State’s Automated Fraud System Wrong in 93% of Reviewed Unemployment Cases from 2013-2105

Dec 16, 2016

WASHINGTON, D.C. – Rep. Sander Levin (D-Royal Oak) today called on the State of Michigan to broaden their review of unemployment insurance fraud cases after a re-review of cases found an error rate of 93% in auto-adjudicated cases between October 2013 and August 4, 2015.

“This high level of error rate in accusations of fraud is outrageous for any government program, especially one for unemployed workers trying to stay afloat while they find another job. Running a fully automated system that spit out fraud determinations for such a long period of time was in violation of federal law and completely reckless.  In addition, the Auditor General’s report makes it clear that the agency’s due process requirements were severely lacking during this period.

“While I’m pleased that a small subset of the cases has been reviewed, the state has a responsibility to look at the additional 30,000 fraud determinations made during this same time period. 

“Finally, with an Unemployment Insurance contingency fund that has grown so dramatically, the state must do a full accounting of the monies that have flowed into this account. While I am pleased that $5 million has been repaid, it strikes me as small compared to the amount of money that was collected at the time.  Only a full audit will ensure the public that the problem has been fully rectified.”

Rep. Levin called on the State to investigate the Michigan Integrated Data Automated System (MiDAS) system in a letter  to the Governor on April 25th. The recent review was required by the U.S. Department of Labor and initiated after a February 2016 Michigan Auditor General report found that computer-determined fraud was affirmed in only 8 percent of cases that were appealed.

The Numbers:

Total Fraud Determinations, October 2013 – August 2015

53,633

Total Cases Reviewed by State

22,427

Total Fraud Determinations Upheld

1,462

Total Fraud Determinations Overturned       

20,965

Individuals Requiring Repayment

2,571

Amount Repaid to Individuals

$5,431,821

Data provided by the State of Michigan Unemployment Insurance Agency.

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