GAO, Unemployment Insurance: DOL Needs to Address Substantial Pandemic UI Fraud and Reduce Persistent Risks (GAO-23-106586, 2023-09)

Summary

GAO-23-106586, a February 2023 GAO testimony titled Unemployment Insurance: DOL Needs to Address Substantial Pandemic UI Fraud and Reduce Persistent Risks, before the Committee on Ways and Means, House of Representatives. It is the statement of Gene L. Dodaro, Comptroller General of the United States, for release February 8, 2023. GAO states that it estimated over $60 billion in fraudulent UI payments by extrapolating the lower bound of the Department of Labor's 2021 estimated national fraud rate for the regular UI program, and cautions that the extrapolation has inherent limitations. It also reports that GAO added the UI system to its High Risk Program in June 2022 and had 19 open recommendations to DOL as of January 2023.

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“GAO, Unemployment Insurance: DOL Needs to Address Substantial Pandemic UI Fraud and Reduce Persistent Risks (GAO-23-106586, 2023-09).” Original at www.gao.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/gao-unemployment-insurance-dol-needs-to-address-substantial-pandemic-u-ffab5c58d1/, SHA-256 395440efaeec5a9e04e9885775ba511c45df1ce884cb9101cb493b25af89c601.

Full text

United States Government Accountability Office
Testimony
Before the Committee on Ways and
Means, House of Representatives

UNEMPLOYMENT
For Release on Delivery
Expected at 10:00 a.m. ET
Wednesday, February 8, 2023

INSURANCE
DOL Needs to Address
Substantial Pandemic UI
Fraud and Reduce
Persistent Risks
Statement of Gene L. Dodaro
Comptroller General of the United States

GAO-23-106586
February 2023

UNEMPLOYMENT INSURANCE
DOL Needs to Address Substantial Pandemic UI
Fraud and Reduce Persistent Risks
Highlights of GAO-23-106586, a testimony
before the Committee on Ways and Means,
House of Representatives

Why GAO Did This Study What GAO Found
The UI system has faced long-standing GAO found evidence of substantial levels of fraud and potential fraud in
challenges with program integrity, unemployment insurance (UI) during the pandemic. GAO estimated over
which increased dramatically during $60 billion in fraudulent UI payments by extrapolating the lower bound of the
the pandemic. According to DOL data, Department of Labor’s (DOL) 2021 estimated national fraud rate for the regular
expenditures across all UI programs UI program. However, such an extrapolation has inherent limitations and should
totaled approximately $878 billion from be interpreted with caution. GAO is working to develop a more comprehensive
April 2020 through September 2022. estimate on the total extent of UI fraud during the pandemic. The DOL Office of
This included benefits as part of four Inspector General’s UI fraud investigations resulted in over 1,200 indictments or
new UI programs Congress created to
initial charges from April 2020 through January 2023. Each week that office
support workers during the pandemic.
continues to open over 100 new UI fraud-related investigative matters.
The unprecedented demand for
benefits and the need to quickly Illustrative examples of unemployment insurance fraud cases
implement the new programs
increased the risk of financial fraud.
Due to these circumstances and other
challenges, GAO added the UI system
to its High Risk Program in June 2022.
This statement addresses: (1) fraud in
the UI programs, (2) UI fraud risks and
management of such risks,
(3) continued UI improper payment
problems, and (4) the addition of the UI
system to GAO’s High Risk Program.
This statement is based on GAO’s
body of work related to the UI system
during the pandemic. More detailed
information on the objectives, scope, DOL and the states were not adequately prepared to handle UI fraud risks when
and methodology that form the basis of the pandemic began. DOL has taken some recent steps to address UI fraud
the statement can be found in risks. For example, it has provided state workforce agencies with fraud-related
individual reports, which are listed in guidance, integrity tools, and grant funding. DOL, however, has not yet
the full hearing statement. implemented an antifraud strategy as called for by leading practices in GAO’s
Fraud Risk Framework.
What GAO Recommends
The expediting of COVID-19 relief funding exacerbated an underlying improper-
As of January 2023, GAO has 19 open payment problem in the federal government, including UI, which predated the
recommendations to DOL, including pandemic. For example, DOL reported an increase in estimated improper
eight to strengthen its management of payments from $8.0 billion (9.2 percent estimated improper payment rate) for
UI fraud risks. Recommendations fiscal year 2020 to $78.1 billion (18.9 percent estimated improper payment rate)
include considering options to prevent for fiscal year 2021. For fiscal year 2022, DOL reported estimated improper
fraud in programs designed to help
payments of $18.9 billion (22.2 percent estimated improper payment rate).
self-employed and contingent workers,
designating an entity to manage fraud In June 2022, GAO added the UI system to its High Risk Program based on the
risks, performing fraud-risk system’s need for transformation. The system’s administrative and program
assessments, and developing and integrity challenges pose significant risks to service delivery and expose the
implementing an antifraud strategy. system to significant financial losses. Long-standing challenges with UI
administration and outdated IT systems have further affected states’ ability to
View GAO-23-106586. For more information,
contact Seto Bagdoyan at (202) 512-6722 or meet the needs of unemployed workers, especially during economic downturns.
bagdoyans@gao.gov or Jared B. Smith at Such challenges have also contributed to impaired service, declining access, and
(202) 512-2700 or smithjb@gao.gov. disparities in benefit distribution.

United States Government Accountability Office
Letter Letter

Chairman Smith, Ranking Member Neal, and Members of the Committee:

I appreciate the opportunity to discuss our work on fraud risks in the
Department of Labor’s (DOL) unemployment insurance (UI) programs
during the COVID-19 pandemic. The UI system, which is jointly
administered with states, has faced long-standing challenges with
effective service delivery and program integrity. These challenges
increased dramatically during the pandemic because of historic levels of
job losses, among other factors. The CARES Act created three federally
funded temporary programs that expanded UI benefit eligibility, enhanced
benefits, and extended benefit duration. 1 These programs were:

1. Pandemic Unemployment Assistance (PUA) authorized UI benefits for
individuals not otherwise eligible for UI benefits, such as self-
employed and certain gig economy workers, who were unable to work
because of specified COVID-19-related reasons. 2
2. Federal Pandemic Unemployment Compensation (FPUC) generally
authorized an additional weekly benefit for individuals who were

1In this testimony, we refer to the UI program—excluding the temporary UI programs
created by the CARES Act and other legislation—as the regular UI program and the
benefits paid under the program as regular UI benefits. We refer to the temporary UI
programs created by the CARES Act and the Consolidated Appropriations Act, 2021, as
pandemic UI programs. CARES Act, Pub. L. No. 116-136, 134 Stat. 281 (2020) and
Consolidated Appropriations Act, 2021 Pub. L. No. 116-260, div. M and N, 134 Stat. 1182
(2020).
2At the time of the program’s expiration in September 2021, PUA generally authorized up
to 79 weeks of benefits. Pub. L. No. 117-2, § 9011(a), (b), 135 Stat. 4, 118; Pub. L. No.
116-260, div. N, tit. II, § 201(a), (b), 134 Stat. 1182, 1950-1951 (2020); Pub. L. No. 116-
136, § 2102, 134 Stat. 281, 313 (2020).

