State audit finds billions in unemployment fraud
By BETH HUNDSDORFER
Capitol News Illinois
bhundsdorfer@capitolnewsillinois.com
SPRINGFIELD – A state audit released Thursday found nearly $2 billion in federal money intended to help unemployed Illinoisans during the pandemic was lost to fraudulent claims in Illinois.
The Illinois Department of Employment Security blamed “insufficient and flawed federal guidance” and a lack of controls on a hastily constructed program put together by the Trump administration.
The federally-funded Pandemic Unemployment Assistance program provided up to 39 weeks of benefits for unemployed individuals who ran out of regular unemployment benefits and for self-employed individuals, gig workers and others not eligible for regular unemployment.
The report released Thursday by Auditor General Frank Mautino covered much of the life of the program, July 2020 through June 2021.
In the early days of the pandemic, amid business shutdowns and high unemployment, states struggled under a crush of claims from those laid off during those shutdowns. Amid this volume of claims, IDES was forced to try to weed out the fraudulent claims while under pressure to get money into the hands of the recently unemployed.
The Pritzker administration has said the PUA program was designed hastily and does not give employers an opportunity to challenge fraudulent claims because the type of workers applying for benefits do not technically have employers. The PUA program also eliminated existing controls, including income and employment verification, according to a statement by IDES.
Much of the fraud, up to $163 billion estimated nationwide, involved identity theft.
Scammers filed unemployment claims using false identities and then had the payment method switched from the debit cards that people receive when they qualify for benefits to direct deposit into an account accessible by them.
The audit found that, of the $3.6 billion in PUA paid out from July 2020 through June 2021, nearly $1.9 billion was found to be fraudulent, mostly due to identity theft.
“Overpayments associated with identity theft and traditional fraud within the PUA program was unprecedented and resulted in fraudsters using highly sophisticated techniques to take advantage of the current economic condition created by the COVID-19 pandemic,” the audit stated.
The audit found IDES:
Failed to implement general information technology controls over the Pandemic Unemployment Assistance.
Failed to maintain accurate and complete pandemic unemployment assistance claimant data.
Failed to perform timely cash reconciliations.
IDES responded that the system used to manage the PUA program is independent of the system used to manage regular unemployment benefits. From the beginning of the pandemic in March 2020 through the end of 2021, IDES stopped $40 billion in fraudulent payments from both state and federal programs, according to the agency’s statement.
Republicans are calling for hearings related to IDES’ handling of the programs and, specifically, whether the agency failed to follow federal recommendations for fraud prevention tools made available before the pandemic.
“The Pritzker administration and IDES have refused to disclose the extent to which fraud affected our unemployment system and this audit makes abundantly clear why,” said Rep. Tim Butler, R-Springfield, said in a statement. “The loss of nearly $2 billion, more than half the funds for the PUA program, displays an unprecedented level of negligence by the administration and IDES management. Blaming the previous president’s administration is an unacceptable excuse and we need immediate hearings to get to the bottom of this failure.”
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government that is distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
Local News
Mother Mac unveils new lights and scoreboard
Spread the loveBy Kelly White Across the nation, women’s sports are on the rise in terms of viewership, enthusiasm, sponsorship and excitement. Mother McAuley is no stranger to the impact that women’s athletics has on the development of an individual, strengthening of a team and key skills and attributes developed along the way. South Side…
Cicadas in the park in Palos Park
Spread the loveBy Kelly White Cicadas are coming and the Village of Palos Park is ready. The village hosted its 31st annual Arbor Day Celebration on Sunday, May 5, themed, “The Wonder of Trees” at The Center in the Lodge, 12700 Southwest Highway, with featured speaker, Tricia Bethke of The Morton Arboretum who presented, “Cicadas…
Palos Heights SD 128 sees enrollment boom
Spread the loveBy Kelly White Over the past few years, Palos Heights School District 128 has experienced an explosive growth among incoming students. There has been a significant increase particularly at Indian Hill Early Learning Center, 12800 S. Austin Ave. Chippewa Elementary School, 12425 S. Austin Ave; Navajo Elementary School, 12401 S. Oak Park Ave;…
Comings & Goings: Orange’s Pancake House now open in Palos Heights
