State Rep. Ann Bollin called for bipartisan reforms to Michigan’s unemployment agency after reviewing a new audit released by the nonpartisan Office of the Auditor General.
The report further exposes the Michigan Unemployment Insurance Agency’s failure to investigate and address fraud and improper payments during and after the COVID-19 pandemic. It is the OAG’s fifth and final audit of the UIA in response to a 2020 request by legislative leaders.
“The audit findings underscore a distressing reality: a broken system plagued by persistent problems,” said Bollin, R-Brighton Township. “The Unemployment Insurance Agency left people with genuine claims waiting for weeks during the pandemic. It went after struggling families for repayment after the agency made a mistake. Now we are learning that the agency hasn’t bothered to pursue clear instances of fraud – where bad actors apply for benefits using the names of dead people. It’s past time to confront these flaws and institute meaningful reforms.”
Despite the Whitmer administration’s claim to have fixed problems at the troubled agency, the audit shows the UIA improperly paid out benefits to individuals who were deceased, incarcerated, or living in long-term care facilities as recently as 2022 — years after the start of the pandemic.
The audit into the Investigations Division at the Whitmer administration’s UIA found that between January 2020 and October 2022, the agency failed to attempt to identify a large share of imposter claims or to recover many payments and penalties. The report revealed another $245.1 million in potentially improper payments to ineligible individuals, even after the agency found that an individual was dead or in prison. The UIA did not identify or act to evaluate whether the payments were appropriate.
Meanwhile, the state of Michigan is set to pay out $20 million to resolve a class action lawsuit filed by residents who the Unemployment Insurance Agency wrongly accused of fraud. The people were assessed severe penalties and subjected to aggressive collection techniques.
Bollin has been a strong advocate for unemployment system reform. In 2021 and again in 2023, she helped introduce a plan to reform the unemployment agency, increase transparency, prevent fraud, and improve customer service for both unemployed workers seeking benefits and the employers who pay taxes into the unemployment system.
House Bills 4369-4374 have been sitting before the House Ethics and Oversight Committee since April, but the committee has not met in months.
“The failures at the unemployment agency clearly require attention,” Bollin said. “We must work together to implement reforms that root out fraud, instill transparency, and elevate the level of service for the workers and the job providers who invest in this system.”
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