The Illinois Senate Republican Caucus has raised strong concerns over the dysfunction within the Illinois Department of Employment Security (IDES) during the COVID-19 pandemic, as a shocking audit report unveils a staggering $5 billion in unaccounted-for unemployment payments.
The damning report highlights a lack of planning and questionable decision-making by IDES, leaving citizens and businesses bearing the burden of the state's mishandling. Taking to social media, the Caucus expressed their alarm at the scale of the issue highlighted in the recently released IDES audit.
“The IDES audit that was released today revealed $5 billion in unaccounted for unemployment payments during the COVID-19 pandemic,” the Illinois Senate Republican Caucus said on Facebook.
Auditor General Frank Mautino
| https://ballotpedia.org/Frank_J._Mautino
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 Sept. 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.
Read the Auditor General’s audit, report, and findings HERE.
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