LANSING, Mich. — The Office of Auditor General (OAG) released its findings after completing its fifth and final audit into the state’s Unemployment Insurance Agency (UIA).
The Michigan Department of Labor and Economic Opportunity (LEO) says the audit focused on the agency’s response to issues related to the COVID-19 pandemic.
The UIA encountered numerous issues, among which included billions of dollars in payouts to claimants who weren't eligible for jobless benefits.
The OAG learned the agency paid $245 million to individuals who were dead, imprisoned or living in long-term care facilities between March 15, 2020 and Dec. 31, 2022. About $2 million of those funds were granted to some claimants even after the UIA determined they were ineligible.
We're told the UIA also under-evaluated fraud penalties by about half and may pursue as much as $840 million in penalties.
Out of the 30 cases reviewed, the OAG says the UIA made no attempt to identify 70% of those suspected of fraud. Additionally, the agency had not tried to recover more than 96% of fraudulent payments.
An estimated $8 billion in fraudulent or mistaken claims were distributed.
To date, LEO says investigations led by the UIA ended with charges filed against 162 fraud suspects, 90 of which resulted in convictions. An excess of $90 million was recovered.
The UIA says they are aware of the issues described and are working toward resolutions.
“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,” says 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.”
The agency still has time to reclaim stolen money from fraudsters, according to the OAG.
LEO tells us the UIA has taken the following actions to address the OAG’s findings:
- The designing and eventual implementation of a new computer system to better facilitate process changes in response to programming errors. The new system is expected to be up and running in 2025.
- Established procedures to coordinate with law enforcement and the Michigan Department of Attorney General when investigating alleged fraud.
- Improved background checks to curb fraud attempts.
- Currently investigating claims for pandemic unemployment assistance (PUA) within a three-year completion window.
READ MORE: UIA thwarts 10K fraudulent insurance claims in 3 days
