Unemployment agency wrongfully paid out millions to people who are dead or incarcerated, audit finds

LANSING, Mich. (FOX 2) - Michigan's unemployment agency potentially issued almost $250 million in improper payments to dead people, incarcerated citizens, and others.

Of the funds that were distributed, $1.7 million went out to individuals that were not eligible for money despite the Unemployment Insurance Agency determining they should not receive checks.

The period that was reviewed took place between January 2020 and October 2022.

The findings were made public in an audit of the state's unemployment agency, which is responsible for distributing checks to individuals who qualify for benefits.

Also listed in the Auditor General's report were instances of the department failing to review claims made by people posing as others, as well as failing to try and recover payments or assess penalties in instances of fraud.

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The agency could still recoup losses in wrongfully-distributed funds and even assess penalties on those who fraudulently received money from the government. The audit says it didn't attempt to recover 96.7% of related payments or assess fraud penalties.

There were also cases of the agency not following up with nonresponsive employers and claimants identified in some of its crossmatches.