United StatesMichigan

Report: UIA alleged stealing sparks investigation; state hires Deloitte to improve systems

Unemployment Insurance Agency Director Steve Gray testifies in front of the Joint Select Committee on the COVID-19 Pandemic on June 24. 

(The Center Square) – The state is investigating whether new Unemployment Insurance Agency (UIA) employees are stealing and charging users to get expedited benefits, WDIV Channel 4 reports.

“Recently hired employees are accused of creating accounts of charging users to help get them their benefits sooner,” the outlet reported.

A Labor and Economic Opportunity spokesperson emailed The Center Square in response to inquiries about the investigation: “Through the Attorney General’s Task Force, the UIA continues to work closely with state and federal partners on a number of investigations to identify unemployment fraud that can be quickly turned over to law enforcement for prosecution.”

Michigan saw more than 2.2 million unemployment claims in the months following the COVID-19 pandemic after Gov. Gretchen Whitmer shut down most of the economy to curb the virus’ spread.

The UIA has processed over 2.1 million claims and paid out $15 billion in benefits over about four months, but thousands more haven’t been paid.

Lawmakers gave $29 million to the UIA to clear the backlog, which employed 2,200 workers to reach that goal.

Four months into the COVID-19 pandemic, the state still saw 24,000 new unemployment claims filed last week. At the same time, thousands more still haven’t received benefits from months ago.

In early July, the state still had about 39,000 unpaid claims that required additional identity verification and about 20,000 unpaid claims pending for non-monetary issues.

An estimated 50,000 fraudulent claims since March 15, part of a national attack to game states’ unemployment systems, complicated payouts as well.

Lawmakers have called for the state to reopen regional UIA offices for in-person appointments similar to Secretary of State’s offices and hair salons.

The UIA told The Center Square that it is “working with the Office of the State Employer to develop a plan on the potential reopening of its field offices,” in an email on June 18.

Executive Director of Michigan Rising Action Tori Sachs called for a transparent investigation.

“The results of the investigation into UIA employee fraud should be transparent and released to the public along with a real plan and timeline to ensure every Michigander who qualifies for unemployment finally receives their payment,” Sachs said in a statement.

The UIA on Thursday also selected Deloitte to help improve the UIA and investigate fraudulent claims.

“As the UIA works to improve its systems to enhance customer service, data transparency, payment systems and fraud prevention, we’re glad to have Deloitte on our team,” UIA Director Steve Gray said in a statement.

“The Deloitte team’s skills and experience help us protect Michiganders and provide unemployment benefits to our working families.”

Deloitte has experience with state unemployment and workforce systems across the country, according to a news release, and will aid in identifying potential cybersecurity vulnerabilities and mitigate risks.

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