LANSING, Mich. — A statewide audit found the Unemployment Insurance Agency paid hundreds of millions of dollars to potentially ineligible people. This includes people who are incarcerated, in long-term care, or even dead.
The audit, released Wednesday, says that the agency made $245.1 million in improper payments to these individuals between January 2020 and October 2022.
It also found that the office continued to pay these people $1.7 million, even after determining they were ineligible.
This is the fifth and final report the Office of the Michigan Auditor General has released investigating the UIA's work over the pandemic.
In addition, it also found issues with the agency's internal data system, which caused it to undercalculate fraud by nearly 50%.
However, of the 30 cases looked at, the auditor says the agency didn't:
- Attempt to identify 70% of fraudsters' identities
- Attempt to recover nearly 97% of related payments or assess fraud penalties
- Refer 90% of claims to law enforcement
The UIA did respond to the report today with a press release, outlining their plan to improve these results.
“We will continue to work cooperatively with the OAG, as we have for the last three years on these issues. We appreciate their partnership in reform,” said UIA Director Julia Dale. “Since the end of the global pandemic, and under new leadership at UIA, we have built an entirely new bureau and overhauled existing systems to fight fraud and provide better service for Michigan workers and businesses, and data proves that these efforts are paying off.”
They added that an agency-led investigation led to 162 charges against fraudsters. 90 of those resulted in convictions. This recovered $90 million. The audit says the agency still has $840 million more in penalties they could pursue.
To help them investigate more fraudsters, the U.S. Department of Labor is paying for more staff to help review cases. This money will come from the American Rescue Plan Act (ARPA) Integrity Grant. It will pay for 30 new limited term unemployment insurance examiners and regulation agents in the UIA’s Fraud and Investigations Division.
UIA reemphasized their renewed commitment to fighting fraud with highlighting new tools and resources for workers and employers. This includes:
- The new UIA Claimant Roadmap. New First-time Filer Coaching Sessions provide online, web-based guidance to completing an application and qualifying for payments.
- The UIA Community Connect program. This provides hands-on expertise from staff in 10 regions across the state on navigating the unemployment insurance application process.
- Six new advocates added to the UIA’s Advocacy Program, a way to get free legal advice for UIA determination appeals.
- Modernization Workgroup to advise the agency on how it can better serve Michigan’s workers and employers.
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