Waiver good but keep digging
Sometimes it’s what’s not said that catches the attention.
Michigan’s Unemployment Insurance Agency announced last week that more than 55,000 claimants will not have to pay back approximately $431 million in federal pandemic unemployment benefits — overpayment benefits that the agency previously determined to have been improperly awarded.î
Not said: ìpreviously determined to have been improperly awardedî — by the UIA.
Overall, the finger-pointing comes secondary to relief for the 55,000 people left in limbo after losing their job in the pandemic, then getting a coffee-spitter of a shock when the UIA realized its error and made initial overtures at clawing the funds back.
Claimants who’d already paid down their overpayment by $11M will get refunds, reads the announcement.
Fraud claims will not get waviers, it adds, and the agency will continue to “vigorously pursue restitutionî of any stolen benefits.”
While that’s reassuring that we won’t be waiving fraud claims, what’s left unaddressed is how the problems got so far afield.
We have a little insight from an ex-UIA worker who pleaded guilty last month to conspiracy to commit wire fraud. He told investigators he made between $50 and $150 for every false claim he approved, estimating $500,000 to $1.5M in agency losses, according to Click On Detroit reporting.
This dovetails with the March report from the Auditor General that found UIA officials failed to ensure staffing contractors were liable for $3.8 million in fraud committed by their employees.
The UIA didn’t conduct background checks on 5,500 part-time employees hired in response to the pandemic-fueled mountain of claims, and that some had prior misdemeanor and felony convictions, including for armed robbery, embezzlement and identity theft. The report also found that some of these employees still worked at the agency.
Previous inspections found the agency made about $8.5 billion in improper payments.
That’s a lot of mistake money.
Now what’s said sounds good — relief for people who tried to do right by the rules, plus low unemployment numbers to boot.
But we urge the UIA to keep digging into its systems, to root out the troubles that have plagued it for more than a decade. There’s still a lot to say.