Page 1 GAO-23-106586
eligible for weekly benefits under the permanent UI programs—e.g.,
regular UI—and the temporary CARES Act UI programs. 3
3. Pandemic Emergency Unemployment Compensation (PEUC)
generally authorized additional weeks of UI benefits for those who had
exhausted their regular UI benefits. 4
In addition, the Consolidated Appropriations Act, enacted in December
2021, created the Mixed Earner Unemployment Compensation (MEUC)
program, which was extended by the American Rescue Plan Act of
2021. 5 According to DOL, the MEUC program was intended to cover
regular UI claimants whose benefits do not account for significant self-
employment income and who thus may have received a lower regular UI
benefit than they would have received had they been eligible for PUA.

Timely payments allowed unemployed workers to address financial
hardships such as inability to pay for rent, utilities, and groceries. As we
found in June 2022, 30 empirical studies we reviewed showed the effect
of UI program expansions during adverse times, such as the 2007-2009

3FPUC generally authorized an additional $600 benefit through July 2020 as well as an
additional $300 benefit for weeks beginning after December 26, 2020, through the end of
the program in September 2021. Pub. L. No. 117-2, § 9013, 135 Stat. 4, 119; Pub. L. No.
116-260, div. N, tit. II, § 203, 134 Stat. 1182, 1953; Pub. L. No. 116-136, § 2104, 134 Stat.
281, 318. In addition, on August 8, 2020, the President signed a memorandum directing
the Department of Homeland Security’s Federal Emergency Management Agency (FEMA)
to provide up to $44 billion in lost wages assistance. Pursuant to the presidential
memorandum, upon receiving a FEMA grant, states and territories could provide eligible
claimants $300 or $400 per week—which included a $300 federal contribution—in addition
to their UI benefits. The White House, Memorandum on Authorizing the Other Needs
Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019
(Aug. 8, 2020). FEMA approved 53 states and territories to provide lost wages assistance
to eligible claimants for a maximum of 6 weeks of unemployment experienced from the
week ending on August 1, 2020, through the week ending on September 5, 2020.
4At the time of the program’s expiration in September 2021, PEUC generally authorized
an additional 53 weeks of benefits for claimants who were fully unemployed. Pub. L. No.
117-2, § 9016(a), (b), 135 Stat. 4, 119-120; Pub. L. No. 116-260, div. N, tit. II, § 206(a),
(b), 134 Stat. 1182, 1954; Pub. L. No. 116-136, § 2107, 134 Stat. 281, 323.
5The MEUC program, which was voluntary for states, authorized an additional $100
weekly benefit for certain UI claimants who received at least $5,000 of self-employment
income in the most recent tax year prior to their application for UI benefits. The $100
weekly benefit was in addition to other UI benefits received by claimants; however,
individuals receiving PUA benefits could not receive MEUC payments. The MEUC
program expired in September 2021. Pub. L. No. 117-2, § 9013(a), 135 Stat. 4, 119; Pub.
L. No. 116-260, div. N, tit. II, § 261(a)(1), 134 Stat. 1182, 1961.

Page 2 GAO-23-106586
recession and the COVID-19 pandemic. 6 The expansions specifically
helped to stabilize the economy, prevented detrimental outcomes from
worsening, and had a limited effect on workers’ incentives to return to
work. Some of the studies we reviewed also showed that UI expansion
had other positive benefits such as an improved labor market.

However, the unprecedented demand for UI benefits and the
programmatic flexibilities allowed during the pandemic also increased the
risk of financial fraud as well as other improper payments. 7 From April
2020 through September 2022, expenditures across the UI system
totaled approximately $878 billion, according to DOL data. 8 Most of these
funds went to the intended recipients in the intended amounts, providing
needed assistance. In other instances, funds were paid improperly,
including benefits going to those who sought to defraud the UI program.

In December 2022, we estimated over $60 billion in fraudulent UI
payments were dispensed to applicants by extrapolating the lower bound
of DOL’s 2021 estimated national fraud rate for the regular UI program. 9
However, such an extrapolation has inherent limitations and should be
interpreted with caution. One of the many challenges in determining the
full extent of fraud is its deceptive nature. Programs can incur financial
losses related to fraud that are never identified and such losses are
difficult to reliably estimate. In ongoing work, we are seeking to calculate

6GAO, Unemployment Insurance: Pandemic Programs Posed Challenges, and DOL
Could Better Address Customer Service and Emergency Planning, GAO-22-104251
(Washington, D.C.: June 7, 2022).
7The Payment Integrity Information Act of 2019 defines an improper payment as any
payment that should not have been made or was made in an incorrect amount (including
overpayments and underpayments) under statutory, contractual, administrative, or other
legally applicable requirements. 31 U.S.C. § 3351(4). As such, improper payments refer to
all kinds of erroneous payments, including but not limited to those resulting from fraud.
Fraud involves obtaining something of value through willful misrepresentation. All
payments made as a result of fraudulent activities are considered to be improper
payments. Improper payments could suggest that a program may be vulnerable to fraud.
However, improper payments amounts are not a valid indicator of the extent of fraud in a
particular program.
8This amount includes about $209 billion in expenditures under the regular and Expanded
Benefits programs and about $669 billion in expenditures under the pandemic relief
programs that expired on September 6, 2021.
9GAO, Unemployment Insurance: Data Indicate Substantial Levels of Fraud during the
Pandemic; DOL Should Implement an Antifraud Strategy, GAO-23-105523, (Washington,
D.C.: Dec. 22, 2022).

Page 3 GAO-23-106586
a comprehensive estimate of UI fraud and are exploring ways to estimate
the amount of fraud more broadly across the federal government.

The increased significance of the UI system during the pandemic
highlights its vulnerabilities and susceptibility to improper payments,
fraud, waste, abuse, and mismanagement. In an out-of-cycle action, we
added the UI system to GAO’s High Risk Program in June 2022. 10 We did
so based on findings from the DOL Office of Inspector General (OIG) and
our prior work, as well as the urgent need to address persistent issues in
the UI system—including funding uncertainties and outdated IT systems.
This designation is intended to help spur sustained progress in resolving
persistent issues by shining a spotlight on such deficiencies and ways the
federal government can lead efforts to find solutions.

