Audit: IDES "Not Prepared" for Pandemic Challenges, Lost $5 billion
A patron outside of an Illinois Department of Employment Security office during the pandemic in 2020.
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A new Illinois Auditor General has revealed the Illinois Department of Employment Security (IDES) overpaid unemployment claims totaling $5.24 billion during the pandemic.
We dug into the 156 page report, which showed about $2 billion in overpayments came from regular state Unemployment Insurance program and another $3.2 billion came from the federal Pandemic Unemployment Assistance program.
IDES stopped or recovered around $500 million of the overpayments.
But the Auditor General’s report shows IDES failed to perform even basic identity checks.
“Beginning in March 2020, IDES suspended some routine identity cross-matches performed on all regular UI claims filed because the cross-matches required time to run and constricted the processing system severely. These cross-matches were temporarily suspended and/or processed offline,” the report reads. “This allowed IDES to better handle the increase in claims processing traffic; however, this left the unemployment programs more susceptible to fraud.”
The main issue at hand is that IDES competed with itself in trying to get unemployment payments out quickly in the early days of the pandemic as well as stop fraudulent claims.
In the process, IDES paid $6 million out to 481 dead people and around $40 million to more than 3,000 people who were incarcerated at the time.
The Auditor General ceded the pandemic brought an “unprecedented increase” in unemployment claims, but that the Pritzker administration could have been better prepared for a major downturn in the economy.
IDES was not prepared to quickly increase staffing, which created delays in answering phone calls and processing claims. Staffing issues were compounded by retirements and staff being forced to work from home due to the pandemic.
PUA benefits could not be processed until a new PUA payment system was in place.
IDES’ website and the IBIS system crashed due to overload.
Claimants with missing or hijacked payments experienced substantial delays in getting their payments reissued due to an inadequate procedure for processing and handling payment tracer forms, especially in times of high demand. Auditors found that it took IDES, on average, 198 days to reissue hijacked regular UI payments and 445 days for hijacked PUA payments.
Republicans were critical of how IDES handled the unemployment programs during the pandemic.
“I think during the early days of the pandemic we felt that everyone was doing the best that they could with an extremely difficult and unprecedented situation,” said Sen. Chapin Rose (R-Mahomet). “However, it quickly became clear to myself and countless others on both sides of the aisle in the General Assembly that the taxpayers were being robbed blind by what was happening at IDES. The Governor ignored these warnings and told us the situation was under control. This audit has made it crystal clear that the administration’s management of the unemployment system during COVID was an unmitigated disaster of historic proportions.”
The full report is here.