$ 6.2 billion in unemployment assistance overpayments, agency says
The government overpaid $ 6.2 billion in two unemployment insurance programs in the first year of the pandemic, according to a surveillance report released Tuesday.
Millions of Americans have lost their jobs as the coronavirus slammed the economy in the spring of 2020, forcing many to rely on jobless benefits and straining state unemployment systems. In March 2020, Congress passed legislation that expanded and supplemented regular unemployment benefits, including a new program called Pandemic Unemployment Assistance, which extended assistance to workers excluded from their state’s systems, such as workers self-employed and construction workers.
The Government Accountability Office report states that the Department of Labor reported that “states have identified more than $ 3.6 billion in PUA overpayments from March 2020 to February 2021.” In addition, states have identified $ 2.6 billion in regular unemployment insurance overpayments in the last three quarters of 2020.
The report notes that “overpayments do not necessarily result from fraud, although some may be”. States generally have to compel people to repay overpayments, but they can also waive this requirement if they find that a person has been “no-fault”.
For example, in October, the Colorado Department of Labor and Employment forgave 9,000 Coloradans $ 1.4 million in overpayments in the event of an unemployment pandemic after recognizing that confusing forms for construction workers may have led some people to overestimate their income.
The figures reported by GAO represent a much higher overpayment amount than previously known. When GAO addressed the issue in a January report, it found that Department of Labor data showed $ 1.1 billion in UI overpayments in the event of a pandemic between March and December 2020, and he recommended that the agency collect data from states.
GAO’s January report also reiterated and expanded on concerns about fraud in an emergency relief program run by the Small Business Administration called the Economic Injury Disaster Loan Program, which offers up to $ 10,000. businesses and non-profit organizations. By the end of December, the agency had approved 3.6 million low-interest loans worth $ 197 billion.
GAO reported that the Small Business Administration’s independent auditor said in December that the agency “was unable to provide adequate documentation to support a significant number of transactions and account balances related to EIDL in due to inadequate processes and controls. “
The auditor also found more than 6,000 loans worth more than $ 212 million “made to potentially ineligible borrowers,” the Government Accountability Office found.
Between May 2020 and February, the Justice Department announced charges against more than 50 defendants in more than 30 economic disaster loan fraud cases, GAO said. In February, at least five people had pleaded guilty to federal charges of program fraud.
The Small Business Administration told the watchdog that it is working to better document its processes and controls for future audits, and that it agrees with a GAO recommendation to put in place a monitoring plan. for disaster loans.