GAO Releases New Estimate of COVID Unemployment Insurance Fraud | Citizens Against Government Waste

GAO Releases New Estimate of COVID Unemployment Insurance Fraud

The WasteWatcher

COVID-19 is no longer a pandemic, but the spending that occurred for “relief” continues to be problematic.  The full extent of how much money was stolen is not entirely known, but a September 12, 2023,  Government Accountability Office (GAO) report estimates that unemployment-related fraud alone has cost between $100 billion and $135 billion.  In February 2023, the Department of Labor Inspector General reported that at least $191 billion in pandemic unemployment insurance (UI) payments could have been improper payments and a significant portion of those payments were likely due to fraud.  

While the new GAO report does not have as high of an estimate, the conclusions are still staggering.  The amount stolen equals between 11-15 percent of total unemployment insurance payments.  The report noted that states have recovered about $6.8 billion to date, including $1.2 billion in fraudulent payments.  The GAO has made 26 recommendations to the Department of Labor since 2018 to address fraudulent or improper payments, but only 10 of those recommendations have been implemented.  The massive amount of fraud also caused UI systems to be placed on the GAO’s High-Risk List. 

 Members of Congress should enact reforms and solutions to recover money that has already been stolen and prevent future taxpayer dollars from being stolen in a similar way.  One step that the Senate can take is to pass H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act.  This bill was introduced by House Ways and Means Committee Chairman Jason Smith (R-Mo,) and House Oversight and Accountability Chairman James Comer (R-Ky.) and passed the House of Representatives on May 11, 2023.  The bill incentivizes states to recover stolen UI funds by allowing the states to keep 25 percent of the money they recover.  This money could be spent on improving state UI systems to ensure that these programs are not such easy targets for fraudsters and criminals in the future.  The bill would also extend the statute of limitations for prosecuting UI fraud from 5 years to 10 years. 

Congress should also continue to exercise its oversight duties on how federal agencies make payments in assistance programs.  As Rep. Nancy Mace (R-S.C.) noted in a February 1, 2023, House Oversight and Accountability Committee hearing on COVID fraud, “anytime the federal government spends trillions of dollars we should ensure its safekeeping regardless of who is in power.”

While the full extent of how much fraud plagued pandemic relief programs may never be known, and much of the money will likely never be recovered, Congress and executive branch agencies should continue to do whatever may be possible to get as many answers and money as possible.  The waste, fraud, and abuse in these programs should serve as a lesson for members of Congress to implement safeguards and better protect taxpayer dollars in the future. 

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