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Performance Audit Report: COVID-19 — ETA Needs to Improve Its Oversight of States' Efforts to Identify UI Fraud Using Deceased Persons' Social Security Numbers

Record facts

Court	U.S. Department of Labor, Office of Inspector General (audit by Key & Associates, P.C.)
Filed	2025-08-15

Summary

A performance audit report to the Employment and Training Administration, Report Number 19-25-005-03-315, issued August 15, 2025 by Key & Associates, P.C. under contract to the U.S. Department of Labor Office of Inspector General, the second of four audits of high-risk unemployment insurance fraud areas. It asks how far ETA and state workforce agencies addressed potentially fraudulent CARES Act claims filed with deceased persons' Social Security numbers from March 2020 through October 2020. It states that as of September 2022 the OIG had identified $45.6 billion in potentially fraudulent benefits, $139.5 million of it here. The report finds ETA did not monitor states' investigation results, did not ensure the Integrity Data Hub was effective, and did not identify why states reported zero fraudulent overpayments. Testing of 185 claimants found $586,782 paid and $302,686 fraudulent.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

REPORT TO THE
EMPLOYMENT AND TRAINING
ADMINISTRATION

COVID-19: ETA NEEDS TO IMPROVE ITS
OVERSIGHT OF STATES’ EFFORTS TO
IDENTIFY UI FRAUD USING DECEASED
PERSONS’ SOCIAL SECURITY NUMBERS

DATE ISSUED: AUGUST 15, 2025
REPORT NUMBER: 19-25-005-03-315
AUDIT SERIES: HIGH-RISK AREAS FOR POTENTIAL
UI FRAUD, AUDIT TWO OF FOUR
This report was prepared by Key & Associates, P.C (Key)
under contract to the U.S. Department of Labor, Office of
Inspector General, and, by acceptance, it becomes a report of
the Office of Inspector General.

U.S. Department of Labor
Assistant Inspector General for Audit

BRIEFLY…

COVID-19: ETA NEEDS TO IMPROVE
ITS OVERSIGHT OF STATES’
EFFORTS TO IDENTIFY UI FRAUD
USING DECEASED PERSONS’
SOCIAL SECURITY NUMBERS

Why We Did the Audit

As of September 2022, the OIG had
reported a cumulative $45.6 billion paid
in four high-risk areas of unemployment
insurance (UI) fraud the OIG had
identified; claimants using deceased
persons’ Social Security numbers
(SSN)—$139.5 million—was the
second largest area. The OIG shared
its data and methodology for identifying
those claimants with the Employment
and Training Administration (ETA). ETA
is responsible for providing states with
UI program direction and oversight; the
states are responsible for ensuring UI
payments go only to eligible claimants
and for making determinations of fraud.

Based on the OIG’s concerns regarding
UI benefits paid in each of the high-risk
areas, the OIG began a series of four
audits; this is the second in the series.
Specifically, for claimants using
deceased persons’ SSNs, we
contracted with Key & Associates, P.C.
(Key) to answer the following question:

To what extent have ETA and state
workforce agencies (SWA)
addressed potentially fraudulent
CARES Act UI claims filed using
the SSNs of deceased persons?

Read the Full Report
For more information, go to:
https://www.oig.dol.gov/public/reports/o
a/2025/19-25-005-03-315.pdf.
What We Found

Key found the 10 SWAs selected for testing confirmed some
claimants filed fraudulent UI claims using deceased persons’ SSNs.
However, ETA took limited action to ensure states properly
addressed the potentially fraudulent UI claims filed using deceased
persons’ SSNs. While ETA transmitted claimant data associated
with potentially fraudulent UI claims to the 53 SWAs and Guam,
including instructions and requirements on investigations and due
process, ETA did not perform the following oversight actions:

• monitor nor require states to report the results of research or
investigations of potentially fraudulent UI claims, which would
have assisted ETA in identifying high-risk areas for UI fraud;
• ensure the National Association of State Workforce Agencies’
Integrity Data Hub (IDH) effectively provided states with useful
information to assist in identifying UI fraud; or
• identify systemic weaknesses that resulted in states reporting
zero fraudulent overpayments when UI fraud risk was at its
height during the pandemic.

These deficiencies occurred because ETA considered its oversight
responsibilities to be limited. Specifically, ETA: (1) did not consider
monitoring the results of states’ research and investigations as part
of its responsibilities, (2) measured IDH effectiveness by the
number of claims submitted to and flagged by the IDH rather than
by the outcomes of states’ fraud investigations, and (3) did not
detect states’ information technology systems or staffing were
insufficient to report fraudulent overpayments.

The OIG selected 185 claimants that filed potentially fraudulent UI
claims across 10 SWAs for Key to test. Key determined $586,782 in
UI benefits were paid, and the states confirmed $302,686
(52 percent) was fraudulent.

What We Recommended

Key did not make any new recommendations in this report. To
address the issues identified in this report and improve ETA’s
oversight of states’ efforts to identify fraudulent UI claims,
Regis & Associates, PC, an OIG contractor, made two
recommendations (numbers 1 and 3) to ETA in the first report of
this series, with which ETA generally agreed. That report, including
ETA’s responses to the recommendations, is available at:
https://www.oig.dol.gov/public/reports/oa/2025/19-25-004-03-
315.pdf.

U.S. Department of Labor – Office of Inspector General

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TABLE OF CONTENTS
INSPECTOR GENERAL’S REPORT .................................................................... 1
CONTRACTOR PERFORMANCE AUDIT REPORT ............................................ 5
RESULTS ............................................................................................................. 6
ETA Needs to Improve Its Oversight of States’ Efforts to Identify UI
Fraud Using Deceased Persons’ SSNs ..................................................... 7
CONCLUSION .................................................................................................... 24
RECOMMENDATIONS ....................................................................................... 25
Analysis of ETA’s Comments ................................................................... 25
EXHIBIT: TESTING RESULTS, FRAUDULENT AND NONFRAUDULENT
PAYMENTS FOR THE 10 SWAS ....................................................................... 27
APPENDIX A: SCOPE AND METHODOLOGY .................................................. 29
APPENDIX B: AGENCY’S RESPONSE TO THE REPORT ............................... 34

U.S. Department of Labor
Office of Inspector General

Washington, DC 20210
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INSPECTOR GENERAL’S REPORT

Lori Frazier Bearden
Acting Assistant Secretary
for Employment and Training
U.S. Department of Labor
200 Constitution Avenue NW
Washington, DC 20210

The U.S. Department of Labor (DOL or Department) Office of Inspector General
(OIG) contracted with the independent certified public accounting firm of
Key & Associates, P.C. (Key) to conduct a performance audit of the Employment
and Training Administration’s (ETA) and state workforce agencies’ (SWA or
state)1 efforts to address potentially fraudulent unemployment insurance (UI)
claims filed using the Social Security numbers (SSN) of deceased persons.

The OIG monitored Key’s work to ensure it met professional standards and
contractual requirements. Key’s independent audit was conducted in accordance
with generally accepted government auditing standards.

Key was responsible for the auditors’ evaluation and the conclusions expressed
in the report while the OIG reviewed Key’s report and supporting documentation.
Purpose
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and
subsequent legislation,2 Congress provided expanded UI benefits to workers who
were unable to work due to the COVID-19 pandemic. UI is a joint federal-state
program with each state administering a separate UI program under its own laws
while following uniform guidelines established by federal law.

1 This report uses “state” or “SWA” to refer to the body that administers the UI program within the
state, district, or territory. For the 50 states, as well as the U.S. Virgin Islands, Puerto Rico, and
the District of Columbia, that administrative body is a SWA. Therefore, there are 53 SWAs.
2 The CARES Act expanded UI benefits through December 31, 2020. On December 27, 2020, the
Continued Assistance for Unemployed Workers Act of 2020 extended the CARES Act
UI programs through March 14, 2021. On March 11, 2021, the American Rescue Plan Act of
2021 further extended the CARES Act UI programs through September 6, 2021.

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According to ETA, which is responsible for providing UI program leadership,
direction, and assistance to SWAs, as of January 2023, about $888 billion was
paid in pandemicrelated UI benefits. In addition, from January 2021 through July
2022, ETA made $562.6 million available to support the 53 SWAs and Guam
with fraud detection and prevention, including identity verification and
overpayment recovery activities in pandemic-related UI programs.

The OIG conducts independent oversight of the UI program through audits to
strengthen the integrity and efficiency of the program and through criminal
investigations to detect and deter large-scale fraud. Applying the Department’s
Fiscal Year 2022 estimated improper payment rate of 21.52 percent to pandemic
UI expenditures, the OIG estimated at least $191 billion (22 percent) of the
$888 billion in pandemic UI benefits could have been paid improperly, with a
significant portion attributable to fraud.

As of September 2022, the OIG—aided by data analytics—had identified
$45.6 billion in potentially fraudulent UI benefits paid in four specific high-risk
areas, involving claims with SSNs:

1. filed in multiple states,
2. of deceased persons,
3. used to file with suspicious email accounts, and
4. of federal prisoners.3

That $45.6 billion included $139.5 million paid against claims filed using the
SSNs of deceased persons between March 2020 and October 2020.

When the OIG identifies anti-fraud measures that may help the UI program, it
shares them with the Department and SWAs as appropriate. As of
September 2022, the OIG had shared its claimant data and methodology on
potential fraud in the four high-risk areas with ETA for distribution to the 53 SWAs
and Guam. The states are responsible for ensuring UI benefits are paid only to
eligible claimants and for making determinations of fraud. Based on our concerns
regarding UI benefits paid in each of the four high-risk areas, we began a series
of four audits; this is the second in the series. Specifically, for UI claims filed
using deceased persons’ SSNs, we contracted with Key to answer the following
question:

To what extent have ETA and SWAs addressed potentially fraudulent
CARES Act UI claims filed using the SSNs of deceased persons?

