1) DOL OFFICE OF INSPECTOR GENERAL (OIG) OVERSIGHT OF THE UNEMPLOYMENT INSURANCE PROGRAM (9.22.22)
The OIG has remained committed to meeting the challenges created by the COVID-19 pandemic and to assisting DOL and Congress in improving the efficiency and integrity of the UI program. Strengthening the UI program to prevent fraud before it occurs and to detect it when it does are key objectives to ensure that unemployed workers expeditiously receive much-needed benefits while safeguarding tax dollars directed toward that goal.
The OIG has repeatedly reported significant concerns with DOL and SWAs' ability to deploy program benefits expeditiously and efficiently while ensuring integrity and adequate oversight. We have been and remain particularly concerned about deployment of UI benefits in response to emergencies including natural disasters and economic downturns. Most recently, the OIG reiterated these concerns regarding the economic downturn created by the pandemic and the unprecedented levels of federal funding allocated to the UI program, currently estimated at approximately $872.5 billion. . . .
The volume of UI investigative matters currently under review is unprecedented. Prior to the pandemic, the OIG opened approximately 120 UI investigative matters annually. Since the pandemic started, the OIG has opened more than 190,000 investigative matters concerning UI fraud. That is an increase of more than 1,000 times in the volume of UI work that we are facing. UI investigations now account for approximately 96 percent of the OIG investigative case inventory, compared to approximately 11 percent prior to the pandemic.
In response to the extraordinary increase in oversight demands, the OIG hired additional criminal investigators; increased the caseload of investigators already onboard; deployed federal and contract staff to review DOL and SWAs’ efforts; and strengthened our data analytics program. In addition, we took several other actions to augment our efforts, including the following:
-- initiated the development of a National Unemployment Insurance Fraud Task Force (National UI Fraud Task Force), alongside DOJ;
-- collaborated with DOJ on the strategic assignment of 12 term-appointed assistant United States attorneys assigned solely to prosecute UI fraud;
-- established a multi-disciplinary Pandemic Rapid Response Team within the OIG;
-- appointed a National UI Fraud Coordinator to manage our national investigative response to UI fraud;
-- appointed seven Regional UI Fraud Coordinators to partner with SWAs and federal, state, and local law enforcement on UI fraud matters in their geographic areas of responsibility;
-- leveraged resources from the Council of the Inspectors General on Integrity and Efficiency (CIGIE), Pandemic Response Accountability Committee (PRAC);
-- collaborated with states’ auditors to help develop their audit strategies for the CARES Act UI programs;
-- joined the DOJ COVID-19 Fraud Enforcement Task Force;
-- implemented an extensive outreach and education program targeted to SWAs, the Department, financial institutions and their associations, law enforcement agencies, and the public to inform and raise awareness regarding fraud trends, best practices, red flags, and more; and
-- joined the Department of Justice’s Pandemic Fraud Strike Force teams initiative.
OIG Recommendations to DOL
OIG Access to Claim and Wage Data
-- Implement immediate measures to ensure ongoing OIG access to UI claim data for audit and investigative purposes
-- Expedite regulatory updates to require ongoing disclosures of UI information to the OIG for audits and investigations of federal programs
-- Take immediate action to require the National Association of State Workforce Agencies (NASWA) to refer information to ETA and the OIG on suspected fraud, waste, abuse, mismanagement, or misconduct
Staffing and Systems for Prompt Payments during Emergencies
-- Continue to work with states to develop, operate, and maintain a modular set of technological capabilities (i.e., staffing and replacing IT legacy systems) to modernize the delivery of UI benefits that is sufficient to manage and process sudden spikes in claims volume during emergencies or high unemployment
-- Create a rapid response team consisting of federal and state officials capable of providing technical and other assistance to SWAs impacted by major disasters
-- Conduct a study to assess: the technological needs of the UI programs to determine the capabilities that need to be upgraded or replaced, the features necessary to effectively respond to rapid changes in the volume of claims in times of emergency or high unemployment; the capabilities needed to ensure effective and equitable delivery of benefits; and the capabilities to minimize fraudulent activities
-- Develop standards for providing clear and reasonable timeframes to implement temporary programs to establish expectations for prompt benefit payments to claimants
Controls for Improper Payments
-- Establish effective controls, in collaboration with SWAs, to mitigate fraud and other improper payments to potentially ineligible claimants, including multistate claimants, claimants who used Social Security numbers of deceased persons and federal prisoners, and claimants with suspicious email accounts
-- Include in the UI improper payment estimate: (1) overpayments related to work search formal/ informal warnings; and (2) payments to claimants who provide no or insufficient documentation to support eligibility with respect to work search
-- Incorporate the impact of UI improper payments related to temporary programs, such as those created by the CARES Act, into the traditionally estimated improper payment rate calculations
-- Develop policies and procedures to coordinate with SWAs to obtain the necessary UI program information needed (for DOL financial statements) to support related balances and assumptions, and to perform benchmarking and/or other analyses to validate new assumptions
Guidance and Assistance to States
-- Assist states with claims, overpayment, and fraud reporting to create clear and accurate information, and then use the overpayment and fraud reporting to prioritize and assist states with fraud detection and recovery
-- Examine the effectiveness of the Benefit Accuracy Measurement (BAM) program contact verification process to ensure it reflects the current methods claimants use to seek work
-- Inform states that formal and informal warnings are not permissible under Federal work search law
Coordination with Congress: Work with Congress to establish legislation requiring SWAs to cross-match in high-risk areas, including to individuals with Social Security numbers: filed in multiple states, of deceased persons, of federal prisoners, and with suspicious email accounts
Recommendations to Congress
In addition, Congress should consider legislative proposals included in prior DOL budget requests and pass legislation to improve UI program integrity. The DOL proposals include the following:
-- allow the Secretary of Labor greater authority to require SWAs to implement UI corrective actions related to performance and integrity;
-- require SWAs to cross-match UI claims against the National Directory of New Hires (NDNH);
-- require SWAs to cross-match UI claims with the U.S. Social Security Administration’s prisoner database and other repositories of prisoner information;
-- allow SWAs to retain 5 percent of UI overpayment recoveries for program integrity purposes; and
-- require SWAs to use UI penalty and interest collections solely for UI administration.
These legislative proposals are consistent with previous OIG findings and recommendations to improve the UI program. In addition, the OIG recommended to Congress that it ensure DOL and the OIG have unfettered access to UI claimant data and wage records for our respective oversight responsibilities and authorize OIG participation in asset forfeiture funds to combat UI fraud and other crimes.
2) CRS -- Unemployment Insurance Program Integrity: Recent Developments (11.2.22)