A seven-person unit in the state's Department of Workforce Solutions faces the annual task of trying to sort through how much the department might have overpaid in unemployment benefits.

This year's task is large. The department potentially overpaid claimants by more than $97 million in 2009, according to U.S. Department of Labor figures, although a state labor department spokeswoman said a more accurate figure is $22 million.

The state labor agency says it routinely looks for those who cheat the system, performing such tasks as matching the Social Security numbers of new hires with those of people collecting benefits, spokeswoman Carrie Moritomo said. The state recently received a $1.2 million grant to help automate the system that sends notices to potential violators.

In a year when money is tight, lawmakers want to know how the state plans to recoup any overpayments.

State Rep. Lucky Varela, D-Santa Fe, said this week he wasn't aware of the overpayments but plans to bring the topic up with department leaders who are scheduled to testify late this month before the Legislative Finance Committee, which he chairs.

"We can use every penny we can get," he said.

The money in question is part of more than $7.1 billion in potential overpayments made in 2009 nationwide, according to the U.S. Department of Labor.

Payments can be categorized as potential overpayments for several reasons, Moritomo said. One example would be if an employer successfully fought someone's right to claim benefits. Fraud is another reason.

The state in 2009 paid $340 million in benefits for those who were without work. Of that, the rate of fraud was nearly 5 percent, amounting to almost $17 million, according to the federal labor department.

In 2008, the state paid out $159 million, and the fraud rate was slightly more than 4 percent, or $6.4 million.

Moritomo said the state is working to recover the millions of dollars and takes any wrong payment seriously.

She said the $22 million in overpayments the state is working to collect, known as the operational rate, is within the department's acceptable rate as determined by the federal government.

Those who knowingly defraud the system face criminal prosecution and must reimburse any wrongfully gained funds. While the department hands over fraud cases to law enforcement, it can use civil means to collect penalties and interest.

It wasn't immediately clear how many people have faced prosecution for benefits-related crimes or how much the state has been able to re-collect in past years.

Because each state's laws are different, the federal labor department warns against comparing state figures.

Still, New Mexico in 2009 was third highest in overpayments and sixth highest in fraud percentages, federal figures show.

The news comes as the state labor department is busier than ever.

Unemployment in June was 8.2 percent — a figure one advocacy group says will only decrease slightly through 2015.

New Mexico Voices for Children research director Gerry Bradley said the unemployment rate could still be 6.3 percent in five years.

The group said New Mexico was among the hardest hit in June, ranking 49th in the nation for jobs lost.

In addition, the group said, the state lost more than 50,000 jobs between the 2008 and 2010 fiscal years, representing 6 percent of the state's employment.

The news also comes at the same time federal funds to the state are declining.

"In short, federal spending kept the state from a complete nose-dive," Bradley said. "But much of that assistance is going away. New Mexico's economy will not recover until the national economy is on the mend."

Contact Kate Nash at 986-3036 or knash@sfnewmexican.com. Read her blog at www.greenchilechatter.com.