on the up and up at the Department of Labor.”