My comments today address our body of work on the UI programs.
Specifically, I will discuss

1. Fraud in the UI programs,
2. UI fraud risks and the management of such risks,
3. Continued problems with UI improper payments, and
4. The addition of the UI system to GAO’s High Risk Program.

We conducted the work on which this statement is based in accordance
with generally accepted government auditing standards. More detailed
information on the objectives, scope, and methodology that this statement
is based on can be found in the individual reports from which we obtained
this information. See appendix I for a list of related reports.

10GAO, Unemployment Insurance: Transformation Needed to Address Program Design,
Infrastructure, and Integrity Risks, GAO-22-105162 (Washington, D.C.: June 7, 2022). The
High Risk Program highlights federal programs and operations that we have determined
are in need of transformation. It also names federal programs and operations that are
vulnerable to waste, fraud, abuse, and mismanagement. We release a High Risk series
report every two years at the start of each new Congress. As in this case, we sometimes
make out-of-cycle designations to highlight urgent issues, help ensure focused attention,
and maximize the opportunity for the federal government to take action.

Page 4 GAO-23-106586
Existing sources highlight the substantial nature of UI fraud during the
Federal and State pandemic but do not reliably indicate the full extent of fraud. Multiple state
Measures and and federal entities have reported on the elevated risks associated with
UI during the pandemic. For example:
Estimates Indicate
Substantial Fraud and • In October 2021, we reported that fraudulent and potentially
fraudulent activity increased substantially after implementation of the
Potential Fraud in UI pandemic UI programs, relative to the amount of such activity in the
Programs during the regular UI program before the pandemic. 11

Pandemic but Do Not • In its fiscal year 2020 Agency Financial Report, DOL acknowledged
an increase in potentially fraudulent activity related to organized fraud
Fully Reflect the schemes targeting the pandemic UI programs. 12
Extent of Fraud • According to National Association of State Workforce Agencies
officials, the UI system faced unrelenting attacks by foreign organized
crime groups during the pandemic. 13
• In a March 2021 press release, the U.S. Secret Service noted that its
early investigation and analysis indicated that international organized
criminal groups have targeted UI funds using stolen identities to file
for UI benefits.
The risk of fraud was especially high in the PUA program. 14 The CARES
Act created the PUA program and initially allowed applicants to self-certify
their eligibility and did not require them to provide any documentation of
self-employment or prior income. In addition, the expanded coverage
offered under the PUA program posed significant challenges to states as
they implemented processes to determine initial and continued program
eligibility for participants. As we have previously reported, relying on

11GAO, COVID-19: Additional Actions Needed to Improve Accountability and Program
Effectiveness of Federal Response, GAO-22-105051 (Washington, D.C.: Oct. 27, 2021).
12Department of Labor, Agency Financial Report Fiscal Year 2020 (Washington, D.C.:
Nov. 16, 2020).
13The National Association of State Workforce Agencies represents all 50 state workforce
agencies, the District of Columbia, and U.S. territories.
14PUA expanded unemployment benefit eligibility to traditionally ineligible workers,
including self-employed and certain contingent workers. In June 2022, we recommended,
among other things, that DOL consider options for fraud prevention when studying and
advising Congress and policy makers on options for supporting self-employed and
contingent workers during the period of involuntary unemployment. DOL agreed with the
recommendation. GAO, Pandemic Unemployment Assistance: Federal Program
Supported Contingent Workers amid Historic Demand, but DOL Should Examine Racial
Disparities in Benefit Receipt, GAO-22-104438 (Washington, D.C.: June 7, 2022).

Page 5 GAO-23-106586
program participants to self-report and self-certify information on agency
forms, instead of verifying such information independently, could cause
an agency to miss opportunities to prevent program fraud and abuse. 15
To help address this risk, the Consolidated Appropriations Act of 2021
included a requirement for individuals to submit documentation of
employment or self-employment when applying for the PUA program. 16

According to DOL OIG officials, since the pandemic started, it has seen
an increase of more than 1,000 times in the volume of its UI work
involving complaints and investigations. For instance, from April 1, 2020,
through January 10, 2023, DOL OIG opened over 198,000 investigative
matters involving UI. 17 The DOL OIG continues to open about 100 to 300
new UI fraud-related matters each week. From April 1, 2020, through
January 10, 2023, DOL OIG UI fraud investigations resulted in over
1,239 indictments or initial charges, according to DOL OIG officials. In
addition, according to these officials, their investigations and investigative
assistance to state workforce agencies has produced $905 million in
seizures, court-ordered restitutions, and other UI fraud monetary results. 18

Through our review of DOL OIG reports, state audits, and Department of
Justice (DOJ) cases, we previously identified several fraud risks in the UI
programs and identified factors contributing to fraud risk. 19 Specifically,
we identified several fraud cases that relied on a variety of mechanisms,
which illustrate some of the fraud risks in pandemic UI programs
including:

15GAO-22-105051.

16The Consolidated Appropriations Act, 2021, extended the PUA program and included a
requirement that all PUA claimants must submit documentation substantiating
employment, self-employment, or the planned commencement of employment or self-
employment. Pub. L. No. 116-260, div. N, tit. II, § 241(a), 134 Stat, 1182, 1959-60.
17The DOL OIG categorizes all investigative matters as either a complaint or an
investigation. Complaints include those received through the DOL OIG’s hotline or the
Department of Justice’s National Center for Disaster Fraud. Complaints require further
review before determining if the DOL OIG will open an investigation. An investigation is
something that, if proven, the DOL OIG anticipates will result in some type of criminal,
civil, or administrative outcome.
18According to the DOL OIG, these include, but are not limited to, funds seized through
forfeiture from bank accounts used to receive illicit proceeds of UI fraud, funds
administratively returned to state workforce agencies by financial institutions based on the
DOL OIG’s work, and court-ordered restitution amounts.
19GAO-22-105051.

Page 6 GAO-23-106586
• applicants falsifying information on income or employment eligibility to
receive benefits,
• applicants using stolen identities or personally identifiable information
to apply for benefits or receive benefits,
• applicants applying for, or receiving, benefits by using fake identity
information,
• applicants submitting fraudulent claims or erroneously receiving
benefits in multiple states,
• prison inmates applying for benefits for which they were not eligible,
and
• current or former federal or state or territory employees’ misusing their
positions to fraudulently obtain benefits for themselves or others.
Figure 1 provides four specific examples of UI fraud cases along with the
outcomes of the court adjudications.

