Lansing, Mich. (Michigan News Source) – The House Committee on Ethics and Oversight heard testimony from the Unemployment Insurance Agency (UIA) Director on Thursday to ask questions regarding an audit of the agency that showed millions were sent out to unqualified individuals during COVID.

In early January, legislators began calling for reform of the UIA after the Auditor General Report.

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) due 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.

UIA Director Julia Dale shares the agency’s work and addresses concerns.

In a report shared by UIA Director Dale, there was $90 million recovered since the audit and 23 UIA staff that were fired or who resigned since June 2020.

$690 million in total jobless benefits were paid in 2023, and of that amount only 0.000015% was paid to imposters according to a report from Dale. She also reported that in 2023 to 2024 there have been 200-300 weekly fraud cases determinations each week.

Michigan Legislators seek more answers regarding the audit and about the taxpayer money.

Rep. Tom Kunse (R-Clare) pointed out that the $90 million in recovered fraudulent payments only accounts for less than 3% of the total amount of the UIA payments from the audit.

“What Director Dale did today is no different than if a college football coach celebrated their team’s single field goal as a great victory after U of M blew them out 97-3,” said Kunse, R-Clare. “The UIA is a dumpster fire. I can’t speak for Democrat colleagues, but I’ve never seen a dumpster fire put itself out.”

Rep. Mike Harris (R-Waterford) also called attention to the low customer service satisfaction indicated on Google as well as individual office reviews.

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“Excuses and cherry-picked Google reviews from the unemployment director don’t make up for the millions of Michiganders who’ve struggled to get the help they need from the agency, and they don’t bring back the billions of dollars stolen by fraudsters,” said Rep. Harris. “Audit after audit has shed light on deep-rooted failures in the unemployment system, which removed safeguards, dropped background checks, mismanaged staffing and software, and doled out massive amounts of fraud. Despite these repeated issues, the people of Michigan keep getting the same song-and-dance routine from those in charge. It’s time for real accountability and real reform. In the Legislature, we must conduct ongoing oversight, hold feet to the fire, and push for the serious changes that are necessary to fix our broken unemployment agency.”

Auditor General Reveals there is still time to recoup funds and change practices.

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.”

Rep. Kunse shared that he was open to letting the UIA keep a portion of the money that is recuperated to address staffing shortages.

“I’d entertain a proposal to allow the UIA to keep a portion of the money they recoup from ineligible recipients to help deal with staffing shortages,” Rep. Kunse said. “But that would require them to try and recoup some of the money first, and they’ve apparently given up on that. At this point the agency has lost every inkling of the public’s trust. No sane person would turn around and throw more money at an agency that just lost nearly 10 billion dollars.”

The Democrat Committee leadership indicated that it would not be hosting another hearing on the matter.