3 Alert Memorandum: Potentially Fraudulent Unemployment Insurance Payments in High-Risk
Areas Increased to $45.6 Billion, Report No. 19-22-005-03-315 (September 21, 2022), available
at: https:///www.oig.dol.gov/public/reports/oa/2022/19-22-005-03-315.pdf

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To answer this question, Key reviewed the actions taken by ETA and SWAs—
from April 7, 2021, through September 15, 2022—to address the OIG-identified
potentially fraudulent UI claims filed using deceased persons’ SSNs from
March 2020 through October 2020. Using a risk-based approach, the OIG
selected 185 claimants for Key to test from the States of Alaska, Indiana,
Kentucky, Louisiana, Michigan, Mississippi, Missouri, New Mexico, Vermont, and
Wisconsin (10 SWAs).4 Key also reviewed the 10 SWAs’ policies, processes,
and results of relevant actions taken. However, Key did not make determinations
of fraud or evaluate whether the states made the correct determinations. In
addition, Key surveyed the remaining 43 SWAs and Guam; 28 SWAs
(64 percent) responded. Key also reviewed updated guidance and UI payment
reporting activities that extended outside of the audit period. See Appendix A for
additional details on scope and methodology.
Results
Key found the 10 SWAs confirmed some claimants filed fraudulent UI claims
using deceased persons’ SSNs. However, ETA took limited action to ensure
states properly addressed the potentially fraudulent UI claims filed using
deceased persons’ SSNs.

ETA is responsible for providing oversight of UI fraud risk management, and
states’ management should report internal control deficiencies to ETA—
consistent with the Government Accountability Office’s Standards for Internal
Control in the Federal Government. Specifically, the standards state the
oversight body is responsible for overseeing the strategic direction of the entity
and obligations related to the accountability of the entity. This includes
overseeing management’s design, implementation, and operation of an internal
control system. Further, management should report deficiencies identified in the
internal control system to the oversight body.

ETA transmitted the OIG’s claimant data and methodology to the 53 SWAs and
Guam in April 2021, including instructions and requirements on investigations
and due process. However, ETA did not perform the following oversight actions:

4 The OIG selected this sample based on the highest per capita benefits paid. The OIG calculated
per capita benefits using the number of claimants flagged for using deceased persons’ SSNs and
the benefit amounts paid against these claims. The OIG then ranked the SWAs by the per capita
amount, largest to smallest, and selected the top 10 SWAs. The OIG also controlled for repetition
of SWAs within the four high-risk areas. Therefore, the OIG did not select the same SWAs if they
appeared in a higher-ranked risk area, resulting in the selection of 10 different SWAs for each of
the four high-risk audits. The OIG ranked the high-risk areas from highest to lowest: multistate
claimants, deceased persons’ SSNs, suspicious email accounts, and federal prisoners’ SSNs.

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• monitor nor require states to report the results of research or
investigations of potentially fraudulent UI claims, which would have
assisted ETA in identifying high-risk areas for UI fraud;

• ensure the National Association of State Workforce Agencies’
Integrity Data Hub (IDH) effectively provided states with useful
information to assist in identifying UI fraud; or

• identify systemic weaknesses that resulted in states reporting zero
fraudulent overpayments when UI fraud risk was at its height during
the pandemic.

These deficiencies occurred because ETA considered its oversight
responsibilities to be limited. Specifically, ETA: (1) did not consider monitoring
the results of states’ research and investigations as part of its responsibilities,
(2) measured IDH effectiveness by the number of claims submitted to and
flagged by the IDH rather than by the outcomes of states’ fraud investigations,
and (3) did not detect states’ information technology systems or staffing were
insufficient to report fraudulent overpayments.

Without knowledge of the states’ investigative results of potentially fraudulent UI
claims, ETA’s ability to assess UI program performance, identify high-risk areas,
and provide states with additional tools and guidance to prevent fraudulent
overpayments was impaired. In addition, without ETA establishing an
outcome-based metric for IDH cross-matches, ETA was unable to determine the
IDH’s effectiveness in assisting states with identifying fraud.

We selected 185 claimants that filed potentially fraudulent UI claims across
10 SWAs for Key to test. Key determined $586,782 in UI benefits were paid, and
states confirmed $302,686 (52 percent) was fraudulent.

We appreciate the cooperation and courtesies ETA extended us during this audit.

Laura B. Nicolosi
Assistant Inspector General for Audit

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CONTRACTOR PERFORMANCE AUDIT REPORT

Independent Auditors’ Performance Audit Report on Unemployment Insurance
Claims Filed with the Social Security Numbers of Deceased Persons

Lori Frazier Bearden
Acting Assistant Secretary
for Employment and Training
U.S. Department of Labor
200 Constitution Avenue NW
Washington, DC 20210

We were engaged by the U.S. Department of Labor (DOL or Department) Office
of Inspector General (OIG) to conduct a performance audit of the Employment
and Training Administration’s (ETA) oversight of state workforce agencies’ (SWA
or state)5 efforts to address potentially fraudulent unemployment insurance (UI)
claims filed using the Social Security numbers (SSN) of deceased persons.

Specifically, we conducted the audit to answer the following question:
To what extent have ETA and SWAs addressed potentially fraudulent
Coronavirus Aid, Relief, and Economic Security (CARES) Act UI claims
filed using the SSNs of deceased persons?
To answer this question, we reviewed the actions taken by ETA and SWAs—
from April 7, 2021, through September 15, 2022 (the audit period)—to address
the OIG-identified potentially fraudulent UI claims filed using deceased persons’
SSNs from March 2020 through October 2020. Using a risk-based approach, the
OIG selected 185 claimants for us to test from the States of Alaska, Indiana,
Kentucky, Louisiana, Michigan, Mississippi, Missouri, New Mexico, Vermont, and
Wisconsin (10 SWAs). We also reviewed the 10 SWAs’ policies, processes, and
results of relevant actions taken. However, we did not make determinations of

5 This report uses “state” or “SWA” to refer to the body that administers the UI program within the
state, district, or territory. For the 50 states, as well as the U.S. Virgin Islands, Puerto Rico, and
the District of Columbia, that administrative body is a SWA. Therefore, there are 53 SWAs.

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fraud or evaluate whether the states made the correct determinations. In
addition, we surveyed the remaining 43 SWAs and Guam; 28 SWAs (64 percent)
responded. We also reviewed updated guidance and UI payment reporting
activities that extended outside of the audit period. See Appendix A for additional
details on scope and methodology.
RESULTS
We found the 10 SWAs confirmed some claimants filed fraudulent UI claims
using deceased persons’ SSNs. However, ETA took limited action to ensure
states properly addressed the potentially fraudulent UI claims filed using
deceased persons’ SSNs.

ETA is responsible for providing oversight of UI fraud risk management, and
states’ management should report internal control deficiencies to ETA—
consistent with the Government Accountability Office’s (GAO) Standards for
Internal Control in the Federal Government. Specifically, the standards state the
oversight body is responsible for overseeing the strategic direction of the entity
and obligations related to the accountability of the entity. This includes
overseeing management’s design, implementation, and operation of an internal
control system. Further, management should report deficiencies identified in the
internal control system to the oversight body.

ETA transmitted the OIG’s claimant data and methodology associated with
potentially fraudulent UI claims to the 53 SWAs and Guam in April 2021,
including instructions and requirements on investigations and due process.
However, ETA did not perform the following oversight actions:

• monitor nor require states to report the results of research or
investigations of potentially fraudulent UI claims, which would have
assisted ETA in identifying high-risk areas for UI fraud;

• ensure the National Association of State Workforce Agencies’
(NASWA) Integrity Data Hub (IDH) effectively provided states with
useful information to assist in identifying UI fraud; or

• identify systemic weaknesses that resulted in states reporting zero
fraudulent overpayments when UI fraud risk was at its height during
the pandemic.

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(2) measured IDH effectiveness by the number of claims submitted to and
flagged by the IDH rather than by the outcomes of states’ fraud investigations,
and (3) did not detect states’ information technology (IT) systems or staffing were
insufficient to report fraudulent overpayments.

Without knowledge of the states’ investigative results, ETA’s ability to assess UI
program performance, identify high-risk areas, and provide states with additional
tools and guidance to prevent fraudulent overpayments was impaired. In
addition, without ETA establishing an outcome-based metric for IDH
crossmatches, ETA was unable to determine the IDH’s effectiveness in assisting
states with identifying fraud.
ETA Needs to Improve Its Oversight of
States’ Efforts to Identify UI Fraud Using
Deceased Persons’ SSNs
ETA is the federal agency responsible for providing states UI program direction
and oversight. ETA provided states with claimant data associated with potentially
fraudulent UI claims, recommended states use the IDH’s cross-match, and
required states to report aggregated fraudulent overpayment data. However,
after taking these actions, ETA did not sufficiently monitor states’ fraud detection
and reporting activities to ensure improvements to the integrity of the UI program.
This occurred because ETA considered its oversight responsibilities to be limited,
resulting in an impairment of its ability to assess performance of the UI program
and identify high-risk areas.
ETA Neither Monitored Nor Required States to
Report Results of Research or Investigations
In April 2021, ETA transmitted to 53 SWAs and Guam a list of claimants who
filed potentially fraudulent UI claims using deceased persons’ SSNs, as identified
by the OIG. ETA sent the list with investigative instructions and due process
requirements. ETA officials confirmed the agency had received electronic
notifications that all 53 SWAs and Guam received the email and downloaded the
claimant files. However, only 9 of the 10 SWAs selected for detailed review
confirmed they received their respective claimant lists from ETA’s April 2021
transmission. According to Wisconsin officials, they did not receive the list of
claimants. Also, Mississippi (one of the nine SWAs) did not access the files
before the secured link expired.