Page 7 GAO-23-106586
Figure 1: Examples of Court-Adjudicated Unemployment Insurance Cases during the Pandemic and Related Fraud Risks,
Charges, Sentences, and Restitution Amounts

Page 8 GAO-23-106586
Many individuals have already pleaded guilty to federal charges of
defrauding UI. Based on our analysis of DOJ public statements and court
documentation, we found that from March 2020 through January 13,
2023, at least 380 individuals pleaded guilty to and three individuals were
convicted at trial of federal charges of defrauding UI programs. Of the
380 individuals, at least 40 also pleaded guilty to fraud related to other
pandemic relief programs. 20

The number of individuals or entities facing UI fraud-related charges has
grown since March 2020 and will likely continue to increase, as these
cases take time to develop. 21 Based on our analysis of DOJ public
statements and court documentation through January 13, 2023, federal
charges were pending against at least 240 individuals for attempting to
defraud pandemic UI programs.

Federal and state entities have produced several measures and
estimates of UI fraud during the pandemic that highlight the substantial
fraud and potential fraud in UI programs. While each type of measure and
estimate has strengths and limitations, as described below, none
completely and reliably indicates the extent of fraud in UI programs during
the pandemic.

UI fraud during the pandemic is at least $4.3 billion according to reporting
by states from April 2020 through June 2022. This total is based on the
amount of payments associated with a formal determination of fraud
reported by state workforce agencies. This amount and other similar fraud
measures do not account for potential fraud that has not yet been formally
determined as such. See figure 2.

20Of the individuals or entities who pleaded guilty to or were convicted at trial, at least
291 had been sentenced as of January 13, 2023. This analysis is limited to the DOJ cases
we identified from public sources, which may not include all criminal and civil cases
charged by DOJ as of January 13, 2023. This analysis does not include criminal and civil
cases charged by states.
21Generally, the statute of limitations for mail fraud and wire fraud prosecutions is 5 years
(18 U.S.C. § 3282); however, the statute of limitation for prosecutions of mail and wire
fraud that affect a financial institution is 10 years (18 U.S.C. § 3293).

Page 9 GAO-23-106586
Figure 2: Examples and Definitions of Measures and Estimates

Reporting on potential fraud, DOL OIG found that at least $45 billion in UI
payments from March 2020 through April 2022 had some indication of
fraud in four high risk areas. 22 The risk areas were: (1) multi-state
claimants, (2) Social Security numbers of the deceased, (3) federal
prisoners, and (4) suspicious email accounts. However, some of these
flagged transactions may not be fraudulent and not all fraudulent

22Department of Labor, Office of Inspector General, Alert Memorandum: Potentially
Fraudulent Unemployment Insurance Payments in High Risk Areas Increased to $45.6
Billion, Report No. 19-22-005-03-315 (Washington, D.C.: Sept. 21, 2022).

Page 10 GAO-23-106586
transactions may be flagged. More generally, these types of potential
fraud measures can be used to identify transactions that may be
indicative of potential fraud. They cannot, though, be interpreted directly
as measures of the extent of fraud in the UI programs during the
pandemic.

In addition to fraud and fraud-related measures, estimates can be used to
approximate the extent of fraud and potential fraud beyond what can be
directly counted. No national estimate of UI fraud has been reported that
covers all UI programs for the full period of pandemic spending. However,
DOL has reported an estimated $8.5 billion in fraud for regular UI
payments during the performance year 2021, covering July 1, 2020,
through June 30, 2021. If the lower bound of this fraud rate (7.6 percent)
was extrapolated to total spending across all UI programs during the
wider pandemic period, it would suggest over $60 billion in fraudulent UI
payments. From our review of the available measures and estimates, we
found that the 2021 regular fraud rate served as an approximate lower
limit of the fraud rate for all UI programs and the wider period of pandemic
spending. The actual amount of fraud in UI programs during the
pandemic may be substantially higher than the estimated $60 billion lower
limit. 23

DOL OIG relied on a similar approach when it reported an estimated
$163 billion in pandemic UI payments could have been paid improperly
and noted that a significant portion of this total may be attributable to
fraud. To complete its improper payment calculation, DOL OIG multiplied
DOL’s estimated improper payment rate for the regular UI program to all
of the pandemic spending. 24

Both the DOL OIG estimate of improper payments and our $60 billion
estimate of fraud treat the higher risk PUA program claims as having the
same improper payment and fraud rates as the regular UI claims.
Therefore, the actual improper payment and fraud totals are likely
substantially higher than the estimates reported here. DOL has started an
effort to create a national estimate of the improper payment rate for the

23Extrapolation is a technique that can offer a rough or notional estimate of fraud or
potential fraud even if data on a specific measure or rate are unavailable but may have
limitations related to validity, accuracy, and completeness.
24U.S. Department of Labor Office of Inspector General, Testimony before the U.S.
Senate Committee on Homeland Security and Governmental Affairs, Pandemic Response
and Accountability: Reducing Fraud and Expanding Access to COVID-19 Relief through
Effective Oversight, Number 19-22-003-03-315, March 17, 2022.

Page 11 GAO-23-106586
PUA program. According to DOL, the outcomes are expected in fiscal
year 2023.

The national estimation efforts coordinated by DOL allow for the
meaningful combination of state-level estimates. States have also
produced separate reviews of their own UI programs, and these reviews
have sometimes included individual state estimates. The Pandemic
Response Accountability Committee has tracked such estimates and
found that 21 states have reported $58.4 billion in fraud estimates across
pandemic programs. 25 This total should be interpreted with caution since
it does not cover all states and the states it does cover differ in terms of
the approaches used, populations assessed, and time periods covered.

Given the significant uncertainty remaining, we continue to study the
extent of fraud in UI programs during the COVID-19 pandemic. We plan
to develop a more comprehensive estimate, including a lower and upper
range, on the total extent of UI fraud during the COVID-19 pandemic.

25See Pandemic Response Accountability Committee (PRAC), Pandemic Unemployment
Insurance: How much has been paid to fraudsters? (Accessed on February 1, 2023, at
https://www.pandemicoversight.gov/spotlight/unemployment-insurance-fraud). The
CARES Act established the PRAC within the Council of Inspectors General on Integrity
and Efficiency, the oversight and coordination body for the Inspector general community.
Pub. L. No. 116-136, § 15010(b), 134 Stat. 281, 534 (2000). The PRAC is composed of
21 inspectors general.

