The Pandemic Response Accountability Committee (PRAC) published a new report stating that legacy IT systems at the Department of Labor (DoL) and state and local governments are an overarching issue within the DoL’s unemployment insurance (UI) program.
During the COVID-19 pandemic, UI fraud ran rampant, with the Government Accountability Office estimating that it reached a range of $100 billion to $135 billion.
PRAC’s April 16 report cites legacy IT systems as a main reason UI fraud surged during the pandemic.
“We found several issues that contributed to the high amount of improper and fraudulent UI payments during the pandemic,” the report says. “These included pre-existing identified weaknesses in state UI programs – some of which were widely known and reported on prior to the pandemic – and how these weaknesses were exacerbated during the pandemic.”
PRAC found that the DoL’s legacy IT systems were one of four overarching preexisting issues in the UI program during the onslaught of the pandemic.
“Some state IT systems were not equipped to handle the volume of claims, and [state workforce agency] SWA IT systems may not have been easily compatible with the National Association of State Workforce Agencies (NASWA) UI Integrity Center’s Integrity Data Hub, hindering SWA’s ability to detect fraudulent payments,” the report says. “Furthermore, legacy IT systems result in higher processing time and are more difficult to modify for changes in federal guidance compared to modernized systems.”
The report notes that certain factors of the UI program exacerbated pandemic-era problems. PRAC found that issues including a surge in claims, untimely and unclear guidance from the DoL, and low staffing levels exacerbated problems with legacy IT systems during the pandemic.
According to the report, states cited that they received untimely and unclear guidance from DoL to make decisions about initial and continued eligibility. “States said that clearer, earlier, and more detailed guidance from DOL might have rendered a more efficient implementation process that would have prevented significant overpayments to claimants,” the report says.
PRAC also noted that states’ legacy UI systems prevented staff from streamlining and prioritizing claims to work and were more “burdensome” to change for the newer pandemic UI programs which, in turn, “required more time from staff to administer pandemic unemployment programs and work associated claims.”
The report concludes with four high priority recommendations for Congress from the DoL’s Office of the Inspector General (OIG):
- Extend the statute of limitations for fraud involving pandemic-related UI programs;
- Ensure the DoL and the DoL OIG have ongoing, timely, and complete access to UI claimant data and wage records;
- Grant the DoL OIG statutory authority to participate in asset forfeiture funds to combat fraud and other crime; and
- Ensure effective payment integrity controls to reduce improper payments in all UI programs including temporary ones, such as through broader requirements for mandatory cross-matching.
Throughout the year, lawmakers have introduced legislation in line with key Biden administration anti-fraud proposals that include the DoL’s high priority recommendations to Congress.
Rep. Jamie Raskin, D-Md., last week introduced the Government Spending Oversight Act to enact the White House’s call to expand and make permanent the PRAC’s Pandemic Analytics Center of Excellence – which is set to sunset at the end of fiscal year 2025.
Last month, Sens. Gary Peters, D-Mich., and Mitt Romney, R-Utah, introduced a Senate version of that bill.
“It is critical that the Inspector General community maintain the data analytics capability of the PRAC beyond the PRAC’s scheduled sunset date of September 30, 2025, so that the Inspector General community has an effective analytics platform to oversee federal spending,” PRAC Chair Michael Horowitz said in favor of the new bill. “It would be a wasted opportunity to allow this fraud fighting tool to expire, as happened with the Recovery Operations Center in 2015.”
