Federal report: Unemployment delays, fraud result of slow implementation, outdated computers, poor oversight


WASHINGTON (WAVY) — The Department of Labor’s Inspector General released an audit report Wednesday afternoon of federal unemployment programs, in a critical assessment of how the states have struggled to get money into the hands of those who lost jobs, and in some cases lost homes and hope.

The report points to incompatible and outdated computers, understaffing and a failure to take recommended oversight action. That’s why millions of Americans waited so long to get unemployment benefits during the pandemic.

By January of this year nearly $400 billion went to the 50 states for unemployment programs that grew out of the CARES Act of March 2020. About 10% or $40 billion is estimated to have been paid improperly or was out and out fraud.

For people who lost jobs and didn’t get timely assistance there was increased credit card debt, depleted savings, food scarcity and homelessness.

Virginia was about average when it came to timely payments from two of the three major pandemic programs. But Virginia was dead last when it came to delivering money from the Pandemic Emergency Unemployment Compensation program. The PEUC provided an additional 13 weeks of benefits until the end of December. The national average to begin paying those benefits was 50 days after the program began. Virginia took twice that long, needing 101 days to get the benefits out.

In general, most states took more than 30 days for all three federal programs, more than a typical billing cycle for rent, mortgage or utilities. 44 of 50 states failed to do the recommended cross matches to avoid overpayments and fraud.

The report concluded that the overpayments, fraud and delays were primarily because states’ IT systems were not modernized, had insufficient staff, and federal guidance on the programs was unclear.

The Virginia Employment Commission told 10 On Your Side this afternoon it has made significant progress and continues to work on administering these programs. VEC has resumed work on its IT modernization project and expects to implement the last phase October 1.

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