Page 12 GAO-23-106586
While DOL Faced
Shortcomings in
Addressing Pandemic
Fraud Risks, It Has
Taken Some Steps to
Address Such Risks
but Has Not
Implemented an
Antifraud Strategy
DOL Faced Shortcomings Because of shortcomings in managing risk strategically, including lack of
in Addressing Pandemic appropriate internal controls, DOL and the states were not adequately
prepared to handle UI fraud risks when the pandemic began. In July
Fraud Risks
2015, we issued A Framework for Managing Fraud Risks in Federal
Programs (Fraud Risk Framework). 26 This framework provides a
comprehensive set of key components and leading practices to help
agency managers combat fraud in a strategic, risk-based way. The Fraud
Reduction and Data Analytics Act of 2015 (FRDAA) required the Office of
Management and Budget (OMB) to establish guidelines for federal
agencies to create controls to identify and assess fraud risks and to
design and implement anti-fraud control activities. 27 The act further
required OMB to incorporate the leading practices from the Fraud Risk
Framework in the guidelines. 28 In its 2016 Circular No. A-123 guidelines,
OMB directed agencies to adhere to the Fraud Risk Framework’s leading

26GAO, A Framework for Managing Fraud Risks in Federal Programs, GAO-15-593SP
(Washington, D.C.: July 28, 2015).
27Pub. L. No. 114-186, 130 Stat. 546 (2016).

28The Payment Integrity Information Act of 2019 requires these guidelines to remain in
effect, subject to modification by OMB as necessary and in consultation with GAO. Pub. L.
No. 116-117, § 2a, 134 Stat. 113, 131-132 (2020), codified at 31 U.S.C. § 3357.

Page 13 GAO-23-106586
practices as part of their efforts to effectively design, implement, and
operate an internal control system that addresses fraud risks. 29

As shown in figure 3, the Fraud Risk Framework contains four
components: (1) commit, (2) assess, (3) design and implement, and
(4) evaluate and adapt. Within the four components, there are
overarching concepts and leading practices.

29Office of Management and Budget, Management’s Responsibility for Enterprise Risk
Management and Internal Control, OMB Circular No. A-123 (Washington, D.C. July 15,
2016). In October 2022, OMB issued a Controller Alert, which reminded agencies that
they must establish financial and administrative controls to identify and assess fraud risks.
In addition, OMB reminded agencies that they should adhere to the leading practices in
GAO’s Fraud Risk Management Framework as part of their efforts to effectively design,
implement, and operate an internal control system that addresses fraud risks. OMB, CA-
23-03, Establishing Financial and Administrative Controls to Identify and Assess Fraud
Risk (Oct. 17, 2022).

Page 14 GAO-23-106586
Figure 3: The Four Components of the Fraud Risk Framework and Selected Leading Practices

In response to a 2018 GAO survey of federal agencies regarding their
implementation of the FRDAA, DOL stated that it was moderately familiar
with the Fraud Risk Framework and characterized its planning and
implementation efforts as having started but not mature. 30 Had DOL, in
conjunction with the states, already been strategically managing fraud

30GAO, Fraud Risk Management: OMB Should Improve Guidelines and Working-Group
Efforts to Support Agencies’ Implementation of the Fraud Reduction and Data Analytics
Act, GAO-19-34 (Washington, D.C.: Dec. 4, 2018).

Page 15 GAO-23-106586
risks, it would have been better positioned to identify and respond to the
heightened risks that emerged during the pandemic.

In October 2021, in applying selected leading practices to DOL, we found
that the agency had not implemented key aspects of the Fraud Risk
Framework. 31 Specifically, DOL had not clearly assigned defined
responsibilities to a dedicated entity for designing and overseeing fraud
risk management activities in a strategic manner. DOL also had not
comprehensively assessed UI fraud risks in alignment with leading
practices identified in the Fraud Risk Framework. Such assessments
would provide reasonable assurance that DOL has identified the most
significant fraud risks for the regular UI program that will exist after the
pandemic.

The DOL OIG has similarly reported significant concerns about the ability
of the agency and the state workforce agencies to deploy UI and other
program benefits expeditiously while ensuring adequate oversight due to
staffing and system resource constraints. 32 The DOL OIG further noted
that because many states were not prepared, many internal fraud controls
were not initially implemented when the pandemic began.

DOL Has Taken Some DOL has taken some steps during the pandemic to address fraud risks in
Steps to Address UI Fraud the UI system. Specifically, DOL has provided state workforce agencies
with fraud-related guidance, tools, and funding.
Risks
Guidance: DOL provided states with advisory documents containing
fraud-related information on various topics covering fraud prevention,
detection, and response.
Tools: DOL provided funding for the UI Integrity Center, operated by
the National Association of State Workforce Agencies. The UI Integrity
Center supports state workforce agencies in adopting and
implementing strategies to address fraud in UI programs at no cost to
states.

31GAO-22-105051.

32U.S. Department of Labor Office of Inspector General, Testimony before the U.S.
Senate Committee on Homeland Security and Governmental Affairs, Pandemic Response
and Accountability: Reducing Fraud and Expanding Access to COVID-19 Relief through
Effective Oversight, Number 19-22-003-03-315, March 17, 2022.

Page 16 GAO-23-106586
Funding: DOL provided grant opportunities to states, totaling up to
about $865 million, to improve UI systems and processes, including
addressing fraud prevention and detection.
Further, DOL continues to invest in identity verification resources. For
example, as we previously reported, DOL provided funding to procure
and implement an identity verification service, which became available to
states in July 2020, according to DOL officials. 33 This service provides
access to new datasets to conduct enhanced UI claimant identity
verification, which can help prevent payment of fraudulent claims based
on false identities. It also contains a cross-match with the Social Security
Administration Death Master File to identify the use of a deceased
person’s Social Security number when filing for benefits. As of October
2022, there were 41 states using the identity verification service,
according to DOL officials.

DOL has also collaborated with its OIG to share information on emerging
UI fraud issues and coordinate fraud prevention and recovery efforts.
According to DOL officials, they meet regularly to discuss emerging UI
fraud issues, streamline communication with states, and coordinate fraud
prevention and recovery efforts.

DOL Has Not While DOL has taken steps to address UI fraud risks, its approach has
Implemented an Antifraud not been strategically organized and targeted at prioritized risks.
Specifically, we found that it has not designed and implemented an
Strategy
antifraud strategy to guide its actions based on a fraud risk profile in
alignment with leading practices in our Fraud Risk Framework. 34 We
therefore recommended that DOL develop and implement such a strategy
that is consistent with leading practices from GAO’s Fraud Risk
Framework. As of January 2023, this recommendation remains open.

In October 2021, we recommended that DOL assess fraud risks in
alignment with the leading practices outlined in the Fraud Risk
Framework. 35 Specifically, we recommended that DOL

33GAO-23-105523.

34GAO-23-105523.

35GAO-22-105051.

Page 17 GAO-23-106586
1. identify inherent fraud risks facing the UI program, 36
2. assess the likelihood and impact of inherent fraud risks facing the
program,
3. determine fraud risk tolerance for the program, 37
4. examine the suitability of existing fraud controls in the program and
prioritize residual fraud risks, and
5. document the fraud risk profile for the program.
We also recommended in October 2021 that DOL designate a dedicated
entity to assess fraud risks to the UI program and document its
responsibilities for managing this process. This entity should have, as
discussed in the Fraud Risk Framework’s first component, clearly defined
and documented responsibilities and authority for managing fraud risk
assessment and facilitating communication among stakeholders
regarding fraud-related issues. In August 2022, DOL officials told us that
they are addressing this recommendation.

