The Department of Labor’s (DoL) Employment and Training Administration (ETA) does not require the National Association of State Workforce Agencies (NASWA) to report data on suspected unemployment insurance (UI) fraud to either the ETO or the Office of the Inspector General (OIG), according to a July 1 OIG memo.
With UI fraud running into the billions of dollars, that reporting relationship is set to change for the better, OIG and ETA said.
NASWA – which represents the state workforce agencies (SWA) for all 50 states and Washington, D.C. – operates a UI integrity center and an Integrity Data Hub (IDH), but had not been sharing that data with ETA or OIG. According to the memo, OIG had not properly informed NASWA of that reporting requirement.
“The UI program is exposed to substantial risks, including the cost of UI benefit payments based on fraudulent claims,” OIG’s Assistant IG for Audit Carolyn Hantz wrote in the memo. “NASWA reporting suspected UI fraud to the OIG will assist the OIG to effectively and efficiently detect and investigate large-scale fraud, deconflict investigations with SWAs, and identify and share fraud trends with ETA and SWAs in order to strengthen the UI program and help prevent fraud before it occurs.”
The latest OIG memo follows a February memo stating that the DoL paid over $5.4 billion in potentially fraudulent benefits between March and October 2020. OIG recommends the ETA act immediately to require NASWA to send suspected fraud, waste, or mismanagement data to both the OIG and the ETA. OIG also gave ETA 30 days to develop a permanent plan for OIG to be able to access IDH data.
ETA concurred with the recommendations, and chief of staff Ana Hageage said, “the detection and prevention of fraud in the unemployment insurance programs are of the utmost importance.” Hageage said the ETA is working to rearrange the cooperating agreement between ETA and NASWA to incorporate the new requirements.