Pandemic unemployment insurance fraud could total $135 billion, the Government Accountability Office estimates.
GAO found rampant waste, abuse, and fraud in the COVID-19 era program, which was meant to help those laid off due to the pandemic. In its investigations of state records it found $55.8 billion in overpayments, $5.3 billion of which were fraudulent.
Using statistical modeling, GAO used this data sample to estimate that the total amount of fraud in pandemic unemployment insurance programs was between $100 and $135 billion. The Department of Labor claimed this is an overestimate, but GAO defended its methodology.
Not only were taxpayers defrauded of billions, but the Department of Labor anticipated this and awarded $1.4 billion to states for investigating fraud and recovering fraudulent funds. In hindsight, that massive funding wasn’t very effective. So far, only $1.2 billion has been recovered, less than what it cost to fund the investigations.
Unfortunately, the Department of Labor doesn’t seem too eager to learn from its mistakes. Since 2018, GAO has made 26 recommendations to the Department of Labor to prevent fraud and overpayments, but so far, 16 of those have not yet been fully implemented.
The hundreds of billions that were wasted and stolen between various pandemic relief programs like the Paycheck Protection Program, the Economic Injury Disaster Loan Program, and unemployment insurance add up to a significant part of the U.S. national debt, and will cost taxpayers for years to come as we finance this debt at higher interest rates.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.
Originally published by RealClearInvestigations. Republished with permission.
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