LANSING, Mich. — The Michigan Unemployment Agency (UIA) has been criticized for its handling of unemployment claims during the COVID-19 pandemic in a new performance audit report.
It is the fourth in a series of five audit reports on UIA claims processing during the COVID-19 pandemic, conducted by Michigan’s Office of the Auditor General.
Read the full audit report: Office of the Auditor General performance audit report - claims processing during the covid-19 pandemic
During the period of March 15, 2020, through June 30, 2022, the UIA paid out roughly $39.9 billion in claims, made up of 5.8 million total claims for 3.48 million people.
Friday’s report found that the UIA made billions of dollars in fraudulent overpayments, failed to ensure program integrity, and may have improperly granted overpayment waivers.
The report claims that the UIA was only able to identify about $342,000 of overpayments that were made as the result of people intentionally making false claims about their eligibility.
In addition, the UIA failed to identify and follow up on instances in which claimants received unemployment benefits while also earning wages, and may have improperly waived certain certification requirements for claimants.
In an attempt to speed up payments during the COVID-19 pandemic, the UIA temporarily reassigned its investigations division staff and removed many of its fraud detection and prevention controls.
The report says these actions “greatly reduced its ability to maintain integrity in the unemployment insurance program.”
They also allege the UIA did not properly document claims processing procedures, leading to inconsistent decision-making and a lack of transparency.
The Office of Auditor General believes this contributed to a high number of appealed claims, which the UIA struggled to process in a timely manner.
The UIA was also unable to accurately estimate the number of claimants that were potentially eligible for benefits, leading to inadequate staffing and long wait times for claimants seeking assistance.
Overall, the report concluded that the UIA was not effective in processing unemployment insurance claims in accordance with state and federal requirements during the pandemic.
