Audit: Michigan Unemployment Agency Hired Ex-Criminals to Manage Jobless Claims

The state agency tasked with processing the influx of unemployment claims in 2020 brought on many workers who had previously been convicted of financial crimes, including embezzlement and identity theft, according to an audit report.

The audit, compiled by Auditor General Doug Ringler and released Friday, found Michigan’s Unemployment Insurance Agency (UIA) gave jobs to 169 individuals who had previously been convicted of misdemeanors or felonies.

Forty-seven of them had previously been convicted of one or more felonies, which included, according to the report, “embezzlement, illegal sale/use of financial transaction devices, false pretenses with intent to defraud, identity theft, and armed robbery.”

The audit found that UIA, which is a division of the state’s labor department, still employed 71 of the 169 individuals as of December 31, 2020.

UIA Director Julia Dale, who was appointed by Gov. Gretchen Whitmer (D) in October 2021, did not dispute the audit findings and admitted that the hiring spree carried out by the agency to manage the coronavirus-prompted spike in unemployment claims in 2020 had been “far from perfect,” according to Bridge Michigan.

“As UIA worked quickly to increase the department’s capacity to address Michiganders’ needs, the execution was far from perfect,” Dale said. “The lessons learned and opportunities articulated by the audit serve as the platform to launch an improved Michigan Unemployment Insurance Agency.”

Dale also had to answer for her agency’s missteps in a state legislature hearing in January after Deloitte & Touche LLP, through its own audit, discovered UIA had paid out more than $8 billion in fraudulent claims from March 2020 to September 2021, according to M Live.

Several reports indicate UIA has been rife with issues for some time. As M Live noted, prior to Dale, agency Director Steve Gray was given $85,872 as part of an agreement at the end of 2020 that he resign amid Republicans calling for his termination. The agreement included a confidentiality clause, according to the outlet.

The latest audit report detailed the scale of the claims surge UIA was hit with from March 2020 to June 2021. It stated UIA processed 5.2 million unemployment claims and doled out $36.5 billion in unemployment benefits during that time period.

To meet the dramatically increased workload, UIA used staffing agencies to bring in new workers but failed to ensure criminal background checks were conducted on 5,508 of them, according to the audit, which is how the 169 individuals with criminal histories were hired.

Additionally, the audit found that out of a 139-worker sample, 63 had retained access to a UIA data system for more than a month after they had left the agency.

“Consequently, some former workers continued to have access to view and make unauthorized changes to claims and confidential claimant and employer information … including confidential information obtained from the Department of Treasury,” per the audit.

State Rep. Steven Johnson (R) is planning to hold a joint Oversight Committee hearing to investigate the latest audit findings in a couple weeks, Bridge Michigan noted.

“If anyone at this point in the game is surprised to hear that the unemployment agency failed at something, they have been living under a rock,” Johnson said, according to the outlet. “We’re seeing an agency that didn’t follow the proper procedures and that continued to fail the people of Michigan.”

Write to Ashley Oliver at aoliver@breitbart.com. Follow her on Twitter at @asholiver.