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House lawmakers hear from state unemployment agency over 5th pandemic-related audit

Main gallery of the Michigan House of Representatives
Lester Graham
Michigan Radio

Leaders of Michigan's Unemployment Insurance Agency appeared before a joint meeting of the House Ethics and Oversight Committee and the House Labor Committee Thursday. They discussed the findings of an audit into the department’s ability to catch fraud during the height of the COVID-19 pandemic.

That December 2023 report from Michigan’s Office of the Auditor General found the state was falling short in those goals, undercalculating penalties and wrongly paying people who were dead or incarcerated.

UIA Director Julia Dale blamed several issues, like frequent leadership turnover, staffing shortages, and a faulty computer system.

Dale took over as head of the agency about halfway through the audit. She assured lawmakers it’s in a better place now than during the height of the pandemic.

“What we are doing is building muscle memory and accountability and ownership and systems and processes that are well documented and detailed so that people know what their responsibility is and what they need to do when things go wrong,” Dale said.

Among the biggest changes Dale helped implement since taking over the agency in late 2021 is the transition to a new computer system developed by the company, Deloitte. The old system, known as MiDAS, has become known for glitches and errors like falsely accusing people of fraud and removing their benefits.

Dale said the UIA is working with Deloitte to ensure a planned two-phase implementation for the new system goes well.

“This is a high stakes game for UIA because of the history of failing systems that had those false fraud findings. And, while I wasn’t in this seat when that occurred, I was in this seat when we negotiated those settlement agreements and I’m very aware of those stories of how people were impacted,” Dale said.

Her testimony was enough to win over Democratic lawmakers on the committees.

“I feel that she has done a really good job of acknowledging some of the challenges that occurred during the COVID era and has worked to kind of build up and build out a team that can manage kind of the day-to-day intake now,” House Ethics and Oversight Committee chair Erin Byrnes (D-Dearborn) told reporters.

Republican lawmakers, however, are still skeptical. They say they still haven’t seen enough accountability from the agency to believe things will be better.

“There’s known fraud. We’re paying dead people, and we didn’t go back after the money. "We talk about, ‘Oh, the ship is turning.’ We need dramatic changes right now,” Committee Minority Vice Chair Tom Kunse (R-Clare) said after the meeting.

This is the fifth and final audit in a series from the Auditor General about the agency’s handling of the pandemic. A fourth audit, which came out in January 2023 did not receive any followup from either of the legislative oversight committees.

Representative Mike Harris (R-Waterford) said the UIA needs consistent oversight to ensure accountability.

“We are bleeding millions and millions of taxpayer dollars, and who’s responsible for that? Ultimately, I think we are. And if we are not holding the bureaucratic people responsible for letting that money go, shame on all of us,” Harris said.

As far as potential followup reporting goes, though, representatives from the Auditor General’s office who spoke during Thursday’s meeting indicated there are no immediate plans for more audits.

“We had pretty exhaustive scopes for the five reports we did. I think we will resume our efforts in a couple of years after the agency has had a chance to implement their new system,” Audit Division Administrator Bryan Weiler said during the hearing.