Federal Manager's Daily Report

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GAO has added unemployment insurance—mainly implemented at the state level but overseen by the Labor Department at the federal level—to its list of federal programs at high risk of mismanagement, fraud and waste meriting special attention by Congress and the administration.

The GAO says that Labor has “regularly reported billions of dollars in annual UI improper payments. The problem intensified during the pandemic, with estimated improper payments rising from approximately $8.0 billion in fiscal year 2020 (a 9.2 percent rate) to about $78.1 billion in fiscal year 2021 (an 18.9 percent rate).”

“The total amount of UI improper payments is unknown due to incomplete reporting by DoL and the states, but fraud is a growing problem. The main cause for the increase in fraud during the pandemic was identity theft, according to DoL. From March 2020 through January 2022, hundreds of individuals either pled guilty to defrauding UI programs or had federal charges pending against them,” it said.

A trio of GAO reports issued at the same time cited problems including delays in providing the benefits as state systems were overwhelmed, and racial and ethnic disparities in approval of benefits for the self-employed. GAO recommended that the Labor Department take steps to improve customer service, plan for future emergencies, consider new options to support the self-employed, assess the causes of the racial and ethnic inequities, and modernize the system with an emphasis on preventing waste.

The addition to the brings the high-risk list total to 38, a number that has grown since the initial list in 1990 with removals offsetting some 52 additions in that period. The list typically is updated at the start of each new Congress but GAO does make additions when it determines a problem merits it.

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2022 Federal Employees Handbook