A look at that Auditor General’s report
Monday, Jul 31, 2023 - Posted by Rich Miller
* Unsurprisingly, Hannah Meisel has the best story out there on last week’s Auditor General’s report on unemployment and PUA overpayments. A tiny excerpt…
While overpayments in “regular” unemployment insurance accounted for a little over $2 billion, overpayments in the PUA program amounted to $3.2 billion, according to the audit.
“Considering gross benefits associated with regular UI claims were 2.5 times higher than gross benefits associated with PUA claims, it shows the magnitude of fraud experienced in the PUA program,” the audit said.
Identity theft accounted for nearly $511 million – roughly a quarter – of the $2 billion in overpayments within Illinois’ regular unemployment benefits system. In contrast, identity theft accounted for the majority of overpayments in the PUA system; $2.3 billion in PUA benefits were paid out in this manner.
The remainder of overpayments are due to what the audit narrowly defines as “fraud” – overpayments resulting from unemployment recipients filing knowingly false information – and “non-fraud,” which is the result of genuine mistakes. IDES has taken steps to stop or claw back these sorts of overpayments, though there are hardship waivers available.
But recovery of that money is only possible because those overpayments were sent to the true claimants of unemployment insurance, the audit notes. Illinois is out of luck on the $2.8 billion in overpayments IDES paid out to those using stolen identities.
PUA was 100 percent federally funded. The state is not on the hook for that.
* The UI fraud, however, represented over half of the state’s overall debt to the trust fund. From March of last year…
Illinois lawmakers this week advanced a measure to allocate $2.7 billion in federal American Rescue Plan Act funds to pay down more than half of the state’s outstanding $4.5 billion Unemployment Insurance Trust Fund debt. […]
Rep. Jay Hoffman, a Swansea Democrat who is a lead House negotiator on unemployment issues, said discussions continue with business and labor interests on addressing the remaining $1.8 billion. But at least $2.5 billion was needed to keep those negotiations moving forward.
“This is an agreed bill process. Business and labor have to agree or we’re not going to move the bill,” he said of ongoing negotiations to pay down the $1.8 billion. “This was a budgetary measure in order to make it easier on the agreed bill process.”
* From November of 2022…
Lawmakers on Tuesday announced a bipartisan plan to use state revenues to pay down the remaining $1.4 billion in debt taken on by the state’s Unemployment Insurance Trust Fund amid the COVID-19 pandemic.
Part of the agreement is expected to move through the General Assembly this week before lawmakers adjourn for the year. It would increase an employee’s “taxable wage base” – which is the amount of an employee’s wages for which an employer must pay unemployment taxes – by 2.4 percent for each of the next five years. It would also increase the target balance of the fund’s reserves from $1 billion to $1.75 billion.
It does not decrease the number of weeks or maximum amounts of benefits an unemployed person can receive. […]
Also as part of the agreement, the $450 million in state revenue to supplement the trust fund balance will be in the form of a no-interest loan. It is to be repaid over 10 years as a deposit in the state’s “rainy day” fund, which has its highest-ever balance over $1 billion.
- Jan's Attic Dweller - Monday, Jul 31, 23 @ 12:41 pm:
The Illinois Democratic Party pays off its debts, keeps the unemployed fed, and prepares for the future. Best Democratic Party in the Country.
- Just Me 2 - Monday, Jul 31, 23 @ 12:43 pm:
There are entire public administration degrees dedicated to whether you should administer a program quickly without a lot of controls, or slowly and with a lot of controls (aka red tape). There are pros and cons to both, but with this situation quickly (with severe punishment) was the best option. Everyone was in crisis.
- OneMan - Monday, Jul 31, 23 @ 12:43 pm:
As a victim of this, I have always wondered how much effort has been put into going after the people who committed the fraud.
When it happened to me and I went to the Aurora PD to report it, the crime had become so common they had a fact sheet and step-by-step guide on dealing with it. While I was waiting to talk to someone at the desk, there were at least two people in front of me who were dealing with the same issue.
- Hannibal Lecter - Monday, Jul 31, 23 @ 1:12 pm:
=== As a victim of this, I have always wondered how much effort has been put into going after the people who committed the fraud. ===
Criminals that commit this type of fraud are extremely sophisticated and tech savvy. It is nearly impossible to track down these people - similar to other types of financial fraud on the government.
To the extent that there are cases that can be investigated and prosecuted, I think the sheer number of fraud cases makes it very difficult to catch everyone. Look at the fraud associated with the PPP loan program. Biggest fraud in history with over $200 billion stolen through the program.
There are just not enough resources to prosecute everyone who committed fraud at that level. Nobody thinks they are going to get caught because almost nobody gets caught.
- OneMan - Monday, Jul 31, 23 @ 1:30 pm:
So are you saying we shouldn’t bother? My question was how much effort was put into it. Not everyone behind this was some criminal mastermind. Same think with PPP, start going after people, it’s a lot of money, demonstrate some effort.
- Hannibal Lecter - Monday, Jul 31, 23 @ 2:02 pm:
=== So are you saying we shouldn’t bother? ===
No I am not saying that. I am saying that even if all of the resources are used to track down and prosecute these criminals, it wouldn’t even scratch the surface of all of the fraudsters committing this type of fraud.
I think that that some efforts are being taken to investigate and curtail this type of fraud, but its really difficult to prosecute the vast majority of fraudsters for several reasons. For example, many of them are located outside of the United States. Also, the sheer number of fraudsters make the impact of any prosecutorial efforts unimpactful. Fraudsters outnumber the number of investigators and prosecutors by a large exponential factor.
- Annonin' - Monday, Jul 31, 23 @ 3:26 pm:
It would be fun to see how many of today’s whiners, AKA Chumpey Chapin, were ranting about delays getting through IDES in April, May and June 2020.
Also most forget the geniuses in DC gave the $$$ to part timers, gig workers and other that had no work record inthe files.
- Thomas Paine - Monday, Jul 31, 23 @ 4:51 pm:
@Just Me 2 -
They did not teach you about door #3?
It’s:
- Better, faster, more expensive
- better, slower, cheaper
- worse, faster, cheaper
But never Better, Faster and Cheaper.
You can always dramatically expand a program while preventing fraud if you are willing to earmark funds for fraud prevention. Sounds like the feds should have earmarked 10-25% for cross checking.