Above a massive $1.6 billion was paid as unemployment benefits to all the individuals who didn’t seek employment during the fiscal year 2016. The statistics were revealed by an audit report released by the Government Accountability Office.
The unemployment insurance is an amount that is paid to all those individuals who lose employment and are actively searching for work. In some states, the active job search may also require submissions of job applications, LinkedIn accounts, going to events that promote networking, and paying regular visits to job center.
The audit took place to check if the employment insurance beneficiaries who were not actively searching for employment was affecting the program’s payments and if they caused any irregularities. In the fiscal year 2016, the DOL – Department of Labor program for the unemployed was among the top seven improper payments in all of the federal payment programs. The reason for the irregularity being beneficiaries, not even trying to search for employment.
The report further elaborates that though federal law outlines requirements for those who receive the money, the states themselves too could decide what else could be made as requirements for being a beneficiary, and this may differ from one state to another.
“Some states have formal warning policies that allow UI claimants to receive benefits after the first discovered occurrence of their failing to meet work search requirements while other states do not have such policies,” the report stated. “As a result, states are inconsistent in whether they report such benefit payments as overpayments, which could have an impact on DOL’s reported improper payment rate.”
The report further explained that Columbia along with 18 other states have various warnings and do not count the benefits paid to the people who didn’t search for employment as an overpayment.
“According to Department of Labor’s estimates, over $1.6 billion in benefit payments were made to claimants for weeks for which they were issued formal warnings in fiscal year 2016. DOL’s analysis further shows that if formal warning cases had been included in DOL’s calculation of the overpayment rates for fiscal year 2016, the nationwide overpayment rate would have increased by about 5 percentage points, from an estimated 11.1 percent to an estimated 16.3 percent,” the report said.
The Labor Department has set a requirement of all the improper payment rates to be less than 10 percent for each of the states, and if exceeded they would have to submit a correction plan to the agency in order to correct mistakes and save up improper payments.
“In preparing guidance for states, DOL has an opportunity to determine and communicate how state policies on work search requirements and their related overpayment reporting should align with federal requirements and reporting expectations,” the GAO said. “Providing specific information on any actions required and, if actions are required, setting timeframes for completion and monitoring states’ responses to the guidance could help ensure that DOL achieves its desired results.”
The Employment and Training Administration “is developing guidance to states on the use of work search formal warning policies when it is determined that a claimant failed to meet the state’s work search requirements,” Lahasky had said. “The guidance will be finalized and released to the state [unemployment insurance] agencies once this OMB review has been completed.”