Unemployment fraud hit $100-135m during Covid, watchdog says

However, Tuesday’s report cautioned that “the full extent of UI fraud during the pandemic will likely never be known with certainty.”

How it happened: The report attributes the deluge of fraud to vulnerabilities in the state-federal partnership that existed long before the pandemic began in early 2020 and were exacerbated by a series of emergency relief measures approved by Congress that were intended to quickly help people who lost their jobs. during the pandemic.

The problem spanned both the Trump and Biden administrations, the latter of which has taken steps to crack down on fraud and other improper benefit payments.

The American rescue plan allocated $2 billion to help states modernize their UI systems and improve their safeguards, but the deal on the debt ceiling was hammered out this spring between the White House and congressional Republicans. cut that funding in half after some conservatives questioned which areas the administration was targeting for funding.

Chamber of ways and means of the house Jason Smith (R-Mo.) said in a statement Tuesday that he was “extremely alarmed” by the report and that “immediate action is needed to recover maximum taxpayer dollars.”

Earlier this year, the House passed legislation backed by Smith intended to encourage states to recover the wasted funds.

DOL Rollback: The Labor Department criticized the GAO’s methodology, arguing that it resulted in a higher proportion of UI expenditures being classified as fraudulent. Brent Parton, acting head of the DOL’s Employment and Training Administration, cast the findings as “better understood as an estimate of UI fraud risk, rather than a fraud estimate,” in a letter responding to a draft report.

Still, the DOL’s inspector general in February estimated that as much as $191 billion had been distributed incorrectly, through fraud and improper payments.

What follows: Parton said the agency has “committed significant resources and taken concerted action to deter fraud and help law enforcement hold perpetrators accountable while ensuring timely and equitable access to benefits” to address the problem.

In recent weeks, the Justice Department has reiterated that it continues to bring criminal charges for fraud related to Covid and that it has investigated more than $8.5 billion in allegations so far.