A new study shows that Illinois messed up with payments for people who lost their jobs during the recession.
A new report shows Illinois wasted billions of dollars in jobless tax money during the COVID-19 pandemic. Tens of millions of dollars went to people who were either dead or in jail.
The Illinois auditor general released a report on Wednesday that showed how the state office that gives out jobless benefits made “overpayments” of $5.2 billion from fiscal year 2020 to fiscal year 2022. These “overpayments” were based on false or excessive claims. The study gives the most complete picture of the scams and overpayments that happened on a big scale in Illinois during the pandemic.
The Illinois Department of Employment Security (IDES) overpaid about $2 billion for regular unemployment insurance and $3.2 billion for federal Pandemic Unemployment Assistance (PUA), set up after COVID broke out.
Overall, $2.8 billion has been labeled as identity theft. This money can’t be returned because the person whose name was stolen can’t be found. The report says that only about a tenth of the $5.2 billion has been recovered.
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At the start of the pandemic in 2020, when Gov. J.B. Pritzker told people to stay home to stop the virus spread, unemployment increased in Illinois and the rest of the country. Businesses had to cut back or even close down, which put a lot of Illinoisans out of work and caused an unprecedented number of people to need jobless insurance.
The study says that IDES was not ready to meet the needs caused by the pandemic. “IDES did not have a plan for how to deal with economic downturns and possible spikes in claims.”
In this situation, the state relaxed some safety measures to meet the demand, making theft more likely.
“Several of IDES’s defenses against fraud could not handle the exponential increase in claims,” the audit said. “Beginning in March 2020, IDES will stop doing some standard identifying cross-matches on all usual jobless insurance claims. This is because the cross-matches took a long time and slowed the system. These cross-matches were put on hold briefly or were done offline. This made it easier for IDES to handle the increased number of claims, but it also made it easier for people to cheat the jobless programs.
IDES sent tens of millions of dollars to people who were in jail or had died through average jobless insurance and the PUA scheme. This is perhaps the most shocking thing about IDES. Overall, inspectors found that 92,811 payments totaling $40.5 million were given to 3,448 people in prison, while 10,527 payments totaling $6 million were given to 481 people who had died.
The story said that all the payment numbers could be “understated” because they are just guesses, and inspectors are still trying to figure out what happened to all the bogus payments.
After the report was made public, lawmakers asked Illinois to explain how it handled jobless payments during the pandemic.
“This audit has made it very clear that the administration’s handling of the unemployment system during COVID was an unmitigated disaster of historic proportions,” Illinois Republican state Sen. Chapin Rose said in a statement. “It’s clear that the agency didn’t follow its safety rules, and the report shows it’s still unwilling to follow the feds’ common-sense advice. The agency failed miserably at the one thing it said it was most concerned with, which was getting jobless benefits to people who needed them quickly.
In reaction to the report, IDES said that the Trump administration was partly to blame because it implemented a “poorly designed and brand-new unemployment insurance program” for Illinois to handle, even though federal rules change often.
A spokesperson for IDES told Fox News Digital, “Because the federal program didn’t require the routine and necessary crossmatching identity controls that are part of the state’s regular unemployment insurance system, it’s not surprising that overpayments and fraud recovery efforts across the country would be hurt.” “Federal testimony says over and over again that implementing and speeding up new federal programs will continue to be hard for states, especially because the federal budgeting model can’t change quickly with the economy.”
According to the report, IDES waited too long to use tools offered by the U.S. Labor Department to prevent theft.
“IDES chose not to use the Integrity Data Hub tools [that the Labor Department recommended in May 2020] because other IT projects were seen as more important during the pandemic,” the paper says. “In September 2021, IDES began to use the tools from the Integrity Data Hub.”
Auditors also found that people whose payments were lost or stolen had to wait long to get them back because IDES didn’t have a sound system for dealing with these problems. According to the study, it took the agency an average of 198 days to reissue payments stolen from regular jobless insurance and 445 days to reissue payments stolen from PUA.
“The people of Illinois should be disgusted by how badly their money was handled and how little was done to make up for the outright theft and gross incompetence,” said Rose. “The people who were supposed to be good stewards of their resources failed them completely, and their incompetence made criminals more likely to take advantage of the system and steal benefits and gave them the confidence to do so.”
The auditor general gave IDES several suggestions for how it could run better. One tip was to use what was learned from the pandemic to prepprepareimes when the number of jobless claims increases sharply.
