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Michigan's unemployment agency paid $3.9 billion in improper claims, auditor general finds

Posted at 6:35 PM, Nov 18, 2021
and last updated 2021-11-18 18:35:31-05

LANSING, Mich. — In a bombshell report released on Thursday, Michigan's auditor general found that the state's unemployment insurance agency made $3.9 billion in improper unemployment payments. Most of that money, they report, likely won't be recovered.

"We reached out to the auditor general to do this report," said state Rep. Steve Johnson, a Republican from Wayland and chairman of the Michigan House Oversight Committee. "It's an unbiased, non-political agency that's able to look into things, and what they came up with was a really incompetent and very inept agency when it comes to following the law and making sure that they're guarding the taxpayer dollars wisely."

Michigan's Unemployment Insurance Agency struggled in the first few months of the pandemic to help residents with payments while also coming up with guidelines on just who qualified for assistance.

Director Julia Dale, who has headed the agency for less than a month, said in a statement that this audit took a look at a moment when the agency was dealing with "new and complicated federal programs," facing "hundreds of thousands of claims" and shifting their entire staff to remote work.

In total the agency paid out $39 billion dollars to Michiganders.

"The Unemployment Insurance Agency was tested by a once-in-a-lifetime crisis..we also must use this as an opportunity to evaluate and improve," Dale said in a statement. "That’s why I appreciate the Office of Auditor General’s perspective on improving the Unemployment Insurance Agency’s processes and internal controls."

The 36-page report found the agency "did not have effective internal control to successfully administer the pandemic unemployment assistance program...Based on the limited data analysis we have been able to perform, it appears UIA improperly paid $3.9 billion to claimants now classified as ineligible."

Johnson said this is an issue the oversight committee will have a hearing on.

"We'll have the agency before us, we'll look more into this...This is $4 billion that was federal money that was given to the state, the federal government may very well ask for that money back," Johnson said.

The money went to 347,000 workers and will likely not be returned because "improper payments were UIA's fault and not that of the claimants."

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