Dead People, Prisoners Paid Millions Of Dollars During COVID: Michigan Unemployment Audit

MICHIGAN — Michigan's Unemployment Insurance Agency potentially paid more than $240 million in benefits to dead people, incarcerated people and people too young or too old to receive unemployment benefits, among others, during the COVID-19 pandemic, according to the Michigan Auditor General's report.

Auditors also found officials with the unemployment aid agency failed to spot and check claims made by people using a stolen identity and failed to recover the payments or impose proper penalties in instances of fraud, according to the report.

The audit report said officials with the unemployment aid agency did not attempt to recover 96.7 percent of improper payments or impose proper fraud penalties.

Auditors looked at claims the unemployment aid agency distributed between January 2020 and October 2022.

In response, officials with the unemployment aid agency said most of the issues raised in the audit report have been addressed by the agency and have either been solved or will be resolved as soon as possible, adding major reform takes time.

"We will continue to work cooperatively with the OAG, as we have for the last three years on these issues. We appreciate their partnership in reform," Unemployment Insurance Agency Julia Dale said in a letter. "Since the end of the global pandemic, and under new leadership at UIA, we have built an entirely new bureau and overhauled existing systems to fight fraud and provide better service for Michigan workers and businesses, and data proves that these efforts are paying off."

Dale also noted lawmakers on both sides of the aisle urged the agency to send out benefits to millions of Michiganders thrust into unemployment by the pandemic. The agency was forced to work quickly with an outdated computer system as federal guidelines kept changing, Dale said.

As a result, officials with the unemployment aid agency mistakenly overpaid thousands of Michiganders and fraudsters who exploited the crisis for personal gain, Dale said.

The unemployment aid agency has been working with Deloitte to replace the outdated computer system with a new $78 million system that will make it easier to access data and provide a better ability to swiftly implement changes during any future crisis, Dale said.