Illinois (ECWd) –
For years, we have pointed to our own Illinois Government reports found on the Auditor General’s website as proof of the failed system of government in Illinois. Pick any state agency from the list found at this link and read the auditors’ findings, many of which would constitute a crime. Then ask yourself, how many people have ever been brought up on charges for malfeasance identified in these official reports?
Hold on to your coffee. While the country is outraged over a billion dollars or more of fraud being exposed in Minnesota, the fraud identified in just one official Illinois State Agency, the Illinois Department of Employment Services, makes Minnesota’s fraud look like child’s play.
To date, we have not identified any significant coverage of the information presented in a 2023 report identifying Billions in fraud. While we are in the middle of yet another election cycle, let this report sink in and ask yourself, who was in state elected office during this fraud and what steps did they take to address it and hold people accountable. If they were silent and took no action and are seeking re-election, think long and hard about that in the ballot box.
Performance Audit – IDES Unemployment Insurance Programs – July 26, 2023
- Overpayments (which include fraud, non-fraud, and identity theft) were an issue in both the regular UI and PUA programs. IDES reported overpayments for FY20 to FY22 that totaled $5.24 billion; regular UI accounted for $2.04 billion and PUA accounted for $3.20 billion.
- Considering gross benefits associated with regular UI claims were 2.5 times higher than gross benefits associated with PUA claims, it shows the magnitude of fraud experienced in the PUA program.
- IDES made large payments of backdated benefits while controls were suspended which could have contributed to large overpayments and losses due to fraud and identity theft.
- IDES data shows payments were made to deceased individuals and incarcerated individuals. The data showed, for both regular UI and PUA combined, a total of 481 deceased individuals received 10,527 payments totaling $6.0 million.
- In addition, 3,448 incarcerated individuals received 92,811 payments totaling $40.5 million. Testing these cases showed that some overpayments had already been identified as fraud. However, some of the overpayment figures excluded payments made before January 2021 and therefore understated the overpayment.
- The Department entered into eight contracts, including 29 amendments, during the audit period for services and software related to administering the unemployment insurance and PUA programs. Pursuant to a Disaster Proclamation issued by the Governor, these contracts were deemed necessary to respond to the COVID-19 pandemic and were therefore exempt from bidding and the provisions of the Illinois Procurement Code. Nine of the 29 amendments were signed by IDES between 2 days and 45 days after the effective date of the amendment. The eight contracts initially totaled $33.5 million. However, with subsequent amendments, the eight contracts eventually totaled $226.4 million,
- IDES did not comply with all state and federal statutory and administrative requirements for processing and auditing claims.
- IDES did not implement one of the tools that was strongly recommended in May 2020 by the US Department of Labor (the Integrity Data Hub), until September 2021. IDES also failed to file 26 outstanding Employment and Training Administration (ETA) reports required by the US Department of Labor.
- IDES data also shows benefits being paid out to individuals that were born before January 1, 1935, (at least 85 as of March 2020) and after September 6, 2006, (younger than 15 as of September 2021). Claims for these ages are not prohibited and are not necessarily fraud; however, they are suspicious. The data showed, for both regular UI and PUA combined, a total of 4,639 individuals receiving 120,663 payments totaling $65.8 million. The birth years ranged from 1901 to 2021
As if the above few items taken from the 125-page report is not enough to make you sick, the recommendations outlined made absolutely no reference to the filing of criminal complaints with law enforcement, nor any mention that criminal prosecutions should be pursued.
According to IDES, between March 1, 2020, and September 6, 2021, they did not refer any cases to the Attorney General, but they referred at least 79 matters/leads to the US DOL Office of the Inspector General. (As of February 2023, only two convictions had been completed and only $450 had been received from restitution. Others could be pending.) In addition to cases that are referred to these agencies, IDES has recovered approximately $511.7 million in recoveries and stopped payments.
Why is it that in Illinois, fraud can be officially documented in an audit report, and no one in this state lifts a finger to prosecute those responsible for both the fraud itself and those who allowed it to happen while employed in positions to prevent it? While we are glad the Federal agency received a whopping 79 leads and obtained 2 convictions, why did that not happen by our own state prosecutors?
And for those that missed it above, the above figures is just ONE state Agency!
Did this agency learn anything over the last few years from all the audit reports? We guess not when looking at the most recent audit report findings for this agency.
- Inadequate Controls over Recording of Refunds
- Inadequate Controls over Cash Reconciliations
- Finding 2024-003 Inadequate Controls over Service Providers
- Finding 2024-004 Weaknesses in IBIS Application
- Finding 2024-005 Inadequate Controls over Estimated Receivables
When will people be cuffed and stuffed for the fraud being committed in the State of Illinois?
Note: In full disclosure, I was a recipient of a credit card issued by the IDES for unemployment benefits. I was not an employee of the company listed as the employer, nor had I requested unemployment benefits. When I contacted the fraud hotline, I was told to simply destroy the card and informed that this happens all the time.
The full Performance Report can be downloaded at this link or viewed below.
