The Michigan Unemployment Insurance
Agency (UIA) recently received the latest findings from the Office of Auditor
General (OAG) on fraud, technology, financial waivers, and other
well-documented issues stemming from the COVID-19 pandemic. UIA noted that every
pandemic-rooted issue raised by OAG had previously been addressed by the agency
and has either been solved or will be resolved as soon as possible. Major
reform takes time.
“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.”
In response to the OAG’s findings, UIA spotlights reforms and changes that have been made that address questionable audit conclusions:
Finding 1: An aging computer system installed in 2010 has presented tremendous challenges to Michigan businesses, to workers who depend on the UI system, and to the UIA. A system change will be implemented soon that will allow fraud penalties to be applied to federal unemployment assistance programs. The UIA is designing and implementing a brand-new computer system that will significantly ease process changes to address programming issues. The new system will also enhance UIA’s current best practices to allow crossmatches against other state or federal government databases to verify documentation or information supplied to it by claimants or employers.
Finding 2: Selecting five cases to examine in the audit is not a true sample of all the hard work regulation agents perform to build intentional misrepresentation cases. UIA has referred nearly 240 matters to the U.S. Department of Labor’s Office of Inspector General for investigation. The DOL-OIG focuses on large-scale identity theft schemes, often exceeding $250,000. The agency has also standardized procedures with the Michigan Department of the Attorney General and other law enforcement agencies to collaboratively pursue employee and employer fraud. UIA continues to aggressively pursue bad actors who defrauded Michigan workers and businesses. To date, more than $90 million stolen by fraudsters has been recovered. More than 80 limited-term employees work in the Fraud Division to process past and current fraud cases.
Finding 3: UIA has already fully implemented recommendations to this finding, which was raised in an earlier OAG audit. The repeated examination of the ways criminals victimized the Agency and Michigan workers in 2020 during the height of the worldwide pandemic lacks important context. Of note: System changes have been made by UIA to check death and incarceration records. Staff work tirelessly to obtain wage records from employers, who don’t always respond. A Legal and Compliance Bureau led by the agency’s Legal Advisor has been created to leverage collaborative anti-fraud practices to pursue bad actors. Since the pandemic, the number of new fraud cases in Michigan has fallen dramatically. Through a series of reforms, the UIA is successfully identifying new fraud attempts, stopping bad actors in their tracks.
Finding 4: Many of the shortcomings in this finding have been identified in previous reports and audits. UIA has continued to work expeditiously through these matters and has a three-year window to pursue fact-finding on pandemic unemployment assistance (PUA) claims the OAG cites in its audit. Staff did not improperly close matters of new hire separations; they followed established procedures.
In the face of the COVID-19 pandemic, Republican and Democratic leaders urged the UIA to quickly push benefits to the millions of Michiganders whose lives and livelihoods were disrupted by the global economic crisis. At its peak, 77 times more claims were filed with the agency than were filed in an average week before the pandemic, stretching the capacity of UIA personnel as they urgently implemented programs created by Congress to help out-of-work Michiganders. Confusing federal guidelines and a dysfunctional technology system implemented under former Gov. Rick Snyder created many of the claims processes issues cited in the audit.
For additional information on the UIA, visit Michigan.gov/UIA.
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