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The Michigan Unemployment Insurance Agency might have paid billions more in fraudulent unemployment claims than they estimated.
Deloitte & Touche LLP prepared a report that claims that the agency paid between $8.4 and $8.1 billion in claims that are either fraudulent or incorrect. This report studied the time period between March 1, 2020, and September 30, 2021. Around $43.7 billion was saved, however, from being put into other fraudulent claims.
"When you look at the numbers here, to say that they're troubling is an understatement," said agency Director Julia Dale. "I'm frustrated by those who are out there willing to take advantage of the system."
The report states that most of the money sent to fraudsters was federally funded. According to the Detroit Free Press, 97 percent of the total paid error was funded through programs such as Pandemic Unemployment Assistance and the Federal Pandemic Unemployment Compensation program. The PUA helped to expand freelancing and contractors benefits, while the FPUC added $600 to the weekly benefit amount of participants.
However, the report also highlighted that antifraud efforts newly implemented by the agency helped cut fraud cases by 0.57 percent.
"Operational changes and numerous policy changes have been made, and we're under new leadership," explained Dale. "We do believe that we can really set the standard for a path going forward when it comes to combating fraud."
Dale hopes that new statewide measures will help to further reduce fraudulent claims. These measures include an executive order from Michigan Governor Gretchen Whitmer that establishes an Unemployment Insurance Fraud Response Team within the Department of Labor and Economic Opportunity.
"We know that we have the support, we know that we have clear direction from the governor's office," said Dale, "and that is something that we welcome and are grateful for."
The UIA has paid $39.1 billion dollars to workers across the state since March 2020. In addition, 5.5 million claims have been filed through the agency, with 2.3 million of these claims being UI claims.
The percentage of benefits paid involving likely imposter fraud was 0.46 percent last fiscal year, down from 9.7 percent between March 2020 and October 2020. The portion paid involving likely intentional misrepresentation fraud—apparently legitimate claimants who may apparently fabricate income-verification documents or knowingly fail to report information that would make them ineligible—was 0.11 percent, a drop from 20.1 percent.
The Associated Press contributed to this report.
