Michigan Senate and House Oversight Committees continue to press Unemployment Insurance Agency over mishandled payments

An investigation by Deloitte shows the UIA paid roughly $8.5 billion to fraudulent actors.
According to a report by Deloitte, the UIA mishandled roughly $8.5 billion in unemployment benefit payments.
Published: Jan. 13, 2022 at 7:38 PM EST
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LANSING, Mich. (WLUC) - Michigan lawmakers are considering how to move forward after an investigation revealed the state Unemployment Insurance Agency distributed billions of dollars in benefits to fraudulent actors.

Now, the bipartisan State Senate and House Oversight Committees are figuring out how to move forward. According to a report by Deloitte, the UIA mishandled roughly $8.5 billion in unemployment benefit payments.

After meeting to discuss this issue for the first time in Nov. 2021, the oversight committees convened Thursday to get the UIA’s side and to determine how to move forward. “How can we be reassured that we’re not going to go down these paths again, or that we’re actually going to make real progress in the future?,” Michigan (R) 38th State District Senator Ed McBroom posed to the Unemployment Insurance Agency.

Deloitte’s investigation which began in Nov. 2021, and was published in Dec. 2021 estimates the UIA paid the $8.5 billion to two types of fraudulent actors. Imposter fraudsters and intentional misrepresenters. “Imposter fraud was estimated to [cost us] $2.7 to $2.8 billion [which was] paid out from March 1, 2020, to Sept. 30, 2020,” Unemployment Insurance Agency Director Julia Dale said.

Imposter fraud refers to people filing claims with a stolen identity, while intentional misrepresentation refers to those who filed claims using their own identity, but misled the UIA about their work history of lost wages. Deloitte estimates the UIA paid between $5.6 and $5.7 billion to intentional misrepresenters.

Both groups took advantage of the CARES (Coronavirus Aid, Relief, and Economic Security) Act, a $2.2 trillion economic stimulus package passed into law by Congress in March 2020 that paid pandemic unemployment benefits to those who qualified.

The UIA believes the unemployment system is lagging behind technologically, and it must be updated to prevent this from happening again. “[We need to] upgrade our technology so that we have a more responsive system that is better equipped to help us the next time there is an unemployment crisis,” Dale said.

The joint oversight committee, however, says the UIA seems unconcerned about the mishandled payments. “$9 billion paid out inaccurately, [and the Unemployment Insurance Agency has] press releases that instead say, ‘We deserve a pat on the back because it could have been worse, and it wasn’t our money anyway,’” Sen. McBroom said.

The joint committee has made no legal decision yet concerning the UIA. Going forward, the bipartisan lawmakers plan to work with their legal counsel to get former UIA Director Steve Grey to testify for his alleged role in the mismanaged payments.

The investigation by Deloitte can be found by clicking this link.

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