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First the good news: Only 11 cents of every dollar paid out in unemployment insurance in Colorado is misdirected, improperly paid or outright stolen by one of your neighbors.

That’s actually down from nearly 19 percent a few months ago, based on sample data collected by auditors and the Colorado Department of Labor and Unemployment.

These horrible numbers are not Ellen Golombek’s fault. At least not yet. She has been the department’s executive director for only about a year.

For much of that time, she and her staff have been bailing as fast as they can to get the department above water, even as they continue to process an extraordinary number of unemployment claims.

“Our employees do a tremendous job under some really difficult circumstances,” Golombek said.

That commitment, beginning under a prior administration, might even be part of the reason the “improper payments” problem grew so quickly.

When the Great Recession reached Colorado, it came ferociously. The number of new state claims for unemployment insurance shot from just fewer than 10,000 a month in 2007 to more than 22,000 a month in 2009, falling off only slightly in 2010. In 2011, the number was still high — about 15,000 new claims per month through November.

Worse, many people collecting unemployment are collecting it for a long time. In 2008, state benefits went to 76,572 people. In 2010, that number had ballooned to more than 127,000 as new claims piled on top of long-running claims.

With all those people hurting, the department was trying to get payments to people as quickly as possible, rather than worrying about tracking every penny. It was compassion vs. competence. Compassion won.

The result is that payments are still sometimes made even if recipients failed to adequately document their efforts to find a job. Or, on occasion, a claimant keeps collecting unemployment in that period between being hired in a new job and receiving the first check — and that’s not supposed to happen.

About 4 percent of the bad payments result from intentional theft.

In October, a state audit blistered the unemployment-insurance program, finding the improper payments. There were other problems too, including a failure by the state to “have adequate controls in place to verify that claimants are legally present in the United States.”

Fixing it has fallen to Golombek, former president of the Colorado AFL-CIO union, and Jeff Fitzgerald, brought in from the city of Denver to take over the unemployment-insurance mess.

“It certainly emphasized the problems we were working on,” Golombek said of the audit.

They have met every promise made to the auditors for fixes through December. For example, new unemployment claimants now have to attest that they are in the country legally before they get paid. Not prove, but attest. It’s a start.

The department has redeployed some resources to better track the money, resulting in the reduced number of improper payments — though Golombek cautioned that they haven’t seen enough data to know for certain the problem is fixed permanently. Worth noting: Every state makes some improper payments, an average of 11 percent in 2010 across the country.

Most of the department’s changes are made out of view of the public, and none really makes any difference to folks who spend hours on hold trying to get help over the phone. Two hours is not uncommon.

Fixing those caller wait times is on the agenda for Golombek and Fitzgerald — but it will take time. For now, they wish more people would use the website for their initial filing.

They also plan to join with three other states in hiring an outside contractor to process claims, much as many private businesses use someone else to handle payroll.

That has the potential to let Colorado keep up with claims, even if the current unemployment crisis continues. And Fitzgerald said he does most of his planning with that worst case in mind.

“Our approach is that this is the new normal,” he said.

Chuck Murphy writes Mondays, Wednesdays and Fridays. Reach him at 303-954-1829, cmurphy@denverpost.com or or subscribe at .