Labor needs more unemployment fraud data, IG says
- By Natalie Alms
- Jul 08, 2021
State workforce agencies have been flooded with fraudulent unemployment insurance claims over the past year as the pandemic triggered economic upheaval and widespread job losses. Between March and October of 2020, states paid over $5.4 billion to potentially fraudulent claimants, according to the Department of Labor’s Office of the Inspector General.
To help it detect and investigate large-scale fraud and identify and share fraud trends, the agency’s OIG needs access to state-level data on suspected UI fraud, which it is not currently receiving.
According to a July 1 memo, the platform that tracks suspected fraud is not reporting data to Labor’s Employment and Training Administration or the OIG, the agency’s watchdog said, limiting the department’s ability to oversee benefits programs.
States use a cross-matching tool called the Integrity Data Hub to monitor for fraud. The agency watchdog says that federal regulations require the organization that runs it, the National Association of State Workforce Agencies (NASWA), to report data flagged as suspect to DOL’s Inspector General or the DOL.
“The UI program is exposed to substantial risks, including the cost of UI benefit payments based on fraudulent claims,” the memo states. “Reporting suspected UI fraud to the OIG will assist the OIG to effectively and efficiently detect and investigate large-scale fraud, deconflict investigations with [state workforce agencies], and identify and share fraud trends … in order to strengthen the UI program and help prevent fraud before it occurs.”
The agency said in a response included with the memo that it will modify its agreement with NASWA to require it to share flagged data with the department’s IG.
Although it disputed the watchdog’s claim that regulations require that disclosure, DOL said it “recognizes the OIG seeks additional data given the scope of the current crisis” and would work with the state coalition to facilitate sharing. The states and their national association will need to update their data sharing agreements to do this, the agency said, and states themselves will also have to consent.
This article was first posted to FCW, a sibling site to GCN.
Natalie Alms is a staff writer at FCW covering the federal workforce. She is a recent graduate of Wake Forest University and has written for the Salisbury (N.C.) Post. Connect with Natalie on Twitter at @AlmsNatalie.