ETA was not aware of Wisconsin’s and Mississippi’s issues because, after
distributing the list, ETA did not monitor nor require the states to report the

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results of any research or investigations performed. Such monitoring activity
would have assisted ETA in identifying the receipt and access issues as well as
identifying high-risk areas for UI fraud. GAO’s Standards for Internal Control in
the Federal Government prescribes management should report deficiencies
identified in the internal control system to the oversight body, which—in the case
of the UI system—is ETA.

The 10 SWAs informed us that they did not communicate the results of
subsequent research or investigations to ETA even though their investigations
had confirmed the occurrence of fraudulent transactions. We submitted detailed
testing questionnaires to the 10 SWAs for each of the selected 185 UI claimants
to determine the SWAs’ actions taken to address the potentially fraudulent
CARES Act UI claims filed using deceased persons’ SSNs. Each SWA’s
response indicated whether the claims had been determined by the state to be
fraudulent or nonfraudulent.

We found the 10 SWAs paid $586,782 in UI benefits, and the states confirmed
$302,686 (52 percent) was fraudulent. This included $130,948 (43 percent) paid
against claims filed using deceased persons’ SSNs and $171,738 (57 percent)
paid against claims filed for other fraudulent reasons (see Exhibit, Tables 1 and 2).

In survey responses, 25 of 28 responding states6 (89 percent) indicated they did
not report to ETA any results of research or investigations regarding the claimant
list. The remaining three respondents indicated they generally report fraudulent
overpayments to ETA but did not report the results of investigations specific to
the claimant list.
ETA Did Not Consider Monitoring Results of SWAs’ Investigations as Part of
Its Oversight Responsibilities
ETA did not monitor the results of the SWAs’ research and investigations of
potentially fraudulent UI claims because it did not consider such monitoring
activities to be a required part of its oversight responsibilities. This is contrary to
government standards on management reporting and managing fraud risks as
well as recommendations from both the OIG and GAO.

ETA relied on the SWAs’ submissions of aggregated overpayment and fraud
data on the following two distinct pandemic program reports:

6 During a survey, we asked 43 SWAs and Guam if they reported results of investigations to ETA;
28 SWAs responded.

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1. Quarterly ETA 227: Overpayment Detection and Recovery reports7
for the Federal Pandemic Unemployment Compensation (FPUC)
and Pandemic Emergency Unemployment Compensation (PEUC)
programs; and
2. Monthly ETA 902P: Pandemic Unemployment Assistance
Activities8 reports for the Pandemic Unemployment Assistance
(PUA) program.

ETA required states to report aggregated data on UI claims, including
established overpayments and non-monetary determinations. ETA officials
asserted it is not ETA’s responsibility to require states to report the results of their
individual investigations. Specifically, ETA officials stated the agency provides
guidance and funding to states to operate UI programs and they had no reason
to collect claimant-level results of the SWAs’ investigations, nor did they have
the capacity to evaluate or analyze such data. However, ETA is the federal
agency responsible for providing UI program direction and oversight. This
responsibility includes distributing federal funds for states’ implementation of
the CARES Act UI programs, ensuring the integrity of the UI system, and
managing fraud risks.

ETA agreed with the OIG’s finding in a previous COVID-19 report9 that there was
a significant increase in fraudulent activity in the UI program. In addition, ETA
subsequently provided the OIG’s list of claimants to SWAs and informed the
SWAs it would collaborate with them to combat the sophisticated imposter
fraud affecting the UI system. Accordingly, ETA accepted and demonstrated
its monitoring responsibilities. Given this prior action, ETA’s decision not to
monitor the results of the SWAs’ research and investigations of potentially
fraudulent claims filed using deceased persons’ SSNs did not align with its
proposed collaborative effort to combat imposter fraud expressed to the
SWAs.

Further, ETA’s oversight responsibility to ensure the integrity of the UI system
includes managing its fraud risk environment. In October 2021,10 GAO

7 For FPUC and PEUC, SWAs used ETA 227 to report quarterly program activities, including the
establishment of overpayments, recoveries of overpayments, criminal and civil actions involving
overpayments obtained fraudulently, and an aging schedule of outstanding benefit overpayment
accounts.
8 For PUA, SWAs used ETA 902P to report monthly data on PUA activities, including application
and payment, denials and appeals, and overpayments.
9 Alert Memorandum: The Employment and Training Administration (ETA) Needs to Ensure State
Workforce Agencies (SWA) Implement Effective Unemployment Insurance Program Fraud
Controls for High-Risk Areas, Report No. 19-21-002-03-315 (February 22, 2021), available at:
https://www.oig.dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf
10 GAO, COVID-19: Additional Actions Needed to Improve Accountability and Program
Effectiveness of Federal Response, GAO-22-105051 (October 27, 2021), available at:
https://www.gao.gov/products/gao-22-105051

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recommended DOL designate a dedicated entity and document its
responsibilities for managing the process of assessing fraud risks to the UI
program consistent with leading practices as provided in its Fraud Risk
Framework (see Figure). In addition, GAO recommended DOL should have,
among other things, clearly defined and documented responsibilities and
authority for managing fraud risk assessments and for facilitating communication
among stakeholders regarding fraud-related issues.

Figure: GAO’s Framework for Managing Fraud Risks in Federal Programs

Source: GAO, A Framework for Managing Fraud Risks in Federal Programs,
Report No. GAO15593SP (July 2015), available at:
https://www.gao.gov/assets/gao-15-593sp.pdf

GAO has closed this recommendation based on actions taken by the
Department. On January 6, 2023, the DOL Secretary designated DOL’s Chief
Financial Officer (CFO) as the dedicated entity responsible for managing the
process of assessing fraud risks in the UI program. This designation is
consistent with leading practices as provided in GAO’s Fraud Risk

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Framework. However, the designation came almost 3 years after the onset of
the pandemic. The beginning of the pandemic was the most critical time for
administering new temporary programs, and states struggled to process the
highest level of claims in the history of the UI program.

ETA, with the advisory support of the Office of the Chief Financial Officer
(OCFO) Fraud Risk Working Group, also developed a UI Fraud Risk Profile in
August 2023. However, this was 8 months after the CFO was designated as
the antifraud risk entity. In April 2024, ETA published “Building Resilience: A
Plan to Transform Unemployment Insurance.” This plan details seven
transformation activities, including bolstering state UI programs against fraud.
The plan also listed ongoing and completed strategies, as well as legislative
reform proposals.

In May 2024, the OIG and OCFO met to discuss OCFO’s role and
responsibilities as related to the UI program. OCFO officials stated OCFO did
not specialize in UI programs; rather, OCFO advised ETA on UI fraud risk
management. According to OCFO officials, the UI Fraud Risk Profile is a
living document. Further, they stated ETA identified the risks it contains
based on high-risk areas reported in previous GAO and OIG reports, as well
as data ETA regional offices collected from the states. Altogether, ETA
identified 18 UI fraud risks in the UI Fraud Risk Profile, including:

• applicants fraudulently filing claims and receiving benefits across
multiple states,
• deceased persons’ identities used to file for UI benefits,
• suspicious email addresses or devices used to file UI claims, and
• incarcerated individuals or prison inmates applying for UI benefits
while misrepresenting their eligibility.11

In the UI Fraud Risk Profile, ETA and OCFO included responses to mitigate
each fraud risk. According to OCFO officials, the challenges to mitigating the
risks included the 53 SWAs having: (1) statutory authority to use or not use
IDH services and (2) varying laws that define fraud.

Nonetheless, ETA developed a UI Integrity Strategic Plan through which it
updated, oversaw, and communicated its UI anti-fraud strategies. According to
ETA, the strategic plan continuously evolves and includes strategies and
anti-fraud controls to combat emerging fraud schemes and address the highest
residual risks identified in the UI Fraud Risk Profile. ETA requires states to
submit Integrity Action Plans every 6 months to capture ongoing and planned
actions to mitigate each fraud risk and reduce improper payments. Further,

11 In some cases, fraud perpetrators have stolen inmates’ personally identifiable information to
apply for and receive UI benefits.

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according to the plan, ETA tracks and evaluates each fraud risk mitigation
strategy and action quarterly to determine their effectiveness in mitigating each
UI fraud risk and the level of risk that remains.

ETA officials stated, if ETA determined a risk response effectively decreased the
UI fraud risk to an acceptable tolerance level, the agency would update the risk
ratings in the UI Fraud Risk Profile. Accordingly, these updates could reprioritize
the remaining UI risks. If UI risks are reprioritized, ETA would revise the
associated control strategies in the UI Integrity Strategic Plan to target higher
priority risks. However, if ETA determined a risk response was not effective
enough to lower a risk to an acceptable risk tolerance level, the agency would
develop additional control strategies. These additional strategies would be added
to the UI Integrity Strategic Plan and tracked on a quarterly basis until the control
was fully implemented.

This process would be repeated until ETA determined the risk response
effectively decreased the risk to an acceptable tolerance level. As new fraud
threats emerge, ETA would: (1) update the UI Fraud Risk Profile and
(2) incorporate and track additional risk response activities to mitigate the newly
identified risks in the UI Integrity Strategic Plan. However, ETA could not provide
documented evidence that it performed quarterly evaluations of strategies and
actions to determine their effectiveness in mitigating each fraud risk and the
remaining levels of risk.

On June 27, 2024, ETA, through Training and Employment Notice No. 32-23,
announced the launch of the WorkforceGPS UI Fraud Risk Management
webpage.12 ETA and OCFO developed the webpage to encourage states to
share feedback with their ETA regional office, including states’ best practices in
fraud risk management that could assist other states in operating their UI
programs.