Spread the loveBy Kelly White Palos Heights is the home of a popular new breakfast café. Orange’s Pancake House, 11845 Southwest Highway, held a ribbon-cutting event on April 18. Owners, Elvia Briones, of Virgina, and Fernando Cruz, of Evergreen Park, said they were very excited to be in the heart of the Palos Heights community.…
Sisters make Chicago Lawn a world destination
Spread the love. Kathy Headley Your correspondent in Chicago Lawn and Marquette Manor 6610 S. Francisco • (773) 776-7778 . Earlier this month was the Fifth Lithuanian Documentary Film Festival, with distinguished guests from Lithuania and other parts of the United States visiting the neighborhood. They held a photo session in the editorial office of…
Happy Mother’s Day to everyone, everyone
Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place • (773) 517-7796 . Yet another Mother’s Day is upon us. I wish everyone a happy day. By everyone I do mean everyone. There are a lot of dads who do it alone, along with important mother…
Mother’s Day is truly a day to be celebrated
Spread the love. Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place • (773) 504-9327 . Mother’s Day happens on Sunday, May 12. If this isn’t something to celebrate, I don’t know what is. Motherhood means new life, new beginnings, new possibilities. Even if you won’t be seeing your mom, you can still…
Saint Xavier men’s volleyball finishes historic season in nation’s top 4
Spread the loveBy Jeff Vorva Correspondent The Saint Xavier men’s volleyball team made history by advancing to the semifinals of the NAIA Men’s Volleyball National Championship. But the Cougars fell to eventual national champion Georgetown (Kentucky), 25-21, 25-23, 22-25, 21-25, 15-10, on May 3 at Alliant Energy PowerHouse in Cedar Rapids, Iowa. Although there was…
Neighbors
Lyons Township to co-sponsor St. Patrick’s Day Parade in Countryside
Spread the loveBy Steve Metsch The annual Countryside St. Patrick’s Day Parade is getting a boost from the Township of Lyons. The township board unanimously approved a $1,000 sponsorship for the city’s popular event. “We have traditionally sponsored this event,” Township Supervisor Christopher Getty said at the board’s Feb. 8 meeting. “Although we have not…
Lyons man ‘accomplished something’ with Kilimanjaro climb
Spread the loveBy Steve Metsch Stephan Alheim of Lyons learned a lot about himself while making the 19,341-foot climb to the top of Mount Kilimanjaro in Tanzania. He learned preparation is important, especially when it comes to breathing properly. He also learned to have faith in the climbing guides. And he learned to always bring…
Lyons to raise water rate as Chicago charges more
Spread the loveBy Steve Metsch With its hand forced by Chicago, the Lyons Village Board has unanimously approved an increase in the water rate. The new rates will take effect March 1. Lyons has no choice but to raise the rate since Chicago raised the rate it charges water suppliers that sell water to the…
2 hurt in Justice house fire
Spread the love By Carol McGowan Two adults were taken to the hospital in good condition, with possible smoke inhalation, after a house fire at 8217 S. 85th Court in Justice last Thursday. The Roberts Park Fire Protection District was called to the fire just before 12:30 in the afternoon on February 10. Firefighters arrived…
Girls Bowling: Shepard, Stagg both heading to first state finals
Spread the loveBy Randy Whalen Correspondent The Stagg and Shepard girls bowling teams had coming into sectional weekend never advanced to the IHSA state finals. But with an opportunity to do that last week, both squads stepped up with great performances down the stretch and punched their tickets to the state finals. The Chargers and…
Mt. Carmel tops Rice in big Blue battle
Spread the loveBy Steve Millar Correspondent On a night when Mount Carmel honored one of its all-time best point guards — retiring the jersey of former Caravan and Illinois star Tracy Abrams at halftime — two of the Chicago Catholic League’s current top point guards staged an epic duel. Brother Rice junior Ahmed Henderson scored…
Girl wrestlers make history as first IHSA state qualifiers
Spread the loveBy Steve Millar Correspondent For Morton senior Karla Topete, Feb. 12 was a special day for a greater reason than just her winning a sectional wrestling championship. Topete and her teammates competed at the Andrew Sectional, one of four sectionals that marked the start of the IHSA’s first individual girls wrestling state series.…
High School Hockey: St. Rita drops two of three to Carmel, bows out of Kennedy Cup
Spread the loveBy Steve Millar Correspondent St. Rita came out angry for Game 2 of its Kennedy Cup playoff quarterfinal series with Carmel. Two days earlier, the fifth-seeded Mustangs were run off the ice by the fourth-seeded Corsairs in a 5-0 loss in which they gave up three first-period goals and were never really in…
College Report: Former Stagg standout Kazanecki gives hoops one more year
Spread the loveBy Jeff Vorva Staff writer The idea was for Tom Kazanecki to finish his basketball career at St. Ambrose in 2021. The former Stagg hoops standout was even toying with the idea of starting a military career, even though he had an extra year of athletics eligibility remaining, thanks to seasons getting snipped…