DOL officials further told us that DOL’s Office of Unemployment
Insurance in collaboration with DOL’s Office of the Chief Financial Officer
has begun implementing all of our fraud risk management-related
recommendations. These officials further told us that DOL’s Office of
Unemployment Insurance is currently developing its fraud risk
management process, including further identifying and documenting
inherent risks, impacts, fraud likelihood, and fraud tolerance in the UI
system. In addition, DOL officials stated they are in the process of
developing a fraud risk profile for the UI program, in alignment with the
leading practices in our Fraud Risk Framework. The UI antifraud strategy
we recommended would then be based on the fraud risk profile.

However, DOL’s work responding to our recommendations remains
incomplete and they remain open. Until DOL completes these efforts
expeditiously, it cannot ensure that it is effectively addressing fraud risks,
some of which may persist in the regular UI program beyond the
pandemic.

36According to federal internal control standards, inherent risk is the risk to an entity prior
to considering management’s response to the risk (see GAO, Standards for Internal
Control in the Federal Government, GAO-14-704G (Washington, D.C.: Sept. 2014)).
37According to federal internal control standards, risk tolerance is the acceptable level of
variation in performance relative to the achievement of objectives (see GAO-14-704G).

Page 18 GAO-23-106586
The expediting of COVID-19 relief funding exacerbated a continued
DOL Faces underlying problem with improper payments in the federal government,
Continued UI including UI, which predated the pandemic. In each of the three years
prior to the pandemic, the estimated improper payment rate for UI was
Improper Payment above 10 percent.
Problems
• In fiscal year 2017, estimated improper payments for UI totaled about
$4.1 billion (estimated improper payment rate of 12.5 percent).
• In fiscal year 2018, estimated improper payments totaled about
$3.7 billion (estimated improper payment rate of 13.1 percent). 38
• For fiscal year 2019, estimated improper payments totaled about
$2.9 billion (estimated improper payment rate of 10.6 percent).
Following the inception of the pandemic, DOL reported an increase in the
estimated improper payment amounts from about $8.0 billion (9.2 percent
estimated improper payment rate) for fiscal year 2020 to about
$78.1 billion (18.9 percent estimated improper payment rate) for fiscal
year 2021. 39 For fiscal year 2022, DOL reported estimated improper
payments of about $18.9 billion (22.2 percent estimated improper
payment rate). The decline in the fiscal year 2022 amount was due to a
significant decrease in UI-related outlays (about $85 billion) from the
fiscal year 2021 level (about $413 billion) as the pandemic UI programs
expired. 40

We have made a number of government wide recommendations to
address improper payment and fraud risks. In our March 2022 testimony
before the Senate Committee on Homeland Security and Governmental
Affairs, we identified 10 actions that Congress could take to strengthen
internal controls and financial and fraud risk management practices

38The improper payment amounts and corresponding rates for fiscal years 2017 and 2018
reflect combined improper payment and unknown payments.
39The president declared the pandemic an emergency in March 2020.

40DOL received a modified opinion for its financial statements for fiscal years 2021 and
2022. The modified opinion was made in part because the auditors were unable to obtain
sufficient appropriate audit evidence about the completeness of the benefit overpayment
receivable for COVID-19 related UI benefits. DOL’s auditor made three recommendations
in its fiscal year 2022 auditor’s report to address the issues related to the modified opinion.

Page 19 GAO-23-106586
across the government. 41 These matters for congressional consideration
remain open. We continue to believe that such actions will increase
accountability and transparency in federal spending in both emergency
and nonemergency periods. Appendix II provides a list of these matters,
while appendix III lists the 19 open recommendations to DOL to improve
the UI system.

In June 2022, we added the UI system to our High Risk Program because
UI System Added to it is in need of transformation. 42 The system’s administrative challenges
GAO’s High Risk pose significant risks to service delivery. Long-standing challenges with
UI administration and outdated IT systems have affected states’ ability to
Program meet the needs of unemployed workers, especially during economic
downturns. Such challenges have also contributed to impaired service,
declining access, and disparities in benefit distribution. Further, in terms
of program integrity, the risk of improper payments, including from fraud,
greatly increased during the pandemic and as new UI programs were
created, exposing the UI system to significant financial losses.

In our June 2022 report, we recommended that DOL develop and
implement a plan for transforming UI that meets GAO’s high-risk criteria
for transformations. DOL agreed with the recommendation and described
actions it is taking to address it, which include creating an UI
modernization office. However, many longstanding challenges remain
unaddressed that will likely heighten the multiple risks the UI program
faces, including not meeting fundamental expectations of serving workers
in a timely way and the broader economy and ensuring the responsible
stewardship of government funds.

GAO has five criteria for evaluating a program’s progress toward removal
from the High-Risk List:

1. a demonstrated strong commitment and leadership support to
address the risk(s),
2. the capacity (i.e., the people and other resources) to resolve the risks,

41GAO, Emergency Relief Funds: Significant Improvements Are Needed to Ensure
Transparency and Accountability for COVID-19 and Beyond, GAO-22-105715
(Washington, D.C.: Mar. 17, 2022). These matters were reiterated in a February 2023
testimony before the House Committee on Oversight and Accountability. GAO,
Emergency Relief Funds: Significant Improvements Are Needed to Address Fraud and
Improper Payments, GAO-23-106556 (Washington, D.C.: Feb. 1, 2023).
42GAO-22-105162.

Page 20 GAO-23-106586
3. a corrective action plan that defines root causes, identifies solutions,
and provides for substantially completing corrective measures near
term, including steps necessary to implement solutions we
recommend,
4. a program instituted to monitor and independently validate the
effectiveness and sustainability of corrective measures, and
5. the ability to demonstrate progress in implementing corrective
measures.
We will be providing periodic reports to Congress on DOL’s progress in
meeting these criteria.

Chairman Smith, Ranking Member Neal, and Members of the Committee,
this concludes my prepared statement. I would be pleased to respond to
any questions.

For further information about this testimony, please contact Seto
GAO Contacts Bagdoyan, Director, Forensic Audits and Investigative Service, at (202)
512-6722 or bagdoyans@gao.gov; Jared B. Smith, Director and Chief
Statistician, Applied Research and Methods, at (202) 512-2700 or
smithjb@gao.gov; Orice Williams Brown, Chief Operating Officer, at (202)
512-5600 or williamso@gao.gov; or A. Nicole Clowers, Managing
Director, Congressional Relations, at (202) 512-4400 or
clowersa@gao.gov.