In GAO’s Framework for Managing Fraud Risks in Federal Programs, GAO
emphasized it is critical that the anti-fraud entity be located within the agency
and not the OIG, so the OIG can retain independence to serve its oversight
role.13 However, since June 2020, the OIG has been the leading federal entity
collecting pandemic-related UI claimant data from states nationwide,
performing risk assessments, and identifying high-risk areas. As previously
noted, the OIG provided ETA and states with claimant data associated with
high-risk potentially fraudulent UI claims and its methodology. These efforts
should not be deferred to the OIG’s independent oversight. As the oversight

12 Accessible with account creation request at:
https://ui.workforcegps.org/resources/2024/05/01/18/20/Unemployment_Insurance_Fraud_Risk_
Management
13 GAO, A Framework for Managing Fraud Risks in Federal Programs, GAO-15-593SP
(July 2015), available at: https://www.gao.gov/assets/gao-15-593sp.pdf

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agency for UI programs, ETA is responsible for establishing a routine program
integrity function. With the support of the CFO as the designated anti-fraud entity,
ETA needs to: (1) perform its own data analytics and risk assessments,
(2) identify high-risk areas, and (3) update the UI Fraud Risk Profile.

In a September 2023 OIG report,14 the OIG identified the importance of data
analytics in providing effective UI program oversight and combating fraud. In
addition, the OIG recommended ETA create an integrity program that
incorporates a data analytics capability and regularly monitor state UI claims
data to detect and prevent improper payments, including fraudulent
payments, and identify trends and emerging issues that could negatively
impact the UI program.

In response to the OIG’s report, ETA cited limited funding as the reason for
not being able to staff a data analytics team. In addition, ETA stated creating
a data analytics capability and monitoring state UI claims data would
duplicate DOL’s ongoing investment in the UI Integrity Center,15 including the
IDH. As an alternative, ETA stated it would leverage ongoing investments in
the UI Integrity Center’s IDH and work with the center to improve IDH data
analytics capabilities to better identify fraud trends. However, states are not
required to participate in the IDH and those that do participate do so to varying
degrees, which has limited the IDH’s effectiveness. As of September 21, 2023,
51 of the 53 SWAs16 used IDH services to some degree. The OIG’s
recommendations remained unimplemented as of August 7, 2025. We are not
reissuing these recommendations but emphasize the importance of addressing
them to resolve the deficiencies identified within this report.

14 Alert Memorandum: ETA Needs to Incorporate Data Analytics Capability to Improve Oversight
of the Unemployment Insurance Program, Report No. 19-23-012-03-315 (September 25, 2023),
available at: https://www.oig.dol.gov/public/reports/oa/2023/19-23-012-03-315.pdf
15 The UI Integrity Center, established by the Department and operated by NASWA, is designed
to: (1) assist states in their efforts to more effectively prevent, detect, and recover improper and
fraudulent payments and (2) improve program integrity by developing and promoting innovative
program strategies.
16 Guam does not have an IDH agreement.

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ETA Encouraged the Use of NASWA’s IDH
CrossMatch without Ensuring Its Effectiveness in
Assisting States with Detecting Fraud
In Unemployment Insurance Program Letter (UIPL) No. 23-20,17 ETA strongly
recommended states employ multiple techniques, including the use of the IDH’s
identity verification (IDV) crossmatch, to validate UI claims and uncover
suspicious or fraudulent characteristics. We found 9 of the 10 SWAs
(90 percent) responded they used IDH’s IDV cross-match to identify UI claims
for claimants fraudulently using deceased persons’ SSNs. These responses
align with the survey responses where 23 of 28 respondents (82 percent)
stated they used IDH’s IDV cross-match to review claims for the fraudulent
use of deceased persons’ SSNs.18

ETA has supported the enhancement of the IDH. On May 2, 2024, through
Training and Employment Notice No. 28-23,19 ETA announced the
development of a data sharing partnership between the U.S. Department of the
Treasury’s Bureau of the Fiscal Service and NASWA’s UI Integrity Center to
provide state UI agencies with access to Do Not Pay data sources and services.
These sources and services would be provided through states’ use of IDH.

In addition, the IDH participation agreement requires participating states to
access Do Not Pay data sources and services through IDH. According to ETA,
as of July 10, 2024, the IDH provided cross-matches to the Death Master File,
allowing states to identify potentially fraudulent claims filed in the names of
deceased individuals. ETA officials stated ETA and NASWA continue to work
closely with the Bureau of the Fiscal Service to incorporate additional Do Not Pay
data sources into the IDH for states’ use and anticipates the availability of two
new Do Not Pay data sources in Fiscal Year 2025. However, ETA did not ensure
IDH’s IDV crossmatch was effective in assisting states with detecting fraud.

According to NASWA data, claims filed using deceased persons’ SSNs from
March 2020 through October 2020 were flagged on 765 occasions. However, the
number of flags alone did not indicate the effectiveness of the IDH’s

17 UIPL No. 23-20, Program Integrity for the Unemployment Insurance (UI) Program and the UI
Programs Authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act of
2020 - Federal Pandemic Unemployment Compensation (FPUC), Pandemic Unemployment
Assistance (PUA), and Pandemic Emergency Unemployment Compensation (PEUC) Programs
(May 11, 2020)
18 According to NASWA, as of September 2023, 45 of the 53 SWAs (85 percent) rely on the data
generated by the IDH IDV system.
19 Training and Employment Notice No. 28-23, Announcement of a New Data Sharing Partnership
Between the U.S. Department of Treasury’s (Treasury) Bureau of the Fiscal Service (Fiscal
Service) and the National Association of State Workforce Agencies’ (NASWA) Unemployment
Insurance (UI) Integrity Center to provide State UI Agencies Access to Do Not Pay Working
System (DNP) Data Sources and Services through the UI Integrity Data Hub (IDH) (May 2, 2024)

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IDV cross-match tool in assisting states with detecting fraudulent UI claims filed
using deceased persons’ SSNs.

In a previous audit report,20 the OIG found greater oversight of IDH performance
was needed if ETA’s and states’ reliance on the tool for program integrity,
including fraud identification, was to continue. The OIG recommended ETA
complete an evaluation of the effectiveness of the IDH system, including the
methodology used in crossmatching data.

In response to the OIG’s recommendation, ETA contracted with a consulting firm
to perform a study21 of the IDH to answer the following questions:

1. How do participating states use the IDH to detect and prevent
fraud?
2. How effective do states consider the IDH to be in detecting and
preventing fraud?
3. What options are available to inform continuous improvement and
effectiveness of the IDH?

The consulting firm found states lacked consistency in how and when they used
the IDH, which made it difficult to measure the tool. According to the IDH study,
data sharing is the most significant value in the IDH. However, when states,
particularly larger states, do not contribute data to the IDH, other states do not
benefit and the IDH loses its value. The consulting firm also found many states
only reported initial UI claims data to the IDH and did not contribute continued
claims information.
ETA Measured IDH’s Effectiveness by the Number of Claims Submitted and
Flagged Rather than by the Outcomes of SWAs’ Investigations
The purpose of the IDH is not to identify fraud, but rather to provide states with
information to help them accurately identify potentially fraudulent claims, with a
minimum number of false positives and false negatives. A false positive would be
a legitimate claim incorrectly flagged for review, and a false negative would be a
fraudulent claim not flagged as suspicious. However, ETA did not establish a
performance metric to effectively assess how well the IDH results achieved this
goal because the current metrics focus on inputs and outputs22 rather than the
outcomes (fraud or nonfraud) of states’ fraud investigations. The SWAs are not
required to report investigative outcome data back to the IDH system. Without

20 COVID-19: ETA Can Improve Its Oversight to Ensure Integrity over CARES Act UI Programs,
Report No. 19-23-011-03-315 (September 22, 2023), available at:
https://www.oig.dol.gov/public/reports/oa/2023/19-23-011-03-315.pdf
21 Exploratory Study of the Integrity Data Hub (IDH) Final Internal Report (March 2024)
22 Inputs are the number of claims submitted to the IDH, and outputs are the number of claims
flagged by the IDH.

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ETA establishing an outcomebased metric for IDH cross-matches, ETA is
unable to determine how effective the IDH is in assisting states with identifying
fraudulent claims.

In a September 2022 OIG report,23 the OIG recommended ETA work with
NASWA to: (1) update the IDH Participant Agreement to require states to submit
the results of their UI fraud investigations and (2) ensure IDH cross-matches are
effective at preventing the types of fraud detected during the pandemic and
regularly update the IDH system using the results of state fraud investigations.

ETA offered to revise its required UI-related reports as an alternate approach to
meet the intent of the OIG’s recommendations. The revised reports would
capture: (1) the tools or interventions, including the IDH, a state used to detect
potential fraud issues and (2) the aggregated data for outcomes (e.g.,
determination, overpayment amounts) of the issues such tools or inventions
detect. ETA stated revising its required UI related reports would be more
effective. Specifically, the revisions would allow ETA to gather information on IDH
outcomes to track the results of investigations and determinations based on the
use of the IDH and other information. ETA estimated completing this alternative
approach to the recommendations in Fiscal Year 2024. However, as of
August 7, 2025, these OIG recommendations remain unimplemented. We are not
reissuing these recommendations but emphasize the importance of addressing
them to resolve the deficiencies identified within this report.
ETA Did Not Identify Systemic Weaknesses that
Resulted in States Reporting Zero Fraudulent
Overpayments
Since April 2020, UIPL Nos. 15-20,24 16-20,25 and 17-2026 have required SWAs
to report FPUC, PUA, and PEUC overpayments, including fraud, on ETA 227 (for
FPUC and PEUC) and 902P (for PUA) reports. We acknowledge that, for the first
3 months the programs were in existence, there may have been legitimate

23 COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds from Improper
Payments Including Fraud or from Payment Delays, Report No. 19-22-006-03-315
(September 30, 2022), available at:
https://www.oig.dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf
24 UIPL No. 15-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020—
Federal Pandemic Unemployment Compensation (FPUC) Program Operating, Financial, and
Reporting Instructions (April 4, 2020)
25 UIPL No. 16-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020—
Pandemic Unemployment Assistance (PUA) Program Operating, Financial, and Reporting
Instructions (April 5, 2020)
26 UIPL No. 17-20, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020—
Pandemic Emergency Unemployment Compensation (PEUC) Program Operating, Financial, and
Reporting Instructions (April 10, 2020)

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reasons the states lacked activity to report. However, the applicable UIPLs did
not waive the reporting requirements for that period. Therefore, we analyzed the
UI reporting activity for the 10 SWAs from April 2020 through September 2022,
including the first 3 months for which states were required to report.

