| Organization: | Office of the State Auditor |
|---|---|
| Date published: | December 12, 2024 |
| Last updated: | December 16, 2024 |
Executive Summary
In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Executive Office of Labor and Workforce Development (EOLWD) for the period of March 12, 2020, through December 31, 2021.
The purpose of the audit was to determine what type of system controls the Department of Unemployment Assistance (DUA) had in place to identify potential fraud within expanded programs related to the COVID-19 pandemic. We looked at certain areas where we believed it would be easier for DUA to determine whether fraud occurred—areas where state government already has sufficient data in its possession to identify potential fraud—and whether DUA used this information to look for and identify such activity. In order do to this, we examined the following:
- whether DUA ensured that incarcerated individuals did not receive Pandemic Unemployment Assistance (PUA) benefits in accordance with the US Department of Labor’s (DOL’s) Employment and Training Administration’s (ETA’s) Unemployment Insurance Program Letter No. 23–20, dated May 11, 2020;
- whether DUA ensured that Commonwealth of Massachusetts employees did not receive PUA benefits in accordance with DOL’s ETA’s Unemployment Insurance Program Letter No. 23–20, dated May 11, 2020;
- whether DUA investigated and reported all overpayments over $10,000 to the DOL Office of the Inspector General (OIG) in accordance with DOL’s ETA’s Unemployment Insurance Program Letter No. 04–17 (Change 1);
- whether DUA updated its internal control plan to address the COVID-19 pandemic in accordance with the Office of the Comptroller of the Commonwealth’s (CTR’s) “COVID-19 Pandemic Response Guidance,” dated September 30, 2020;
- whether DUA submitted annual, quarterly, and monthly Unemployment Insurance Trust Fund (UITF) reports to the Legislature in accordance with Section 14F of Chapter 151A of the General Laws.
Below is a summary of our findings, the effects of those findings, and our recommendations, with links to each page listed.
| Finding 1 | DUA incorrectly paid PUA benefits on behalf of individuals while they were incarcerated. |
| Effect | If DUA does not perform its due diligence to ensure that all benefit recipients are eligible, DUA may not be managing taxpayer funds effectively, which may result in less money being available for other services and programs and the premature exhaustion of money from the UITF. |
| Recommendation | DUA should review the design of its incarceration crossmatch process to detect all instances of incarcerated individuals applying for unemployment insurance (UI) benefits (or their identifications being used by others to do so) to ensure that those ineligible individuals do not receive UI benefits from the Commonwealth. |
| Finding 2 | DUA incorrectly paid PUA benefits on behalf of then-current Commonwealth of Massachusetts employees who were not eligible to receive these benefits. |
| Effect | If DUA does not perform its due diligence to ensure that all benefit recipients are eligible, DUA may not be managing taxpayer funds effectively, which may result in less money being available for other services and programs and the premature exhaustion of money from the UITF. |
| Recommendations |
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| Finding 3 | DUA did not report overpayments made to incarcerated individuals to DOL OIG for further investigation. |
| Effect | Because DUA did not report the overpayments to DOL OIG, DOL OIG was not able to investigate the causes of these overpayments and potentially prosecute any offenders. |
| Recommendations |
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| Finding 4 | EOLWD’s Department of Economic Research did not submit all UITF reports or ensure that they were submitted by required due dates. |
| Effect | Untimely or missing UITF reports can delay legislative oversight, accountability and decisions related to the UITF. In this instance, the failure to issue timely UITF reports coincided with an estimated $2.5 billion in being overdrawn by the Commonwealth from the UITF. These overpayments may need to be repaid by businesses, taxpayers, and state government. Failure to submit these reports in a timely manner also prevented policymakers, including the Legislature, from participating in the process of identifying and implementing solutions to this issue, potentially resulting in a larger overspending than otherwise would have occurred. |
| Recommendations |
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