LANSING, Mich. (Michigan News Source) – Several Michigan legislators are calling for reform of the Unemployment Insurance Agency (UIA) after the state’s Auditor General found that it had likely given more than $245 million to unqualified candidates. 

What did the audit find?

The audit found that between January 2020 and October 2022, the UIA failed to identify a large share of imposter claims totaling more than $245 million in potentially improper payments to individuals. 

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Findings also called into question the work of the UIA’s Investigations Division’s (ID) diligence. Auditors found that of the claims reviewed, ID failed to: attempt to identify 70.0% of the individuals filing unemployment compensation (UC) claims using others’ identities (imposters); attempt to recover 96.7% of related payments or assess fraud penalties; refer 90.0% of the fraudulent claims to law enforcement. 

Another finding was that the “BPC [Benefit Payment Control] did not always follow up with the nonresponsive employers and claimants it identified in new hire crossmatches,” the audit said. “Also, it sometimes discarded or closed issues without conducting required investigation or fact finding to determine the appropriateness of payments to claimants who appeared to be ineligible.” 

Is there time to remedy this?

According to the auditor general, there is still time to remedy the situation as the “three-year window for UIA to address fraudulent payments excludes cases of suspected identity theft, and therefore, UIA could still take action on these claims.” 

For a full copy of the auditor’s report, see here. 

Some are calling for reforms of the UIA.

State Representative Ann Bollin (R-Brighton Township) renewed her calls for reform of the agency. 

“The audit findings underscore a distressing reality: a broken system plagued by persistent problems,” she said in a statement. “The Unemployment Insurance Agency left people with genuine claims waiting for weeks during the pandemic. It went after struggling families for repayment after the agency made a mistake. Now we are learning that the agency hasn’t bothered to pursue clear instances of fraud – where bad actors apply for benefits using the names of dead people. It’s past time to confront these flaws and institute meaningful reforms.”

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She also called attention to the bipartisan need to address the lack of transparency of the situation. 

“The failures at the unemployment agency clearly require attention,” Bollin said. “We must work together to implement reforms that root out fraud, instill transparency, and elevate the level of service for the workers and the job providers who invest in this system.” 

What about people who need the funds?

State Representative Jerry Neyer (R-Shepherd) took issue with the reality that many people who should have received the funds will not in a timely manner. 

“Unfortunately, the people who paid most dearly for these failures were those who needed benefits but were not able to receive them in a timely fashion, as well as job providers who were expected to pay into this system only to see that money be wasted away on fraudulent claims,” he said in a statement. 

“These failures are unacceptable and a clear example of government waste,” he added. “We need real reforms so that people aren’t let down again.”