As of January 2025, we found that, from April 2020 through September 2022, the
10 SWAs reviewed periodically reported zero fraudulent overpayments related to:
(1) the FPUC and PEUC programs on ETA 227 reports and (2) the PUA program
on ETA 902P reports. However, it is unlikely there were no fraudulent
overpayments disbursed for multiple quarters, considering the: (1) high UI fraud
risks associated with the quick implementation of the new, high-dollar value
pandemic programs; (2) evolving guidance; and (3) rapid increase in UI claims.
As part of ETA’s oversight role, it should have identified systemic weaknesses
that resulted in states reporting zero fraudulent overpayments when UI fraud risk
was at its height during the pandemic.

For FPUC, the following four SWAs reported zero fraudulent overpayments on
the quarterly ETA 227 reports:

• Alaska reported zero FPUC fraudulent overpayments for the six
quarters ending June 30, 2020, through September 30, 2021;

• Kentucky reported zero FPUC fraudulent overpayments for the
three quarters ending September 30, 2020, through
March 31, 2021;

• Michigan reported zero FPUC fraudulent overpayments for the
quarter ending June 30, 2020; and

• Mississippi reported zero FPUC fraudulent overpayments for the
quarter ending June 30, 2020.

For PEUC, the following seven SWAs reported zero fraudulent overpayments on
the quarterly ETA 227 reports:

• Alaska reported zero fraudulent PEUC overpayments for the
quarter ending June 30, 2020;

• Indiana reported zero fraudulent PEUC overpayments for the
quarter ending June 30, 2020;

• Kentucky reported zero fraudulent PEUC overpayments for the two
quarters ending September 30, 2020, and December 31, 2020;

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• Louisiana reported zero fraudulent PEUC overpayments for the
three quarters ending June 30, 2020; December 31, 2020; and
March 31, 2021;

• Michigan reported zero fraudulent PEUC overpayments for the
quarter ending June 30, 2020;

• Missouri reported zero fraudulent PEUC overpayments for the
quarter ending June 30, 2020; and

• Wisconsin reported zero fraudulent PEUC overpayments for the
quarter ending June 30, 2020.

For PUA, all 10 SWAs reported zero fraudulent overpayments on monthly
ETA 902P reports as follows:27
• Alaska reported zero fraudulent PUA overpayments for the
24 months ending April 2020 through December 2021, June 2022,
July 2022, and September 2022;

• Indiana reported zero fraudulent PUA overpayments for the
3 months ending April 2020, May 2020, and July 2020;

• Kentucky reported zero fraudulent PUA overpayments for the
7 months ending April 2020 through June 2020, and
August 2020 through November 2020;

• Louisiana reported zero fraudulent PUA overpayments for the
6 months ending April 2020 through August 2020, and
January 2022;

• Michigan reported zero fraudulent PUA overpayments for the
3 months ending April 2020 through June 2020;

• Mississippi reported zero fraudulent PUA overpayments for the
month ending April 2020;

• Missouri reported zero fraudulent PUA overpayments for the
2 months ending April 2020 and May 2020;

27 PUA fraudulent overpayments excluded fraudulent payments made as a result of identity theft.
States are required to report overpayments made as a result of identity theft separately on the
ETA 902P report.

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• New Mexico reported zero fraudulent PUA overpayments for the
2 months ending April 2020 and May 2020;

• Vermont reported zero fraudulent PUA overpayments for the
30 months ending April 2020 through September 2022; and

• Wisconsin reported zero fraudulent PUA overpayments for the
6 months ending April 2020 through August 2020 and
October 2020.

Previous OIG reports identified states’ pervasive non-reporting of overpayments,
including fraud, for CARES Act UI programs due to antiquated IT systems. In
May 2021,28 the OIG recommended ETA assist states with claims,
overpayments, and fraud reports to create clear and accurate information. In
August 2022,29 the OIG similarly recommended ETA work with states to ensure
submission of missing reports and information before the commencement of
ETA’s Fiscal Year 2022 financial statement audit.

In response to the August 2022 report, ETA agreed with the OIG that complete
and accurate reporting is important to the administration and oversight of the
temporary UI programs created under the CARES Act and related subsequent
legislation. To address the issue, ETA: (1) provided states training on reporting
accurate data and submitting ETA 227 and ETA 902P reports, (2) required
corrective action plans for states with challenges in reporting as part of their
State Quality Service Plans,30 and (3) conducted state-specific technical
assistance.

Also, ETA made available up to $525 million for the SWAs’ administrative costs
related to fraud prevention and overpayment recovery activities under
CARES Act UI programs. As of Fiscal Year 2024, ETA had awarded
$226.9 million in fraud prevention, detection, and integrity grants to 51 states and
territories.

As of February 2025, more than 2 years since the OIG’s August 2022
recommendation, all 10 SWAs are still establishing and reporting fraudulent

28 COVID-19: States Struggled to Implement CARES Act Unemployment Insurance Programs,
Report No. 19-21-004-03-315 (May 28, 2021), available at:
https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf
29 Alert Memorandum: The Employment and Training Administration Needs to Ensure State
Workforce Agencies Report Activities Related to CARES Act Unemployment Insurance
Programs, Report No. 19-22-004-03-315 (August 2, 2022), available at:
https://www.oig.dol.gov/public/reports/oa/2022/19-22-004-03-315.pdf
30 The annual State Quality Service Plan is the principal vehicle the state UI programs use to
plan, record, and manage improvement efforts. The State Quality Service Plan serves as the
programmatic plan portion of the grant document through which states receive federal UI
administrative funding.

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overpayments for the pandemic UI programs. The following list contains specifics
on the status of the 10 SWAs with reporting efforts ongoing:

• Alaska officials stated the SWA is still identifying fraudulent cases
in FPUC, PEUC, and PUA from time to time;

• Indiana officials stated the SWA is still identifying fraudulent
overpayments for FPUC, PEUC, and PUA. According to the
officials, Indiana does not have a specific stop date for identifying
fraudulent overpayments;

• Kentucky officials stated the SWA continues to establish
overpayments on FPUC, PEUC, and PUA when necessary, as this
is an ongoing process as Kentucky continues to receive information
from victims or family members. According to officials, Kentucky
does not have a set end date for this process. Furthermore,
Kentucky officials stated the SWA plans to continue processing
overpayments when an issue is detected unless otherwise directed
by ETA;

• Louisiana officials stated the SWA continues to identify fraudulent
overpayments and has no specific completion date for reporting
fraudulent overpayments. According to officials, the SWA is
awaiting guidance from ETA on a deadline for reporting;

• Michigan officials stated there is no specific date for when the state
will stop the process for identifying fraudulent overpayments for the
three CARES Act UI programs. In addition, the officials stated the
SWA continues to issue payments on federal claims from the
pandemic and has 3 years from the payment date to adjudicate a
fraud determination;

• Mississippi officials stated the SWA continues its efforts to identify
fraudulent overpayments associated with identity theft claims and
criminal convictions by law enforcement agencies. In addition, the
agency officials stated Mississippi does not have a specific end
date for identifying these fraudulent overpayments as it is an
ongoing effort to ensure the integrity of the unemployment
assistance process;

• Missouri officials stated the SWA occasionally establishes
fraudulent overpayments due to identify theft for the CARES Act UI
programs. However, the officials stated they believe the SWA has
identified most of the fraudulent overpayments since they have
cleared all UI claims backlogs from the pandemic. According to

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officials, Missouri does not have a specific stop date for identifying
fraudulent overpayments for the CARES Act UI programs;

• New Mexico officials stated the SWA has continued to search for
fraudulent overpayments for the pandemic UI programs. The
agency officials stated they will continue to research and refer
fraudulent overpayments to the OIG;

• Vermont officials stated their efforts to identify fraudulent
overpayments were ongoing, and they estimated completing this
work by the end of June 2025 to have the data necessary to file
ETA-required reports; and

• Wisconsin officials stated there is no statutory limit for how long
after CARES Act UI program benefits are paid that they may
investigate and find fraud if appropriate. Based on Wisconsin’s
response, we concluded the SWA is still identifying fraudulent
overpayments.

We commend ETA for continuing to work with the states to identify and report
fraudulent overpayments in the CARES Act UI programs. However, these efforts
to establish and report fraudulent overpayments have been ongoing for more
than 2 years and, based on the SWAs’ anticipated completion dates or absence
of a completion date, could take longer.
Antiquated IT Systems or Staffing Challenges Caused States to Report Zero
Fraudulent Overpayments
Due to IT system programming and staffing challenges, 9 of the 10 SWAs
experienced difficulties that led them to report zero fraudulent overpayments for
the FPUC, PEUC, or PUA programs, as follows:31
Alaska
Alaska officials stated the SWA did not have the necessary resources in place to
investigate and determine PUA fraud cases outside of the cases identified as
identity fraud until late 2021. Further, they stated PUA fraud investigations were

31 According to Missouri officials, the state did not have any reporting challenges during the
periods in which it reported zero fraudulent overpayments; the SWA officials stated they did not
identify any fraudulent overpayments. However, it is unlikely there were no fraudulent
overpayments disbursed for the entire quarter ending June 30, 2020, considering high UI fraud
risk associated with: (1) quick implementation of new pandemic programs with evolving guidance
and (2) initial claims and benefits disbursed during the pandemic being at the highest during the
quarter ending June 30, 2020. From April 2020 through September 2021, Missouri disbursed
413,044 initial payments totaling $1.4 million. Missouri disbursed 257,567 of those initial
payments (62 percent) totaling $661,308 (46 percent) during the quarter ending June 30, 2020.

