Advocacy News – March 22, 2022
“The Unemployment Insurance Agency (UIA) failed to obtain background checks, confidentiality agreements and other-necessary documentation for temporary workers hired during the COVID pandemic,” an audit released Friday said.
The Office of the Auditor General’s (OAG) audit also found the UIA did not immediately eliminate access for temporary workers and did not strengthen its oversight of database usage after one temporary worker was charged with committing fraud worth $3.8 million.
As unemployment claims hit an unprecedented threshold during COVID-19, the UIA moved to hire temporary employees and rehire former employees and retirees to process unemployment insurance applications and claims. Unfortunately, as OAG’s audit found, UIA’s practices for employee onboarding and offboarding during the pandemic was insufficient.
One material condition discovered UIA did not conduct or require the staffing agencies and Michigan Works! Agencies they used to hire employees to run criminal history background checks of their contracted workers. UIA also failed to communicate the types of convictions that would eliminate individuals from eligibility to work with UIA.
As a result, at least 169 workers employed by UIA during the pandemic had one or more misdemeanors or felonies and 47 of those workers had one or more felony convictions. This included embezzlement, illegal sale/use of financial transaction devices, false pretenses with intent to defraud, identity theft and armed robbery. Seventy-one of these individuals were still working with the UIA as of December 31, 2020.
The UIA has agreed with most of the findings of the audit and has said they will work with the Department of Labor and Economic Opportunity’s human resources division to strengthen the background check policy and process.
The OAG recommended LEO and the UIA improve its contracting and contract management processes.
The Michigan Chamber is currently reviewing the 44-page audit and will be working to advance reforms to ensure the state is taking proper steps to ensure their workers don’t have disqualifying criminal backgrounds and people’s personal information is secure.
While Michigan must support workers who lost their jobs due to no fault of their own, the UIA also has the obligation to protect the the 100 percent employer funded trust fund; the fund that pays benefits to the unemployed.
Changes are clearly needed as this audit comes on top of another OAG audit that found the UIA paid up to $8.5 billion in fraudulent claims.
Please contact Wendy Block with questions at wblock@michamber.com.