A recent editorial by the Youngstown Vindicator:
The March 2020 business shutdown driven by the COVID-19 pandemic created an unprecedented surge in Ohio’s unemployment claims, exposing cracks in the state’s unemployment compensation system, leaving in a lurch countless Ohioans in need of assistance.
Undoubtedly that created significant hardships for many Ohioans who were forced to wait for responses and wait for a critical lifeline – their unemployment checks – needed to provide for their families. But it wasn’t the only crisis that resulted from the weaknesses in this unprepared system operated by the Ohio Department of Job and Family Services.
A performance audit conducted by Ohio Auditor Keith Faber, ordered by Ohio lawmakers and released Oct. 28, determined that Ohio’s unemployment system paid out a whopping $3.8 billion in state and federal public funds either by mistake or fraudulently between April 2020 and June 2021.
Most of those overpayments – worth billions – was due to errors or mistakes by a worker, employer or state officials, the audit says. In total, more than $3.3 billion was mishandled internally as a result of overpayment.
It’s now clear, however, that while Ohio’s Department of Job and Family Services was ill-prepared to handle the onslaught of claims, countless dishonest people were prepared and already calculating how to take advantage of the gush of federal taxpayer dollars entering Ohio from Washington, D.C.
The ODJFS audit indicates that some $475 million was paid out in fraudulent cases.
In his report, Faber notes that the pandemic and the resulting strains on the system exposed underlying issues leading to long delays in processing times and a lag in efficiency, even when compared to peer states that were experiencing the same challenges as Ohio’s system.
In fact, the report indicates that while Ohio exceeded the acceptable level of performance in claims processing times prior to the pandemic, when the system became stressed, Ohio’s Unemployment Insurance Operations office, or OUIO, fell behind comparable peer states in its ability to efficiently process claims. Faber attributed that, in part, to “antiquated systems that were not designed to handle the volume of claims being submitted during the pandemic.”
But it’s not all about antiquated systems, and Faber’s office also pointed out the “lack of controls” that existed in the department.
ODJFS Director Matt Damschroder who, to be fair, has been director only since July, has assigned some blame on the unprecedented surge in claims, and certainly that had something to do with it. But it does go further than that.
Here is just one interesting detail from the report. In just the first few months of the pandemic alone, nearly 24,000 Ohioans were ordered to repay overpayments they mistakenly received. Several reasons that the incorrect payments were approved included that the state’s unemployment system relied on a computer system dating back to 2004; because there weren’t adequate controls in place for the system that paid out the federal benefits; and because officials prioritized paying out benefits as quickly as possible before verifying that recipients were even eligible to receive the money.
We are pleased to see our state legislators and Faber’s office working to find answers for this debacle. It’s outrageous, however, that it took a lack of preparation when Ohioans needed it most, not to mention a missing $3.8 billion in taxpayer funds to get us to this point.
As part of his audit, Faber’s office has made six recommendations and five issues for further study, all intended to assist ODJFS in increasing efficiency, effectiveness and transparency.
Indeed, these suggestions must be analyzed and worked through in great detail by a team comprised of both managers and administrators, but also by those workers on the front lines who, undoubtedly, saw first-hand the failures of Ohio’s unemployment processing center. These recommendations must be viewed with the seriousness and urgency that this failure deserves.
Damschroder says there is work already under way to address the issues. Good.
Let us hope it is not too little, because it already is about $3.8 billion too late.
— Youngstown Vindicator, Nov. 7