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performed retroactively starting in October 2021, with the second quarter of
2020 being the first quarter where data was being gathered and analyzed to
identify potential fraud. According to Alaska officials, the ETA 902P instructions
did not permit Alaska to report an overpayment as fraud until it was investigated
and determined to be a willful misrepresentation. Alaska officials stated the first
fraud determinations were not made until the first quarter of 2022.
Indiana
Indiana officials stated IT staff worked as quickly as possible to properly integrate
all CARES Act program applications and payment processes into the state’s
existing UI system based on ever-changing federal guidance. In addition, Indiana
officials stated they also increased staff levels at the inception of the pandemic to
accommodate the increased work volume. Therefore, Indiana officials stated
claimants did not begin filing UI claims until May 1, 2020, and Indiana was not
able to establish fraudulent overpayments until May 8, 2020.
Kentucky
Kentucky officials stated the SWA encountered IT system limitations and
programming restrictions involving pseudo SSNs. Also, Kentucky SWA officials
stated reporting was hindered by software programming updates needed to
process overpayment determinations.
Louisiana
Louisiana officials stated strained IT systems and staffing resources were
stretched to capacity. According to agency officials, during that period, not only
were they given mere weeks to implement brand new programs with evolving
guidance, but they were also dealing with unprecedented claims volume.
Louisiana officials stated they often compare the experience to trying to build and
repair a plane in mid-flight.
Michigan
Michigan officials stated the SWA faced an unprecedented volume of claims
activity without the commensurate level of resources to properly process the
claims. In addition, agency officials stated an ETA system error prevented the
state from initially being able to file the reports for FPUC for periods from
September 2021 forward because the federal system did not accept large
numeric amounts. Specifically, for FPUC activity on PUA claim types, Michigan
officials stated the values created fatal errors in their system that could not be
overridden. According to Michigan officials, they informed ETA of the system
error in late 2021 and the error was not resolved until September 5, 2023. The
agency officials stated, once the error was resolved, the SWA was able to file
ETA-required reports.

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Mississippi
Mississippi officials stated the SWA’s IT system was not programmed to report
FPUC fraudulent overpayments until July 2020. For PUA fraudulent
overpayments, April 2020 marked the beginning of the PUA program
implementation. We did not identify Mississippi’s reporting of zero PUA
fraudulent overpayments in April 2020 as an exception because fraudulent
overpayments are reported in the month detected rather than in the month the
payments are made. Therefore, any PUA benefits paid in April 2020 would have
been established and reported as fraudulent overpayments in later months.
New Mexico
New Mexico officials stated IT system limitations prevented its fraudulent
overpayment reporting functions. According to New Mexico SWA officials, the
reporting functionality was not implemented until late June or early July 2020.
Vermont
Vermont officials stated IT system limitations prevented reporting functions.
According to Vermont SWA officials, the reporting functionality is being
developed and they anticipate completion by the end of June 2025.
Wisconsin
Wisconsin reported zero PUA fraudulent overpayments because, according to
SWA officials, the reporting change instructions in UIPL No. 16-20, Change 6,
required SWAs to segregate identity fraud overpayments from other fraudulent
overpayments on the ETA 902P reports. Wisconsin SWA officials stated the
reporting change required restatement of PUA fraudulent overpayments in the
SWA’s IT system, which was completed on June 28, 2024. Wisconsin officials
stated the SWA reported zero PEUC fraudulent overpayments because the SWA
did not implement PEUC until late in the quarter ending June 30, 2020.
State Finality Laws May Restrict SWAs’ Ability to Establish and Report
Overpayments
The 10 SWAs reviewed were taking ongoing corrective actions to comply with
fraudulent overpayment reporting requirements. However, many states have
unemployment compensation laws, or finality laws, that limit the length of time
during which they may reconsider a prior determination on a regular UI claim,
thus establishing and reporting overpayments. In December 2023, ETA issued

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UIPL No. 05-24,32 which authorized SWAs to apply state finality laws to CARES
Act-funded UI benefits.

We are concerned that, by applying state finality laws to the pandemic-funded UI
claims, states will not have an incentive to identify overpayments and fraud. The
states already have backlogs of UI claims to review for establishment and
reporting of fraudulent overpayments. If the period for reconsideration of those
claims in the state’s finality law has elapsed, the SWA may no longer review the
claim to determine if the disbursement was proper or an overpayment, including
a fraudulent overpayment, was made.
CONCLUSION
The OIG has estimated at least $191 billion (22 percent) of $888 billion in
pandemic UI benefits could have been paid improperly, with a significant portion
attributable to fraud. We acknowledge ETA demonstrated a responsibility toward
improving UI program integrity by: (1) transmitting the OIG’s list of potentially
fraudulent claimants33 to states, along with instructions and specific requirements
for conducting investigations and due process and (2) developing a UI Fraud
Risk Profile based on risks reported by the OIG and recommendations made by
GAO.

While these actions served to guard against fraud in the UI program, SWAs could
benefit from more direction and assistance from ETA to identify and address
suspected fraudulent activity. This is even more critical when federal funds are at
stake—such as with the key UI programs authorized by the CARES Act that
provided an unprecedented level of funding and thus created an increased risk of
UI program fraud and abuse. ETA needs to take a leading role in collecting UI
claimant data from states, performing risk assessments, and identifying high-risk
areas. This would allow the agency to be better positioned to effectively assist
states with developing response activities to address ever-evolving fraud risks
that threaten the integrity of the UI program.

32 UIPL No. 05-24, Application of State Finality Laws Regarding Temporary Unemployment
Compensation (UC) Programs under the Coronavirus Aid, Relief, and Economic Security
(CARES) Act (December 29, 2023)
33 Potentially fraudulent claimants refers to the SSNs associated with potentially fraudulent
UI claims.

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RECOMMENDATIONS
We did not make any new recommendations in this report. To address the issues
identified in this report and improve ETA’s oversight of states’ efforts to identify
fraudulent UI claims, another OIG contractor (Regis & Associates, PC) made
Recommendations 1 and 3 to ETA in the series’ first report, titled
COVID-19: ETA Needs to Improve Its Oversight of States’ Efforts to Identify
Multistate UI Fraud.34
Analysis of ETA’s Comments
In response to the draft of this report, ETA expressed concerns regarding our
report’s finding. We carefully reviewed ETA’s response in full. Our report was
accurate as stated; thus, while we made minor clarifying edits to the final report,
the agency’s response did not result in any material changes to our reported
results or conclusions. Synopses of ETA’s key comments on our finding along
with our corresponding responses follow:

• ETA stated the draft report inaccurately conveyed that, because ETA did
not require the SWAs to report the outcome of every investigation
regarding each individual claimant contained in the OIG’s claimant data,
ETA did not generally assess performance regarding UI eligibility
determinations. ETA stated it conducted extensive monitoring of states’
administration and operation of UI programs as part of its oversight
responsibilities. ETA also stated it has established program performance
measures to assess the timeliness and quality of SWAs’ adjudications of
UI claims. Specifically, ETA stated it analyzed states’ aggregate data on
the timeliness and quality of UI eligibility determinations and oversaw
quality reviews of adjudication determinations.

ETA disagreed with the draft report’s assertion that ETA’s decision not to
monitor the results of SWAs’ research and investigations of the referred
potentially fraudulent claims was inconsistent with its collaborative position
expressed to the OIG. ETA asserted it never discussed with the OIG nor
committed to following up with each SWA on their investigations of every
claim included in the OIG’s claimant data, as this was not ETA’s intent.

Further, ETA stated it had limited statutory authority to require states to
use certain fraud prevention tools such as IDH, but would continue to

34 COVID-19: ETA Needs to Improve Its Oversight Of States’ Efforts to Identify Multistate UI
Fraud, Report No. 19-25-004-03-315 (August 4, 2025), available at:
https://www.oig.dol.gov/public/reports/oa/2025/19-25-004-03-315.pdf

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explore additional opportunities, including, but not limited to, seeking
Congressional action. ETA requested OIG’s ongoing support in this
endeavor and welcomed more discussions with the OIG regarding specific
strategies and actions to strengthen the UI system and further bolster
fraud prevention in the program.
o
We disagree that the draft report concluded ETA did not assess
performance regarding UI eligibility determinations. In the draft
report, we stated that, without knowledge of the states’ investigative
results, ETA’s ability to assess UI program performance is
impaired. Further, in ETA’s transmission of the OIG’s claimant data
to the states, it informed the SWAs that it was committed to working
with states to combat the sophisticated imposter fraud impacting
the UI system. The transmission of claimant data with investigative
instructions alone was insufficient. ETA’s monitoring of the SWAs’
investigative results was necessary to confirm the extent to which
fraud existed in the high-risk areas identified by the OIG.
The agency’s response to the draft report is included in its entirety in Appendix B.
We appreciate the cooperation and courtesies ETA extended to us during this
audit.
Beatrice Key
Key & Associates, P.C.
Silver Spring, MD
August 15, 2025

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EXHIBIT: TESTING RESULTS, FRAUDULENT AND
NONFRAUDULENT PAYMENTS FOR THE 10 SWAS
Table 1: Fraudulent and Nonfraudulent Payment Breakdown of Claimants
Using Deceased Persons’ SSNs for the 10 SWAs
State
Total
Claimants
Sampled
Total
Benefit
Payments
Number of
Nonfraudulent
Claimants35
Nonfraudulent
Amounts Paid
Number of
Fraudulent
Claimants36
Fraudulent
Amounts
Paid
Alaska
10
$43,339
3
$43,339
7
$0
Indiana
13
$30,697
1
$4,643
12
$26,054
Kentucky
10
$8,856
0
$0
10
$8,856
Louisiana
53
$142,953
5
$75,209
48
$67,744
Michigan
49
$143,324
1
$21,174
48
$122,150
Mississippi
10
$50,410
1
$2,824
9
$47,586
Missouri
10
$38,962
6
$38,962
4
$0
New
Mexico
10
$14,763
0
$0
10
$14,763
Vermont
10
$56,357
6
$40,824
4
$15,533
Wisconsin
10
$57,121
5
$57,121
5
$0
Totals
185
$586,782
28
$284,096
157
$302,686
Source: Key analysis based on SWAs’ responses to questionnaires
35 Nonfraudulent claimants refers to the sampled SSNs that the SWAs determined were not
associated with fraudulent UI claims.
36 Fraudulent claimants refers to the sampled SSNs that the SWAs determined were associated
with fraudulent UI claims.

