State audit shines light on Illinois' $25 million unemployment boondoggle

CHICAGO (CBS) - A new report finds problems with the state's $25 million system for pandemic unemployment systems that may explain why the Illinois Department of Employment Security can't calculate fraud.

The Fiscal Year 2021 report from the Illinois Auditor General's office found the Illinois Department of Employment Security failed to "maintain accurate and complete Pandemic Unemployment Assistance [PUA] claimant data." As a result, auditors were unable to verify whether any of IDES' reported financial statements were accurate. 

The CBS 2 Investigators have been asking IDES another money question for years. How much of your tax dollars did the agency pay out in fraudulent benefits? 

The agency has refused to give us a number, saying instead, they're working on it. CBS 2 recently uncovered $1.2 million dollars in fraud that the agency had no idea an employee was actually tracking. The information came from regular unemployment claimants filing documents called 'payment tracers' when scammers stole their benefits. 

IDES first told us the agency was not tracking this information. After our initial reporting, they found an employee who actually was keeping track.

But, the broader fraud happened in the federal PUA program. That program provided unemployment benefits for the first time to gig workers and the self-employed who lost their jobs during the pandemic. 

Now, 27 months after the pandemic began, IDES has yet to provide any detailed information on how many fraudulent claims and how much taxpayer money was lost from that PUA program.

CBS 2 asked the Illinois Auditor General if the issues it found with the PUA system in Illinois could be preventing IDES from figuring out how much money was lost to fraud. 

"While we cannot speak with any certainty to the cause of the Department's challenges regarding calculating the extent of fraud, it is our opinion that the inability of the Department to provide complete and accurate PUA claimant data to our auditors indicates that it would be very difficult to calculate, with any certainty, the extent of fraud in the PUA system," the auditor general's office said.

IDES' response to today's report indicates they are continuing to work on fixing problems with the system, which was built, operated and maintained by Deloitte.

Comptroller records show Illinois has paid Deloitte $25 million dollars so far to run the system. 

Read the full Auditor General Report here.

Read IDES' full response to the report findings here.

In:
• Unemployment
• Pandemic
• Illinois Department of Employment Security