The US Department of Labor (DOL) released a goal statement in FY20 that “By September 30, 2021, the Unemployment Insurance (UI) improper payment rate will be 9.0 percent.” This was against the backdrop of earlier congressional testimony by Scott S. Dahl, DOL’s Inspector General, estimating $26 billion in improper payments made through the UI program was expected via the coronavirus relief bills unless drastic actions were undertaken.
As 2020 comes to a close and in the wake of multiple recent reports from the State-level UI programs, we are well on our way to achieving that $26 billion estimate of waste, whether from improper payments or fraudulent activity. But it doesn’t have to be this way—and comprehensive data management by the individual states can play a vital role in correcting this travesty.
The U.S. Government defines improper payments as those “…made by the government to the wrong person, in the wrong amount, or for the wrong reason. Although not all improper payments are fraud, and not all improper payments represent a loss to the government, all improper payments degrade the integrity of government programs and compromise citizens’ trust in government.”
Dahl also said in his statement that major challenges for DOL and states include administration and oversight of the UI program with controls to identify fraud, self-certification for pandemic UI benefits, communication with employers, benefit-year earnings, information technology systems, staffing, and monitoring.
While any endeavor to reduce improper payments and fraud on a government program includes a comprehensive approach across people, process, and technology, solid management of data at the state level is imperative to achieve any amount of reduction.
As an example, simply cross-checking Social Security numbers with prison inmate records would have saved California from having to identify and investigate a fraud scheme across their penitentiary system that resulted in an estimated $1 billion in improper pandemic unemployment benefits being paid to inmates and their associates. Other states such as Louisiana, Michigan, Illinois, Kansas, and more are dealing with a surge in claims across the various avenues for UI, and thus payments for individuals are duplicative.
This is a data issue. Inaccurate citizen data, coding errors, and a lack of a single source of truth are at the core of the problem.
State-level agencies responsible for ensuring UI payments get to the right person, in the right amount, and for the right reason have solutions within their reach now. Trusted data is paramount, and every state can safeguard their programs with an enterprise data management platform that provides capability for the following:
With these core data management capabilities in place, agencies across Federal and State governments can dramatically reduce the risk of improper payments and support citizens when they need it most. With the pandemic crisis continuing and additional stimulus funds expected, correcting our spiral towards $26 billion in wasteful distribution must be addressed now.
Learn more about data management strategies for government agencies at www.informatica.com/public-sector.