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Table 2: Fraudulent Payment Breakdown of Deceased Claimants and Other
Fraudulent Reasons37 for the 10 SWAs

State
Number of
Fraudulent
Claimants38
Fraudulent
Amounts
Paid
Number of
Deceased
Claimants
Total Paid to
Deceased
Claimants
Number of
Claimants
with Other
Reasons
Total Paid to
Claimants
with Other
Reasons
Alaska
7
$0
0
$0
7
$0
Indiana
12
$26,054
4
$26,054
8
$0
Kentucky
10
$8,856
0
$0
10
$8,856
Louisiana
48
$67,744
8
$28,944
40
$38,800
Michigan
48
$122,150
10
$75,950
38
$46,200
Mississippi
9
$47,586
0
$0
9
$47,586
Missouri
4
$0
2
$0
2
$0
New
Mexico
10
$14,763
7
$0
3
$14,763
Vermont
4
$15,533
0
$0
4
$15,533
Wisconsin
5
$0
4
$0
1
$0
Totals
157
$302,686
35
$130,948
122
$171,738
Source: Key analysis based on SWAs’ responses to questionnaires

37 Other fraudulent reasons include identity fraud and bank account fraud.
38 Fraudulent claimants refers to the sampled SSN that the SWAs determined were associated
with fraudulent UI claims.

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APPENDIX A: SCOPE AND METHODOLOGY
Scope
The audit covered the actions taken by ETA and SWAs from April 7, 2021,
through September 15, 2022, to address OIG-identified, potentially fraudulent
CARES Act UI claims filed from March 2020 through October 2020 using
deceased persons’ SSNs. To ensure currency and relevance, we also reviewed
updated ETA guidance and UI payment reporting activities that extended outside
of the audit period.
Methodology
We conducted this performance audit in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objective.
We believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.

We obtained and reviewed the CARES Act and SWAs’ policies and procedures
related to the UI claims process, establishment and recovery of overpayments,
and identification of fraudulent or nonfraudulent payments. We submitted process
review and internal control questionnaires to the 10 SWAs to gain an
understanding of the SWAs’ internal control tools used to investigate potentially
fraudulent claimants. We also conducted walkthroughs to gain a better
understanding of SWAs’ internal controls considered significant to the audit
objective.

Additionally, we obtained and reviewed ETA’s UIPLs and guidance provided to
the states on investigations of the potentially fraudulent claims filed using
deceased persons’ SSNs that the OIG identified. Furthermore, we submitted
detailed testing questionnaires to the 10 SWAs for each of the selected 185 UI
claimants. We used the questionnaires to determine the SWAs’ actions to
address the OIG-identified, potentially fraudulent CARES Act UI claims filed
using deceased persons’ SSNs. Based on each SWA’s response, we
categorized the claims as having been determined by the state to be either
fraudulent or nonfraudulent. We also separated fraudulent claims attributable to
the claimants who filed using deceased persons’ SSNs from fraudulent claims for
other reasons.

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Selection of SWAs
We conducted an in-depth examination of 10 OIG-selected SWAs—Alaska,
Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, New Mexico,
Vermont, and Wisconsin. The OIG selected this sample based on the highest per
capita benefits paid. The OIG calculated per capita benefits using the number of
claimants flagged for filing claims using deceased persons’ SSNs and the benefit
amounts paid against these claims. The OIG then ranked the SWAs by the per
capita amount, largest to smallest, and selected the top 10 SWAs. The OIG also
controlled for repetition of SWAs within other high-risk areas. Therefore, the OIG
did not select the same SWAs if they appeared in a higher-ranked risk area,
resulting in the selection of 10 different SWAs for each of the four high-risk
audits. The OIG ranked the high-risk areas from highest to lowest: multistate
claimants, deceased persons’ SSNs, suspicious email accounts, and federal
prisoners’ SSNs. In addition, we surveyed the remaining 43 SWAs and Guam39
to obtain information on processes related to investigating and reporting results
of the fraudulent UI claims filed using deceased persons’ SSNs.
Data Reliability
We conducted tests to determine the reliability of UI claimant data provided by
the SWA related to UI claims filed using deceased persons’ SSNs. To assess the
reliability of the data, we performed procedures to test for completeness,
accuracy, consistency, and validity. This included corroborating the claimant data
against the SWAs’ UI systems records, including evidence of payment and other
evidence provided by the SWAs. The supporting evidence was used to confirm
whether the claims were paid, the determination made on whether a claim was
fraudulent or nonfraudulent, and the status of any ongoing fraud investigation, et
cetera.

We also provided the SWAs with questionnaires to provide responses related to
each of the selected claimants. We then reviewed the responses to ensure they
were consistent with the supporting documentation. When necessary, we held
meetings and requested additional documentation to substantiate the validity of
the claimant data and responses provided.
Internal Controls
We obtained an understanding of internal controls considered significant to the
audit objective when testing compliance with significant laws, regulations, and
other requirements. We confirmed our understanding of these controls through
reviews of policies and procedures, interviews, and analyses of documentation.
Our consideration of internal controls for SWAs to address the risks associated

39 We sent out surveys to 43 SWAs and Guam. We excluded the 10 SWAs subject to in-depth
examination. Of the 43 SWAs and Guam surveyed, 28 SWAs (64 percent) responded.

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with fraudulent claims filed using deceased persons’ SSNs would not necessarily
disclose all matters that might be reportable conditions.
Sampling
We used sampling in this audit to evaluate ETA’s and SWAs’ efforts to address
potentially fraudulent UI claims filed using deceased persons’ SSNs. We
extracted a random stratified sample of claimants from the selected SWAs to
determine whether corrective actions were taken. We determined the sample
size using statistical sampling that factored a desired precision of 5 percent, a
confidence level of 95 percent, and an expected error rate of 10 percent to select
sample claimants from the population. Per statistical sample size standards, we
used 10 as the sample size for states with a calculated sample size less than 10.
Criteria
• Coronavirus Aid, Relief, and Economic Security Act,
Public Law 116-136 (March 27, 2020)
• Continued Assistance for Unemployed Workers Act of 2020,
Subchapter VI, Section 261, Mixed Earner Unemployment Compensation
(December 27, 2020)
• American Rescue Plan Act of 2021, including Title IX, Subtitle A, Crisis
Support for Unemployed Workers, Public Law 117-2 (March 11, 2021)
• GAO-14-704G, Standards for Internal Control in the Federal Government
(September 2014)
• GAO-15-593SP, A Framework for Managing Fraud Risks in Federal
Programs, (July 2015)
• GAO-22-105051, COVID-19: Additional Actions Needed to Improve
Accountability and Program Effectiveness of Federal Response
(October 27, 2021)
• UIPL No. 15-20, Coronavirus Aid, Relief, and Economic Security (CARES)
Act of 2020—Federal Pandemic Unemployment Compensation (FPUC)
Program Operating, Financial, and Reporting Instructions (April 4, 2020)
•
UIPL No. 16-20, Coronavirus Aid, Relief, and Economic Security (CARES)
Act of 2020—Pandemic Unemployment Assistance (PUA) Program
Operating, Financial, and Reporting Instructions (April 5, 2020)
• UIPL No. 17-20, Coronavirus Aid, Relief, and Economic Security (CARES)
Act of 2020—Pandemic Emergency Unemployment Compensation
(PEUC) Program Operating, Financial, and Reporting Instructions
(April 10, 2020)