Contact information for our Office of Public Affairs may be found on the
last page of this statement.

Page 21 GAO-23-106586
Appendix I: Related GAO Products
Appendix I: Related GAO Products

Emergency Relief Funds: Significant Improvements Are Needed to
Address Fraud and Improper Payments. GAO-23-106556. Washington,
D.C.: February 1, 2023.

Unemployment Insurance: Data Indicate Substantial Levels of Fraud
during the Pandemic; DOL Should Implement an Antifraud Strategy.
GAO-23-105523. Washington, D.C.: December 22, 2022.

Unemployment Insurance: Opportunities to Address Long-Standing
Challenges and Risks. GAO-106159. Washington, D.C.: September 21,
2022.

Unemployment Insurance: Transformation Needed to Address Program
Design, Infrastructure, and Integrity Risks. GAO-22-105162. Washington,
D.C.: June 7, 2022.

Pandemic Unemployment Assistance: Federal Program Supported
Contingent Workers amid Historic Demand, but DOL Should Examine
Racial Disparities in Benefit Receipt. GAO-22-104438. Washington, D.C.:
June 7, 2022.

Unemployment Insurance: Pandemic Programs Posed Challenges, and
DOL Could Better Address Customer Service and Emergency Planning.
GAO-22-104251. Washington, D.C.: June 7, 2022.

COVID-19: Current and Future Federal Preparedness Requires Fixes to
Improve Health Data and Address Improper Payments. GAO-22-105397.
Washington, D.C.: April 27, 2022.

Emergency Relief Funds: Significant Improvements Are Needed to
Ensure Transparency and Accountability for COVID-19 and Beyond.
GAO-22-105715. Washington, D.C.: March 17, 2022.

COVID-19: Significant Improvements Are Needed for Overseeing Relief
Funds and Leading Responses to Public Health Emergencies.
GAO-22-105291. Washington, D.C.: January 27, 2022.

COVID-19: Additional Actions Needed to Improve Accountability and
Program Effectiveness of Federal Response. GAO-22-105051.
Washington, D.C.: October 27, 2021.

Page 22 GAO-23-106586
Appendix I: Related GAO Products

COVID-19: Continued Attention Needed to Enhance Federal
Preparedness, Response, Service Delivery, and Program Integrity.
GAO-21-551. Washington, D.C.: July 19, 2021.

Management Report: Preliminary Information on Potential Racial and
Ethnic Disparities in the Receipt of Unemployment Insurance Benefits
during the COVID-19 Pandemic. GAO-21-599R. Washington, D.C.: June
17, 2021.

COVID-19: Sustained Federal Action Is Crucial as Pandemic Enters Its
Second Year. GAO-21-387. Washington, D.C.: March 31, 2021.

COVID-19: Critical Vaccine Distribution, Supply Chain, Program Integrity,
and Other Challenges Require Focused Federal Attention. GAO-21-265.
Washington, D.C.: January 28, 2021.

COVID-19: Urgent Actions Needed to Better Ensure an Effective Federal
Response. GAO-21-191. Washington, D.C.: November 30, 2020.

COVID-19: Federal Efforts Could Be Strengthened by Timely and
Concerted Actions. GAO-20-701. Washington, D.C.: September 21, 2020.

COVID-19: Opportunities to Improve Federal Response and Recovery
Efforts. GAO-20-625. Washington, D.C.: June 25, 2020.

Unemployment Insurance: Actions Needed to Ensure Consistent
Reporting of Overpayments and Claimants’ Compliance with Work
Search Requirements. GAO-18-486. Washington, D.C.: August 22, 2018.

Unemployment Insurance: States’ Customer Service Challenges and
DOL’s Related Assistance. GAO-16-430. Washington, D.C.: May 12,
2016.

Unemployment Insurance: States’ Reductions in Maximum Benefit
Durations Have Implications for Federal Costs. GAO-15-281.
Washington, D.C.: April 22, 2015.

Federal Employees’ Compensation Act: Case Examples Illustrate
Vulnerabilities That Could Result in Improper Payments or Overlapping
Benefits. GAO-13-386. Washington, D.C.: April 3, 2013.

Page 23 GAO-23-106586
Appendix I: Related GAO Products

Information Technology: Department of Labor Could Further Facilitate
Modernization of States’ Unemployment Insurance Systems.
GAO-12-957. Washington, D.C.: September 26, 2012.

Income Security: Overlapping Disability and Unemployment Benefits
Should Be Evaluated for Potential Savings. GAO-12-764. Washington
D.C.: July 31, 2012.

Page 24 GAO-23-106586
Appendix II: Matters for Congressional
Appendix II: Matters for Congressional
Consideration

Consideration

In a March 2022 testimony before the Senate Committee on Homeland
Security and Governmental Affairs, GAO made 10 matters for
congressional consideration. 1

1. Congress should pass legislation requiring the Office of Management
and Budget (OMB) to provide guidance for agencies to develop plans
for internal control that would then immediately be ready for use in, or
adaptation for, future emergencies or crises and requiring agencies to
report these internal control plans to OMB and Congress.
2. Congress should amend the Payment Integrity Information Act of
2019 to designate all new federal programs making more than
$100 million in payments in any one fiscal year as “susceptible to
significant improper payments” for their initial years of operation.
3. Congress should amend the Payment Integrity Information Act of
2019 to reinstate the requirement that agencies report on their
antifraud controls and fraud risk management efforts in their annual
financial reports.
4. Congress should establish a permanent analytics center of excellence
to aid the oversight community in identifying improper payments and
fraud.
5. Congress should clarify that (1) chief financial officers (CFO) at
CFO Act agencies have oversight responsibility for internal controls
over financial reporting and key financial management information
that includes spending data and improper payment information; and
(2) executive agency internal control assessment, reporting, and audit
requirements for key financial management information.
6. Congress should require agency CFOs to (1) submit a statement in
agencies’ annual financial reports certifying the reliability of improper
payments risk assessments and the validity of improper payment
estimates, and describing the actions of the CFO to monitor the
development and implementation of any corrective action plans; and
(2) approve any methodology that is not designed to produce a
statistically valid estimate.

1GAO, Emergency Relief Funds: Significant Improvements Are Needed to Ensure
Transparency and Accountability for COVID-19 and Beyond, GAO-22-105715
(Washington, D.C.: Mar. 17, 2022). These matters were reiterated in a February 2023
testimony before the House Committee on Oversight and Accountability. GAO,
Emergency Relief Funds: Significant Improvements Are Needed to Address Fraud and
Improper Payments, GAO-23-106556 (Washington, D.C.: Feb. 1, 2023).

