The state lost approximately $11 billion in fraudulent unemployment insurance payments New York State Department of Labor mismanagement, says NYS Comptroller audit Thomas DiNapoli stretching Jan 2020 at March 2022. A press release from the comptroller’s office said auditors could not calculate the exact amount due to the DOL’s refusal to provide data and that amount is likely an underestimate as it was based on the fraud rate. estimated by the DOL for the state unemployment insurance program in state fiscal year 2020-21.
Some of the blame was placed on outdated systems, which the DOL was warned about in 2010 and again during a 2015 audit. The Comptroller’s Office noted that the DOL was unable “to identify the root cause of overpayments and fraud”, to “provide auditors with information to support their management and response to fraudulent claims”, and to provide various information about fraudulent claims, such as how they were identified . , how much were paid before being identified and how long they were paid before being identified.
“The state Department of Labor antiquated unemployment insurance system was ill-equipped to meet the challenges posed by the extraordinary demand caused by the pandemic for unemployment benefits and more lenient federal eligibility requirements, “said DiNapoli. “The agency has resorted to to stop-gap measures to cover up problems, and this has proven costly to the state, businesses, and New Yorkers. The department must recover fraudulent payments and correct its errors.”
According to the comptroller’s office, the state had on average $9.3 billion in loans from the Federal Unemployment Insurance Trust Fund of September 2021 through April 2022who New York employers will have to repay with interest. Upstate United, an organization that describes itself as non-partisan and pro-taxpayer, pointed out that the $11 billion of fraudulent payments exceeds the $7 billion debt the state currently owes the federal government for pandemic unemployment insurance claims.
The audit also revealed data security issues and reported that the DOL took nearly a year after the introduction of the temporary benefits programs to implement. ID.me to stop identity theft, which the DOL has called a major source of fraud.
Upstate United also sent a letter last week calling for legislative hearings, addressed to the heads of the Legislative Investigative Committee, Senator James Skoufis and Member of the Assembly John McDonald. The letter is published online at upstate united.com/ wp-content/ uploads/2022/11/ UU_ UI_ Hearing_ Letter_ Final.pdf.
The auditors provided a series of recommendations with which DOL officials generally agreed. Recommendations included further development and replacement of the unemployment insurance system; balance identity verification with streamlining the process for those in need; follow up on certain “questionable claims” discovered during the audit; compliance with NYS Information Security Policy, Classification, Authentication, Encryption and Logging Standards and ITS Operations Change Management Process and Policy; and faster compliance when receiving a request for state surveillance.
For more information, visit tinyurl.com/DOL-UI-Audit/.