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•
UIPL No. 23-20, Program Integrity for the Unemployment Insurance (UI)
Program and the UI Programs Authorized by the Coronavirus Aid, Relief,
and Economic Security (CARES) Act of 2020 - Federal Pandemic
Unemployment Compensation (FPUC), Pandemic Unemployment
Assistance (PUA), and Pandemic Emergency Unemployment
Compensation (PEUC) Programs (May 11, 2020))
•
UIPL No. 05-24, Application of State Finality Laws Regarding Temporary
Unemployment Compensation (UC) Programs under the Coronavirus Aid,
Relief, and Economic Security (CARES) Act (December 29, 2023)
•
Training and Employment Notice No. 28-23, Announcement of a New
Data Sharing Partnership Between the U.S. Department of Treasury’s
(Treasury) Bureau of the Fiscal Service (Fiscal Service) and the National
Association of State Workforce Agencies’ (NASWA) Unemployment
Insurance (UI) Integrity Center to provide State UI Agencies Access to Do
Not Pay Working System (DNP) Data Sources and Services through the
UI Integrity Data Hub (IDH) (May 2, 2024)
•
Training and Employment Notice No. 32-23, Unemployment Insurance
(UI) Fraud Risk Management Resources (June 27, 2024)
Prior Relevant Coverage
During the last 4 years, the OIG has issued 9 reports of significant relevance to
the subject of this report, as follows:
1. Alert Memorandum: The Employment and Training Administration Needs
to Ensure State Workforce Agencies Implement Effective Unemployment
Insurance Program Fraud Controls for High-Risk Areas,
Report No. 19-21-002-03-315 (February 22, 2021), available at:
https://www.oig.dol.gov/public/reports/oa/2021/19-21-002-03-315.pdf;
2. COVID-19: States Struggled to Implement CARES Act Unemployment
Insurance Programs, Report No. 19-21-004-03-315 (May 28, 2021),
available at:
https://www.oig.dol.gov/public/reports/oa/2021/19-21-004-03-315.pdf;
3. Alert Memorandum: The Employment and Training Administration Needs
to Issue Guidance to Ensure State Workforce Agencies Provide
Requested Unemployment Insurance Data to the Office of Inspector
General, Report No. 19-21-005-03-315 (June 16, 2021), available at:
https://www.oig.dol.gov/public/reports/oa/2021/19-21-005-03-315.pdf;
4. Alert Memorandum: The Employment and Training Administration Needs
to Ensure States Workforce Agencies Report Activities Related to CARES
Act Unemployment Insurance Programs,

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Report No. 19-22-004-03-315 (August 2, 2022), available at:
https://www.oig.dol.gov/public/reports/oa/2022/19-22-004-03-315.pdf;
5. Alert Memorandum: Potentially Fraudulent Unemployment Insurance
Payments in High-Risk Areas Increased to $45.6 Billion,
Report No. 19-22-005-03-315 (September 21, 2022), available at
https:///www.oig.dol.gov/public/reports/oa/2022/19-22-005-03-315.pdf;
6. COVID-19: ETA and States Did Not Protect Pandemic-Related UI Funds
from Improper Payments Including Fraud or from Payment Delays,
Report No. 19-22-006-03-315 (September 30, 2022), available at:
https://www.oig.dol.gov/public/reports/oa/2022/19-22-006-03-315.pdf;
7. COVID-19 – ETA Can Improve its Oversight to Ensure Integrity over
CARES Act UI Programs,
Report No. 19-23-011-03-315 (September 22, 2023), available at:
https://www.oig.dol.gov/public/reports/oa/2023/19-23-011-03-315.pdf;
8. Alert Memorandum: ETA Needs to Incorporate Data Analytics Capability
to Improve Oversight of the Unemployment Insurance Program,
Report No. 19-23-012-03-315 (September 25, 2023), available at:
https://www.oig.dol.gov/public/reports/oa/2023/19-23-012-03-315.pdf; and
9. COVID-19: ETA Needs to Improve Its Oversight Of States’ Efforts to
Identify Multistate UI Fraud, Report No. 19-25-004-03-315
(August 4, 2025), available at:
https://www.oig.dol.gov/public/reports/oa/2025/19-25-004-03-315.pdf.

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APPENDIX B: AGENCY’S RESPONSE TO THE REPORT
The agency’s response to the draft report follows.

U.S. Department of Labor
Employment and Training Administration
200 Constitution Avenue, N.W.
Washington, D.C. 20210
MEMORANDUM FOR:
LAURA B. NICOLOSI
Assistant Inspector General for Audit
FROM:
LORI FRAZIER BEARDEN
Acting Assistant Secretary for Employment and Training
SUBJECT:
Response to Draft Report – COVID-19: ETA Needs to Improve Its
Oversight of States’ Efforts to Identify UI Fraud Using Deceased
Persons’ Social Security Numbers, Report No. 19-25-XXX-03-315
The U.S. Department of Labor’s (Department) Employment and Training Administration (ETA)
appreciates the opportunity to respond to the above-referenced draft report.
This draft report examined the extent to which ETA and State Workforce Agencies (SWA)
addressed potentially fraudulent Coronavirus Aid, Relief, and Economic Security Act claims filed
using the Social Security Numbers (SSN) of deceased persons. The draft report does not make
any new recommendations.
ETA acknowledges that continued work is needed to reduce fraud, waste, and abuse in the
unemployment insurance (UI) program. To this end, ETA has invested in the UI Integrity
Center’s Integrity Data Hub (IDH) and dedicated resources to make significant progress,
incorporating additional data sources and working with the UI Integrity Center and states to re-
evaluate risk scoring investigation prioritization. Most recently, the Department provided funding
to support IDH access and use of the U.S. Department of the Treasury’s Do Not Pay data sources,
enhancing the IDH’s operations and strengthening UI program integrity controls (see Training and
Employment Notices [TEN] No. 28-230F1 and 26-241F2).
ETA would like to clarify a few areas in the draft report:
x
The draft report acknowledges on page 6 that ETA provided the Office of Inspector General
(OIG) files containing potentially fraudulent claims using deceased persons’ SSNs to SWAs.
ETA agreed to share the OIG-analyzed claims data with the states as potential fraud tips for
the SWAs to conduct additional appropriate investigations and actions regarding these
claims. As noted by the OIG, ETA did not require states to report the results of their
1 TEN No. 28-23, Announcement of a New Data Sharing Partnership Between the U.S. Department of the Treasury’s
(Treasury) Bureau of the Fiscal Service (Fiscal Service) and the National Association of State Workforce Agencies’
(NASWA) Unemployment Insurance (UI) Integrity Center to provide State UI Agencies Access to Do Not Pay Working
System (DNP) Data Sources and Services through the UI Integrity Data Hub (IDH), issued May 2, 2024,
https://www.dol.gov/agencies/eta/advisories/ten-28-23.
2 TEN No. 26-24, Announcing the Addition of New Do Not Pay (DNP) Data Sources and Services Accessible to State
Unemployment Insurance (UI) Agencies through the UI Integrity Data Hub (IDH) and Upcoming Webinar, issued
May 20, 2025, https://www.dol.gov/agencies/eta/advisories/ten-26-24.
-XO\

investigations and actions regarding each individual claim contained in the OIG files.
However, the draft report inaccurately conveys that because ETA didn’t require states to
report the outcome of every investigation, ETA does not, in general, assess performance
regarding UI eligibility determinations. ETA has established UI performance measures in
place to assess the timeliness and quality of adjudications made by SWAs. ETA also
conducts extensive monitoring of states’ administration and operation of UI programs as part
of its regular oversight responsibilities. In addition to monitoring, ETA analyzes aggregate
data from states on the timeliness and quality of UI eligibility determinations and oversees
quality reviews of adjudication determinations.

The draft report also asserts on page 10 that ETA’s decision to not monitor the results of
SWAs’ investigations and actions of the referred potentially fraudulent claims was inconsistent
with its collaborative position expressed to the OIG. However, ETA did not discuss, nor
commit to the OIG that it would follow up with each state regarding its investigations/actions
on every potentially fraudulent claim in the OIG files. This was not the intent when ETA
agreed to share the OIG-analyzed claims data with states. When the OIG’s contractor initially
engaged with ETA on this audit in September 2022, it provided that “The scope of the audit
will focus in-depth on actions taken by ETA and 10 selected SWAs to address potentially
fraudulent CARES Act UI claims.” This was further reiterated in a questionnaire sent to states
in December 2022, asking what actions the SWA had taken to address such claims. ETA had
expected that this audit would have explored whether the states had previously identified these
claims as potentially fraudulent and had addressed them, or if such flags from the OIG resulted
in identification of new actual overpayments.

x On page 7, the draft report notes that ETA transmitted information to “53 SWAs and Guam”
and then refers to these collectively as “54 UI agencies.” ETA notes that Guam does not
operate a UI program and is not considered a “UI agency.” Its inclusion in the list of files
transmitted from the OIG is likely in relation to their participation in the now-expired
pandemic-related unemployment compensation programs.

x On page 12, the draft report paraphrases and attributes comments to the Department’s Office
of the Chief Financial Officer (OCFO) on challenges to mitigating risks. ETA discussed these
comments with OCFO. OCFO agrees that “varying state laws that define fraud” is a
recognized structural challenge. However, the statement “SWAs’ inconsistent use of the IDH”
is unclear – the statement would be more accurate if it conveyed, “the 53 different state
governments’ statutory authority to use, or not use, the many services offered through the
Integrity Center and IDH presents numerous challenges.” Additionally, OCFO does not
recognize the statement in the draft report that OCFO identified “irregular reporting of UI
claims data for cross-matching” as a challenge. Whether due to misunderstanding or over
paraphrasing, absent clarification, OCFO has informed ETA that it cannot confirm that this
was stated.

Combating fraud is a high priority for this Administration. As noted on page 16 in the draft report,
ETA has completed an initial study to identify additional opportunities for improving the IDH.
ETA has limited statutory authority to require states’ use of certain fraud prevention tools, such as
the IDH, and will continue efforts to explore additional opportunities, including, but not limited to,
seeking Congressional action.

ETA requests the OIG’s ongoing support to help move things in a positive direction and welcomes
further discussion with the OIG regarding specific strategies and actions to strengthen the UI system
and to further bolster fraud prevention in the program. ETA will also take action to address the
recommendations included in the first report in this series, COVID-19: ETA Needs to Improve Its
Oversight of States’ Efforts to Identify Multistate UI Fraud.

REPORT FRAUD, WASTE, OR ABUSE
TO THE DEPARTMENT OF LABOR

Online
https://www.oig.dol.gov/hotline.htm

Telephone
(800) 347-3756 or (202) 693-6999

Fax
(202) 693-7020

Address
Office of Inspector General
U.S. Department of Labor
200 Constitution Avenue NW
Room S-5506
Washington, DC 20210

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