Page 25 GAO-23-106586
Appendix II: Matters for Congressional
Consideration

7. Congress should consider legislation to require improper payment
information required to be reported under the Payment Integrity
Information Act of 2019 to be included in agencies’ annual financial
reports.
8. Congress should amend the DATA Act to extend the previous
requirement for agency inspectors general to review the
completeness, timeliness, quality, and accuracy of their respective
agency data submissions on a periodic basis.
9. Congress should amend the DATA Act to clarify the responsibilities
and authorities of OMB and Department of the Treasury for ensuring
the quality of data available on USAspending.gov.
10. Congress should amend the Social Security Act to accelerate and
make permanent the requirement for the Social Security
Administration to share its full death data with the Department of the
Treasury’s Do Not Pay working system.

Page 26 GAO-23-106586
Appendix III: Open Unemployment Appendix III: Open Unemployment Insurance-
Related Recommendations to the Department

Insurance-Related Recommendations to the
of Labor

Department of Labor
Table 1 lists GAO’s 19 open recommendations to the Department of
Labor to improve the Unemployment Insurance system. The first five
recommendations listed warrant priority attention from heads of key
departments or agencies because implementation could:

• save large amounts of money,
• improve congressional and executive branch decision making on
major issues,
• minimize mismanagement, fraud, and abuse, or
• ensure that programs comply with laws and funds are legally spent.

Table 1: GAO’s 19 Open Recommendations to the Department of Labor (DOL) to Improve the Unemployment Insurance (UI)
System, Open as of January 25, 2023

No. Report Number, Date Recommendation to DOL
1 GAO-22-104438, (priority) The Secretary of Labor should ensure the Office of Unemployment Insurance
June 7, 2022 examines and publicly reports on the extent and potential causes of racial and ethnic inequities
in the receipt of Pandemic Unemployment Assistance (PUA) benefits, as part of the agency’s
efforts to modernize UI and improve equity in the system. The report should also address
whether there is a need to examine racial, ethnic, or other inequities in regular UI benefit
receipt, based on the PUA findings.
2 GAO-22-105051, (priority) The Secretary of Labor should examine the suitability of existing fraud controls in the
October 27, 2021 UI program and prioritize residual fraud risks.
3 GAO-21-191, (priority) The Secretary of Labor should ensure the Office of Unemployment Insurance
November 30, 2020 pursues options to report the actual number of distinct individuals claiming benefits, such as by
collecting these already available data from states, starting from January 2020 onward.
4 GAO-18-486, (priority) The Assistant Secretary of DOL’s Employment and Training Administration should
August 22, 2018 provide states with information about its determination that the use of state formal warning
policies is no longer permissible under federal law.
5 GAO-18-486, (priority) The Assistant Secretary of DOL’s Employment and Training Administration should
August 22, 2018 clarify information on work search verification requirements in its revised Benefit Accuracy
Measurement procedures. The revised procedures should include an explanation of what DOL
considers to be sufficient verification of claimants’ work search activities.
6 GAO-23-105523, The Secretary of Labor should design and implement an antifraud strategy for UI based on a
December 22, 2022 fraud risk profile consistent with leading practices as provided in the Fraud Risk Framework.
7 GAO-22-105162, The Secretary of Labor should develop and execute a transformation plan that meets GAO’s
June 7, 2022 high risk criteria for transformation; the plan should outline coordinated and sustained actions
to address known issues related to providing effective service and mitigating financial risk,
including ways to demonstrate improvements. Planned actions may include addressing audit
recommendations, and determining whether legislative changes are needed, as appropriate.
Planned actions may also include achieving quantifiable results in reducing improper payment
rates, including those related to fraud; improving efficiency in claims processing and restoring
pre-pandemic payment timeliness levels; better reaching current worker populations; and
enhancing equity in benefit distribution.

Page 27 GAO-23-106586
Appendix III: Open Unemployment Insurance-
Related Recommendations to the Department
of Labor

No. Report Number, Date Recommendation to DOL
8 GAO-22-104438, The Secretary of Labor should study and advise the Congress and other policymakers on the
June 7, 2022 costs, benefits, and risks of various options to systematically support self-employed and
contingent workers during periods of involuntary unemployment outside of declared disasters,
including considering options’ feasibility and approach to fraud prevention.
9 GAO-22-104251, The Secretary of Labor should ensure the Office of Unemployment Insurance assesses
June 7, 2022 lessons learned from the pandemic to inform its future disaster responses efforts and support
the Congress on ways to address future emergencies.
10 GAO-22-105051, The Secretary of Labor should designate a dedicated entity and document its responsibilities
October 27, 2021 for managing the process of assessing fraud risks to the UI program, consistent with leading
practices as provided in our Fraud Risk Framework. This entity 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.
11 GAO-22-105051, The Secretary of Labor should identify inherent fraud risks facing the UI program.
October 27, 2021
12 GAO-22-105051, The Secretary of Labor should assess the likelihood and impact of inherent fraud risks facing
October 27, 2021 the UI program.
13 GAO-22-105051, The Secretary of Labor should determine fraud risk tolerance for the UI program.
October 27, 2021
14 GAO-22-105051, The Secretary of Labor should document the fraud risk profile for the UI program.
October 27, 2021
15 GAO-21-387, The Secretary of Labor should ensure the Office of Unemployment Insurance collects data
March 31, 2021 from states on the amount of overpayments waived in the PUA program, similar to the regular
UI program.*
16 GAO-21-265, The Secretary of Labor should ensure the Office of Unemployment Insurance collects data
January 28, 2021 from states on the amount of overpayments recovered in the PUA program, similar to the
regular UI program.*
17 GAO-18-633, The Secretary of Labor should update agency guidelines to ensure that it clearly informs states
September 4, 2018 about the range of allowable profiling approaches.a
18 GAO-18-486, The Assistant Secretary of DOL’s Employment and Training Administration should monitor
August 22, 2018 states’ efforts to discontinue the use of formal warning policies.
19 GAO-18-486, The Assistant Secretary of DOL’s Employment and Training Administration should monitor
August 22, 2018 states’ compliance with the clarified work search verification requirements.
*This recommendation is partially implemented.
Source: GAO. | GAO-23-106586
a
Since 1994, states have been required by law to develop and use profiling systems to identify UI
claimants who are likely to exhaust their benefits, and to refer such claimants to reemployment
services (Pub. L. No. 103-152, § 4, 107 Stat. 1516, 1517 (1993), codified at 42 U.S.C. § 503(j)).
These claimants must generally participate in reemployment services as a condition of eligibility for UI
benefits. In our September 2018 report, we found that state officials differed in their awareness of
available options for developing profiling systems.

(106586)
Page 28 GAO-23-106586
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