Watchdog: $191B in pandemic unemployment payments possibly 'improper'

Feb. 8 (UPI) -- The U.S. Department of Labor's Office of Inspector General told Congress on Wednesday that "at least $191 billion" in pandemic unemployment insurance payments may have been improper or fraudulent.

The department's Employment and Training Administration is the federal oversight agency responsible for determining improper pay rates for pandemic unemployment insurance programs.

The $191 billion estimate in pandemic unemployment money that may have been improper was reached by applying ETA's improper payment rate of 21.52% to the more than $888 billion in total federal and state unemployment benefits paid during the pandemic period.

Inspector General Larry D. Turner told the U.S. House Ways and Means Committee that "keeping fraud out of the UI program through preventative efforts and controls and quickly rooting it out when it occurs are requisite undertakings to ensure that unemployed workers receive much needed benefits without delay while protecting tax dollars directed towards sustaining the UI system."

Turner said OIG has repeatedly expressed significant concerns about the abilities of the Department of Labor and state's to "deploy program benefits expeditiously and efficiently while ensuring integrity and adequate oversight."

He said his office will continue to work closely with Congress, Department of Labor and law enforcement to keep unemployment benefits available for workers in need.

In a report submitted with his testimony, Turner told the committee "We have been and remain particularly concerned about deployment of UI benefits in response to emergencies including natural disasters and economic downturns. The OIG has reiterated these concerns regarding the economic downturn created by the pandemic and the hundreds of billions of dollars allocated to the UI program."

Turner said even though there was criminal fraud carried out that exploited the pandemic and the enhanced unemployment benefits flowing to workers displaced by COVID-19, "Rapid deployment of CARES Act funding was critical in helping workers in need."

He said initial unemployment claims during the pandemic rose to ten times pre-pandemic levels. The CARES Act, Turner said, provided hundreds of billions of dollars in additional unemployment compensation payments.

"Because many states were not prepared to process the extraordinary volume of new UI claims and struggled to implement the new UI programs, some internal controls that had been traditionally used or recommended for the processing of UI claims were not initially put in place," Turner said in his prepared testimony.

Turner said "keeping fraud out of the UI program through preventative efforts and controls and quickly rooting it out when it occurs are requisite undertakings to ensure that unemployed workers receive much needed benefits without delay while protecting tax dollars directed towards sustaining the UI system."

He said his office will continue working closely with Congress, Department of Labor and law enforcement to "keep these important benefits available for workers in need."