Chambana Sun

State Sen. Chapin Rose (R-Mahomet) has denounced the mishandling of unemployment payments during the COVID-19 pandemic by the Illinois Department of Employment Security (IDES), following a report from the auditor general. 

Rose’s comments come after a report from the Auditor General reveals that the state agency distributed over $5 billion in fraudulent or excessive claims, with millions of dollars sent to incarcerated individuals and the deceased.

“I think during the early days of the pandemic we felt that everyone was doing the best that they could with an extremely difficult and unprecedented situation,” Rose said in a statement. “However, it quickly became clear to me and countless others on both sides of the aisle in the General Assembly that the taxpayers were being robbed blind by what was happening at IDES. The Governor ignored these warnings and told us the situation was under control. I filed the resolution that led to this audit so that we could all finally get some answers and find out how bad it really was.” 

“This audit has made it crystal clear that the administration’s management of the unemployment system during COVID was an unmitigated disaster of historic proportions. More than $5 billion was paid out improperly, and only about a tenth of that was recovered. $6 million in payments went to people who were deceased and a whopping $40 million was paid to people who were behind bars at the time. While we are still reviewing all the details of the scathing audit, it’s clear that the agency failed to follow its own safety protocols, and, according to the audit, is apparently still refusing to follow common-sense guidance from the feds. All the while, the agency completely dropped the ball on the one thing it said it was focused on, which was getting unemployment benefits in a timely matter to the people who desperately needed them."

Rose tells that Illinoisans are disadvantaged. 

“The people of Illinois should be disgusted at how badly their money was handled and how little was done to account for the outright theft and gross incompetence," Rose said. "The people who were supposed to serve as stewards of their resources completely failed them, and their ineptitude served to embolden and help criminals to abuse the system and steal benefits. I have constituents who were lawfully entitled to benefits that they never received, and then now they have to read about billions that are missing.”

Blame shifting has now emerged as a key theme from the Pritzker administration. Gov. J.B. Pritzker himself refused to discuss the report, instead pointing to IDES. In response, IDES spokeswoman Rebecca Cisco called out the administration of former president Donald Trump who she said required the state to use “a poorly designed and brand new unemployment insurance program on their own in record time with continuously changing federal guidance,” according to Chicago Tribune. However, the actual audit paints a different story, placing the responsibility directly on Pritzker and IDES. 

“IDES was not prepared to respond to the needs created by the pandemic,” the report from Auditor General Frank Mautino’s office stated. “IDES did not have a plan for responding to recessions and potential surges in claims.”

The performance audit conducted by the Office of the Auditor General highlights key findings related to the unemployment programs administered by the Illinois Department of Employment Security during the period of March 1, 2020, to September 6, 2021. The audit reveals significant issues with overpayments, including fraud and identity theft, totaling $5.24 billion in the Pandemic Unemployment Assistance (PUA) and regular Unemployment Insurance (UI) programs. The report also identifies challenges IDES faced during the pandemic, such as delays in processing claims and susceptibility to fraud due to suspended defenses. The audit report contains seven recommendations for IDES to improve its operations and prevent future issues with unemployment benefits distribution. The report’s key findings detail the fraud undertaken.

“Overpayments (which include fraud, non-fraud, and identity theft) were an issue in both the regular UI and PUA programs. IDES reported overpayments for FY20 to FY22 that totaled $5.24 billion; regular UI accounted for $2.04 billion and PUA accounted for $3.20 billion,” the performance audit reads. “Considering gross benefits associated with regular UI claims were 2.5 times higher than gross benefits associated with PUA claims, it shows the magnitude of fraud experienced in the PUA program. IDES noted stopped or recovered payments of $150.36 million and $361.34 million for the regular UI and PUA programs respectively.”

Mautino further found IDES failed to maintain appropriate records. The audit found IDES failed to maintain accurate and complete accounting records and supporting documents for the Trust Fund, raising concerns about the internal controls safeguarding Trust Fund assets. As a result, auditors were unable to determine the opening net position and activity for the year ended June 30, 2022, impacting the statements of revenues, expenses, and changes in net position and cash flows. The audit also highlighted the Department's mishandling of Pandemic Unemployment Assistance (PUA) claimant data, leading to challenges in assessing claimants' eligibility. Additionally, improper recording of receivables and mismanagement of overpayment receivables were noted, prompting the need for better financial reporting controls, according to the Office of the Auditor General's report. 

See the Auditor General’s audit, report, and finding HERE.