NW Kentucky News

House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) and Government Operations and the Federal Workforce Subcommittee Chairman Pete Sessions (R-Texas) released a staff report titled “Widespread Failures and Fraud in Pandemic Unemployment Relief Programs.” The report outlines how states, including California, New York, and Pennsylvania, processed pandemic unemployment insurance (UI) claims with minimal oversight. This lack of oversight resulted in billions of taxpayer dollars lost to improper and fraudulent payments that are unlikely to be recovered. The report also includes recommendations to prevent future improper payments and fraud in unemployment insurance programs.

“Democrats and the Biden-Harris Administration spent trillions of dollars under the guise of pandemic relief, and the Oversight Committee’s very first hearing this Congress exposed how this unchecked spending left taxpayer funds, including UI programs, vulnerable to significant waste, fraud, and abuse. While Democrats turned a blind eye to this waste of taxpayer dollars, Republicans were committed to identifying how these taxpayer funds fell prey to fraudsters and criminal organizations. Today’s report includes a list of comprehensive recommendations to ensure future taxpayer-funded UI programs don’t suffer a similar fate. Rooting out waste, fraud, abuse, and mismanagement in the federal government remains a top priority for Oversight Republicans, and we will continue to work to protect all American taxpayers,” said House Committee on Oversight and Accountability Chairman James Comer (R-Ky.).

Key findings from the report include:

- The U.S. Government Accountability Office (GAO) estimates 11 to 15 percent of total benefits paid during the pandemic were fraudulent, totaling between $100 billion to $135 billion. The Department of Labor (DOL) Office of Inspector General (OIG) estimates that at least $191 billion in pandemic UI payments could have been improperly paid, with a significant portion attributable to fraud. As of March 2023, states reported recoveries of improper payments amounting only to $6.8 billion.

- Pandemic UI benefits led to 69 percent of unemployed workers being eligible for benefits exceeding 100 percent of their wages and non-wage compensation without needing evidence that they were actively seeking work.

- The design of the Pandemic Unemployment Assistance (PUA) program led to massive fraud due to claimants not having to provide any evidence of earnings or prior work during its first nine months. DOL reported that the PUA program had an improper payment rate of 35.9 percent.

- Outdated IT systems, staffing shortages, and new programs prevented many states from deploying anti-fraud measures effectively.

- Insiders within state workforce agencies conspired with organized crime factions leading states doing little to stop them.

Despite evidence from OIG and GAO indicating higher rates of fraud in PUA compared with other UI programs or regular UI benefits, plans have been proposed by Congressional Democrats for expanding UI by increasing benefits.

Recommendations from the report include:

- Requiring proof of prior work before reviewing eligibility for future temporary UI benefits programs.

- Mandating state workforce agencies cross-check claimant PII against available databases before approving benefits.

- Prioritizing modernization of IT systems by state workforce agencies.

- Preventing individuals convicted of identity theft or related crimes from processing government benefits.

- Extending the statute limitations for pandemic-related UI fraud beyond March 2025.

The full report is available online.