Taxpayers shelled out more than $1.6 billion in unemployment insurance benefits to people who were not even looking for work in fiscal year 2016, according to an audit from the Government Accountability Office.
A report from the Washington Free Beacon is shedding light on the billions of dollars wasted by the Department of Labor’s unemployment insurance program on beneficiaries who failed to meet work requirements. In fact, the unemployment program was the seventh-highest among all federal programs for improper payments.
Unemployment insurance is paid to individuals who lose their jobs and carries the understanding that the money is intended to help out while beneficiaries search for another job.
For some states, this active search may impose several requirements in order for beneficiaries to get benefits, but in other states, officials look the other way when people fail to prove that they’ve been looking for work.
The audit was conducted to ascertain whether or not unemployment insurance beneficiaries who did not actively search for work affected the program’s level of improper payments.
“Some states have formal warning policies that allow UI claimants to receive benefits after the first discovered occurrence of their failing to meet work search requirements while other states do not have such policies,” the report states. “As a result, states are inconsistent in whether they report such benefit payments as overpayments, which could have an impact on DOL’s reported improper payment rate.”
The report goes on to reveal that the District of Columbia and 18 states have these types of warnings, but they do not count benefits paid to individuals who did not search for work as over-payments.
“According to Department of Labor’s estimates, over $1.6 billion in benefit payments were made to claimants for weeks for which they were issued formal warnings in fiscal year 2016,” the report states. “DOL’s analysis further shows that if formal warning cases had been included in DOL’s calculation of the overpayment rates for fiscal year 2016, the nationwide overpayment rate would have increased by about 5 percentage points, from an estimated 11.1 percent to an estimated 16.3 percent.”
The Labor Department requires the improper payment rate be less than 10 percent for states. States that can’t comply must submit a corrective action plan to the agency.
According to the audit, the agency can provide guidance to help correct the problem.
“In preparing guidance for states, DOL has an opportunity to determine and communicate how state policies on work search requirements and their related overpayment reporting should align with federal requirements and reporting expectations,” the GAO said. “Providing specific information on any actions required and, if actions are required, setting timeframes for completion and monitoring states’ responses to the guidance could help ensure that DOL achieves its desired results.”
The Employment and Training Administration “is developing guidance to states on the use of work search formal warning policies when it is determined that a claimant failed to meet the state’s work search requirements,” according to Rosemary Lahasky, deputy assistant secretary at the Labor Department. “The guidance will be finalized and released to the state [unemployment insurance] agencies once this OMB review has been completed.”
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