LANSING, Mich. — The Senate and House of Representatives Oversight committees held a joint hearing Tuesday, beginning a legislative inquiry into the state Unemployment Insurance Agency. The UIA was recently discovered by the state Office of the Auditor General to have erroneously distributed $3.9 billion in unauthorized benefits to nearly 350,000 people during the COVID-19 pandemic.
“There are longstanding structural problems at the UIA that predate the recent revelation the agency squandered billions of dollars in assistance meant for out-of-work Michigan residents,” said Sen. Ed McBroom, R-Waucedah Township. “Prior to the coronavirus outbreak, agency leadership assured the Senate Oversight Committee that it addressed issues and was ready for any potential crisis. Clearly that was false, and the auditor general report showed the agency failed to act on a U.S. Department of Labor finding on its actions for at least nine months.
“The eventual correction of this mistake has led to further fear and frustration among residents as they have received letters demanding repayments of tens of thousands of dollars they were led to believe they properly applied for and received.”
McBroom cited the OAG report, which indicated UIA leadership’s “failure to timely or appropriately address issues pointed out by the USDOL and UIA staff.” According to the report, the agency “bypassed established procedures requiring approvals from key UIA personnel when developing its Pandemic Unemployment Assistance application and certification criteria due to the urgency to make the application available in response to the pandemic.”
“Gov. Whitmer’s inner circle was, admittedly, integrally involved with UIA decision making throughout its pandemic response, yet the governor has remained silent after this audit bombshell. Her administration has not provided the public any documentation or context as to why these decisions were made and why they ignored federal government admonishments,” McBroom said. “Transparency from the administration is a necessary next step in this process to restore the public’s faith in the agency. The committee will strive to illuminate what led to this disaster, as well as to ensure people in need of unemployment assistance are able to file claims, get a decision, and receive payment in a timely manner, while also preventing fraud or payments to ineligible individuals.
“I appreciate Auditor General Doug Ringler and his staff for their work on behalf of taxpayers as well as for their time testifying at the committee hearing. The UIA’s problems didn’t happen overnight and neither will fixing the agency. This is just one hearing of potentially many as we will be methodical in investigating what went wrong, by whom, and when, to develop policy recommendations to reform the UIA for the future.”