JACKSON, MISS (Clarion-Ledger) – The Mississippi Department of Employment Security incorrectly paid out nearly $118 million in unemployment claims during the early days of the pandemic, according to a report from the State Auditor’s Office.
Of the incorrect payments, some were cases of stolen identity, some were part of international unemployment fraud schemes, some went to people who never lost their jobs and others went to people who were in jail, the report says.
“It’s more important than ever to understand the mistakes that were made when money was flowing so freely during COVID,” Mississippi State Auditor Shad White said in a statement.
The Department of Employment Security cannot yet determine how much unemployment money was given to fraudsters and how much was incorrectly paid to people who made mistakes filing for benefits, according to Stephanie Palmertree, director of finance and compliance for the Mississippi State Auditor’s Office.
In its report, the auditor’s office suggests many of the wrong payments went undetected by the Mississippi Department of Employment Security, or MDES, because its staff were overwhelmed by the sheer number of unemploymentclaims filed at the pandemic’s start. MDES waived most of the usual criteria for Mississippians to receive unemployment benefits, making it easier for people to defraud the state, the report says.
One of the criteria lifted during the onset of the pandemic was that claimants must actively search for work while receiving unemployment benefits. Because the requirement was set aside, applications were approved en masse, leading to inmates receiving benefits, according to the auditor’s report.
Additionally, the system that checks Social Security numbers to verify a person’s identity was down during the early months of the pandemic, making it easier to collect benefits using a false identity.
Although MDES incorrectly paid claimants roughly $118 million, the amount is about 5.5% of the $2.1 billion in unemployment benefits the agency paid out in fiscal year 2020, which ended in June of that year.
“This is an incredible percentage considering the circumstances,” MDES Executive Director Jacqueline Turner said in a written response to the auditor’s report.
Turner acknowledged a number of improper payments and overpayments occurred, but disagreed with the auditor’s assertion that MDES improperly waived its usual criteria. It’s not clear how much of the $118 million is state money, and how much of it was federal assistance.
Turner said the agency was following new criteria set out in executive orders issued by Gov. Tate Reeves and then-President Donald Trump. Because Mississippi was under both federal and state-declared emergencies, any executive orders supplanted existing law, Turner said.
“MDES respectfully disagrees with this findingbecause it does not acknowledge or allow for the existence of this pandemic, or the radically new and different federal programs implemented during the disaster,” Turner wrote in her response letter to White.
Mississippi is not the only state to determine it paid unemployment benefits to people who were ineligible to receive the money. California and New York lost hundreds of millions, if not billions, to fraudsters. A report from Iowa’s Workforce Development program director showed that state paid out at least $30 million in fraudulent claims.
Any overpayments of unemployment benefits after June 2020 will be publicly accounted for in next year’s audit, according to White’s office. It’s not clear how much money MDES has paid out in unemployment claims since June 2020.