Michigan House Republicans
Reps. Harris, Kunse slam Democrats for whitewashing UIA failures
RELEASE|April 25, 2024
Contact: Mike Harris

State Reps. Mike Harris and Tom Kunse on Thursday rejected efforts by committee Democrats to allow Unemployment Insurance Agency leadership to gloss over billions of dollars in fraudulent payments made during the COVID-19 pandemic. Harris, Kunse, and other lawmakers participated in a joint committee hearing to review one of five damning audit reports that uncovered multiple critical failures.

The December 2023 report by Michigan’s nonpartisan Office of the Auditor General found that between January 2020 and October 2022, the UIA failed to adequately identify a large share of imposter claims, refer fraudulent claims to law enforcement, recover payments, and assess penalties. The audit found that the agency issued $245.1 million to likely ineligible individuals who were dead, in prison, in nursing homes, employed by the UIA, or not of working age.

Prior audits revealed that the UIA paid billions of dollars erroneously because the agency didn’t implement valid federal criteria, failed to conduct criminal background checks on thousands of temporary employees, did not adequately train employees on data security, did not properly investigate fraud, and did not take timely action to stop overpayments.

During the hearing, UIA Director Julia Dale touted her agency’s recovery of $90 million in fraudulent payments as a win. Kunse noted that what Dale described as a win is likely less than 3% of the total amount the UIA doled out to ineligible recipients.

“What Director Dale did today is no different than if a college football coach celebrated their team’s single field goal as a great victory after U of M blew them out 97-3,” said Kunse, R-Clare. “The UIA is a dumpster fire. I can’t speak for Democrat colleagues, but I’ve never seen a dumpster fire put itself out.”

Dale repeatedly pointed to unsourced reviews as an attempt to prove the public’s satisfaction with the UIA. A quick Google search of UIA offices reveals a much different story. Most offices have a 1.4-star review or lower, and a review from less than 8 hours before the hearing described the agency as an “absolute joke.”

“Excuses and cherry-picked Google reviews from the unemployment director don’t make up for the millions of Michiganders who’ve struggled to get the help they need from the agency, and they don’t bring back the billions of dollars stolen by fraudsters,” said Harris, R-Waterford. “Audit after audit has shed light on deep-rooted failures in the unemployment system, which removed safeguards, dropped background checks, mismanaged staffing and software, and doled out massive amounts of fraud. Despite these repeated issues, the people of Michigan keep getting the same song-and-dance routine from those in charge. It’s time for real accountability and real reform. In the Legislature, we must conduct ongoing oversight, hold feet to the fire, and push for the serious changes that are necessary to fix our broken unemployment agency.”

House Democrats tried to undermine the seriousness of the UIA’s failures by justifying billions in fraudulent payments through a lack of staffing and issues with online software. Officials from the OAG said the human programming of the software was more to blame, adding that the UIA stopped using internal controls so they could send payments faster. UIA officials primarily blamed funding shortages for the problems. However, auditors said there is still time for the UIA to claw back some of the fraudulent payments.

“I’d entertain a proposal to allow the UIA to keep a portion of the money they recoup from ineligible recipients to help deal with staffing shortages,” Kunse said. “But that would require them to try and recoup some of the money first, and they’ve apparently given up on that. At this point the agency has lost every inkling of the public’s trust. No sane person would turn around and throw more money at an agency that just lost nearly 10 billion dollars.”

After the hearing, Democrat committee leadership said they would not hold another hearing until there is a clear need, suggesting that the billions of dollars in fraudulent payments are not a clear need for ongoing legislative oversight.

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