LANSING – Recruitment to the Michigan Unemployment Office during the pandemic has led to fraud and unauthorized access to databases, reports the audit was released on Friday.

The State Auditor General’s Office said the Unemployment Insurance Agency failed to hold temporary staff companies accountable for $ 3.8 million for fraud committed by their employees and failed to inspect 5,500 part-timers involved in claims during the pandemic.


Some of those hired were convicted of misdemeanors or felonies for crimes including armed robbery, embezzlement and identity theft – and some of these workers were still employed at the time of the inspection.

The inspection did not specify whether any of those who had previous offenses were involved in the fraud.

Friday’s report is the latest in a series of disputes involving the resignation of two UIA directors over their processing of payments during a pandemic. A January audit found that the agency had issued $ 8.5 billion in improper payments.

The last audit took place between October 2019 and the end of 2020, when UIA’s pre-pandemic staff increased more than fivefold to handle a record 5 million claims and send $ 36 billion in federal payments to the unemployed.

In April 2020, the state’s unemployment rate peaked at 26 percent.

“As UIA worked quickly to increase the department’s ability to meet the needs of Michigan, the implementation was far from perfect,” UIA Director Julia Dale said Friday.

“The lessons learned and opportunities provided by the audit serve as a platform to launch an improved Michigan unemployment agency.”

She was appointed Democrat Governor Gretchen Whitmer in October and is the head of UIA third director since the beginning of the pandemic.

MP Stephen Johnson, R-Wayland, said he would chair the joint oversight committee, hearing on the latest audit in a couple of weeks.

“If someone is surprised at this point in the game to hear that the unemployment agency has failed in something, then they are living under a rock,” Johnson said. “We see an agency that did not follow proper procedures and continued to disappoint Michigan residents.”

The audit took a sample of 136 contract workers and found that 63 still have access to government databases more than a month after they stopped working at the agency.

Among other issues, UIA had no data sharing agreements with three recruitment agencies and 16 Michigan Works! agencies that help the unemployed find work.

UIA temporary staff have undergone various levels of training, and some have not learned to perform basic processes such as social security rules, only 15 to 165 days after starting work.

Many problems began after the Unemployment Agency stopped using a merit-based recruitment system, which led to increased control by lawmakers.

State Sen. Michael MacDonald, R-Macomb Township, urged Whitmer to work with lawmakers to resolve the issue.

“This alarming report is another example of the governor’s failed leadership in supporting Michigan workers who have lost their jobs and protecting the funds paid by labor providers to provide critical unemployment benefits,” MacDonald said in a statement on Friday.

Dale said UIA has tightened policies on issues such as access to the agency system, criminal case checks, data security, staff training and hiring contractors.

“I am confident that the reforms we are pursuing throughout the agency will help bring about much-needed change,” Dale said. “We are an agency that is committed to acting properly on the part of Michiganders, and will do everything in our power to implement improvements in the future.”

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