MacIver News Service | August 24, 2011[Madison, Wisc…] Cracking down on Unemployment fraud will take an upfront investment for new equipment and training, according to a state employee who helps administer the program
At Tuesday’s meeting of the Governor’s Commission on Waste, Fraud and Abuse, members from the Department of Workforce Development (DWD) came in front of the Commission to discuss possible savings within the Unemployment Insurance division (UI).
Rather than focus on the massive fraud within the program Deputy Administrator Andrea Reid of the UI Division proceeded to complain about understaffing and a heavy workload.
Unemployment benefit fraud in Wisconsin has skyrocketed over the past few years. Between 2008 and 2010, the amount of overpayments shot up from $21 million to $78 million. The number of cases increased 130 percent. The amount of overpayments over $1000 that were intentionally concealed went from $9.25 million in 2007 to $40.5 million in 2010, a 338 percent increase.
Even with the cases of fraud increasing, few people have been successfully prosecuted for it. In order to face punitive action, a person must have fraudulently received more than $5000 in benefits and committed 5 acts of concealment. In 2010, 2,169 people met those requirements, yet only 31 of them were prosecuted. That resulted in 11 convictions.
Recently, the Wisconsin legislature passed a one-week waiting period before would-be recipients can receive UI benefits. This move, criticized my many legislative Democrats as cruel, is expected to save the state up to $50 million a year as the extra time will allow the state to investigate the validity of claims.
However, Reid said the state’s ability to root out fraud is limited, in part, because the data processing equipment was more than 25 years old.
“This application is inefficient, does not meet our business requirements, and can not be modified quickly enough to respond to program modifications or law changes,” she said.
Moreover, the Department argued, 86 permanent positions had been lost, mainly through retirement between December 2010 and June 2011.
“We were expected to due this current workload with our current staff, supplemented with projects and LTE’s.” Reid said, “Turnover has seriously eroded our productivity.”
Reid pointed to problems with the current system that the department is working to rectify. In 2010 $3.1 billion in unemployment insurance payments were paid out in Wisconsin. The Department of Workforce Development was expected to process these benefits, she said, despite having a smaller staff than they usually did during a normal year, where benefits range from $850 million to $1 billion.
The Department of Workforce Development did bring two proposed solutions to the table. One being a new process wherein DWD would work in cooperation with the Department of Justice (DOJ) to prevent prison inmates from fraudulently receiving UI benefits. Under the new procedure, DOJ would send the Unemployment Insurance Division a new list of inmates on a daily basis to prevent inmates from receiving any sort of benefits.
Plans are also in place to change the way claimants could apply for benefits online. The Department would now ask a few questions about the individual and work searches before disbursing benefits.
“By forcing claimants to respond to the questions every week that it would alert them that we are on the look-out for fraudulent claims.,” Reid said.