New York State Comptroller Tom DiNapoli thinks most, if not all, of the unemployment fraud that cost taxpayers $11 billion could have been prevented.
The report released earlier in November made one thing abundantly clear: While blame will be passed around – the $11 billion lost to fraudulent claims is done.
Recouping that money will be difficult, if not impossible. Why? Mostly because the Department of Labor was so unwilling to work with auditors on finding the real amount of money lost.
There were early claims during the first part of the pandemic, when former Governor Andrew Cuomo was in office, that more than $36 billion in fraud had been stopped.
“[The] DOL was unable to provide supporting documentation on the over $36 billion in fraudulent claims the Commissioner of Labor said that it had prevented,” the Comptroller’s initial announcement read, pouring cold water on early-pandemic reports that the agency was preventing large volume fraud. “It also could not explain to auditors why the estimated number of frauds for traditional UI claims more than tripled during SFY 2020-21, nor was it willing to provide data to auditors that would enable them to perform their own independent analysis to assess the amount of fraudulent claims.”
DiNapoli says it comes down to the DOL ignoring previous warnings about their outdated unemployment system. That system was overwhelmed by the shutdown of New York’s economy. There was a massive spike in requests for unemployment benefits, and as result, auditors estimated that around $11 billion was lost.
The DOL heard warnings in 2010 and 2015 about the unemployment insurance system. More than a decade before the pandemic arrived.
DiNapoli says the frustrating part is that it all could have been avoided. The agency says an update is happening now.
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