Eye On Illinois: Fraud audit shows results of pandemic-era concessions

Cause, meet effect.

Eye On Illinois launched in May 2020, roughly concurrent with discovery of a massive data breach at the Illinois Department of Employment Security. That July, Auditor General Frank Mautino released a compliance report covering July 2017 through June 2019 that showed IDES didn’t properly classify data to protect it from cyber attacks.

Around then, Gov. JB Pritzker named Kristin Richards as the agency’s permanent director to replace acting director Tom Chan, who had presided over a tumultuous four months of historic claim spikes owing to the COVID-19 pandemic. Not helping matters, Illinoisans also got caught up in a nationwide fraud scheme connected to the federal Pandemic Unemployment Assistance program.

Faced with unprecedented demand that totally overwhelmed staff and systems, IDES developed a system allowing claimants to sign up to be called when an agent was available instead of simply waiting on hold. But many still waited, not just hours but several days.

Last week, Mautino dropped another bad news bomb: a performance audit showing the state overpaid benefits in the first 18 months of COVID-19, up to $5.2 billion, “with much of it paid to fraudulent claimants,” per Capitol News Illinois, which cited examples like $6 million to 481 dead people and $40.5 million in checks sent to people in prison.

(To read all 156 damning pages, visit tinyurl.com/IDESaudit23.)

The audit blamed the fraud on scrambling to erase those backlogs. Rather than checking unemployment claims against five databases to verify eligibility, the state suspended certain checks to issue payments. A weakened defense system understandably drew attention of malevolent actors.

That reflects vulnerabilities within the federal program, which the audit said accounted for $3.2 billion of the fraud total. PUA, enacted to provide fully-funded benefits to independent contractors and others whose claims aren’t checked against a regular employer, was ripe for schemes from people using stolen identities, fake debit cards and direct deposit shenanigans.

On July 22, 2020, Pritzker said “the national program was poorly designed and susceptible to fraud” and reaction to the 2023 audit reflects that longstanding contention. But Mautino’s new report also indicated Illinois failed to follow federal recommendations issued in May 2020. It took until September 2021 for IDES to implement Integrity Data Hub, a multi-state crossmatching tool.

“We were trying to get money out the door to people who had lost their jobs because, frankly, people were getting sick and dying,” Pritzker said Thursday. “We wanted to make sure they could survive so we could have jobs for them at the end of the pandemic.”

Money isn’t more important than people, but huge financial holes hamper future aid efforts, which makes balance crucial. Here’s hoping our leaders learn from these mistakes.

• Scott T. Holland writes about state government issues for Shaw Media. Follow him on Twitter @sth749. He can be reached at sholland@shawmedia.com.