Audit of the Executive Office of Labor and Workforce Development - Department of Unemployment Assistance (December 12, 2024)

This is a Massachusetts State Auditor performance audit of the Executive Office of Labor and Workforce Development and its Department of Unemployment Assistance during the early pandemic period.

“In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Executive Office of Labor and Workforce Development (EOLWD) for the period of March 12, 2020, through December 31, 2021.”

Auditors wanted to know whether the unemployment agency had controls to catch possible fraud in expanded COVID-era unemployment programs.

“The purpose of the audit was to determine what type of system controls the Department of Unemployment Assistance (DUA) had in place to identify potential fraud within expanded programs related to the COVID-19 pandemic.”

If the agency does not check eligibility well, public money can be paid out incorrectly and the unemployment fund can be drained faster.

“If DUA does not perform its due diligence to ensure that all benefit recipients are eligible, DUA may not be managing taxpayer funds effectively, which may result in less money being available for other services and programs and the premature exhaustion of money from the Unemployment Insurance Trust Fund (UITF).”

Ordinary residents and businesses could be affected because unemployment fund problems may eventually have to be repaid with public or employer money.

“These overpayments may need to be repaid by businesses, taxpayers, and state government.”

The audit found four main issues: improper payments involving incarcerated people and state employees, missed reporting to federal investigators, and late or missing unemployment trust fund reports.

“DUA did not report overpayments made to incarcerated individuals to DOL OIG for further investigation.”

The auditors recommended better matching systems, better investigation and reporting of large overpayments, and timely reports to the Legislature.

“DUA should review the design of its incarceration crossmatch process to detect all instances of incarcerated individuals applying for unemployment insurance (UI) benefits (or their identifications being used by others to do so) to ensure that those ineligible individuals do not receive UI benefits from the Commonwealth.”

The stakes were large because Massachusetts handled billions of dollars in pandemic unemployment funds.

“As of January 2022, Massachusetts had received over $26.5 billion in pandemic-related unemployment funds to administer from the Families First Coronavirus Response Act and the Coronavirus, Aid, Relief, and Economic Security (CARES) Act.”

PUA means Pandemic Unemployment Assistance, a temporary COVID-era benefit for people who normally might not qualify for regular unemployment insurance, such as some self-employed or part-time workers.

“The PUA program was available to individuals whose incomes were affected by the COVID-19 pandemic and who were self-employed, seeking part-time employment, or otherwise would not qualify for UI benefits or qualify for extended benefits under state or federal law.”