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UNEMPLOYMENT INSURANCE: Enhanced Focus on Program Integrity Could Reduce Overpayments

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Our work shows that of the 30 billion in Ul benefits paid in calendar year 2001, Labor estimates that this includes about 2.4 billion in overpayments, including 560 million attributable to fraud or abuse. Labors analysis also suggests that the states could have detected andor recovered about 1.3 billion of the total overpayments given their current policies and procedures. Labor based these estimates on data from its quality assurance system, which involves an in-depth analysis of individual Ul claims in each state. Labors quality assurance data document numerous categories of overpayments, including individuals who work while receiving benefits, or misrepresent their identity. Other sources of overpayments include agency errors and inaccurate or untimely information provided by employers. Our work shows that management and operational practices at both the state and federal level contribute to overpayments in the Ul program. At the state level, many states place a higher priority on quickly processing and paying Ul claims than on taking the necessary steps to adequately verify claimants initial and continued eligibility for Ul benefits. As a result, we found that many states do not adequately verify information reported by claimants. At the federal level, we found that Labors policies and directives emphasize quickly processing and paying claims, with only limited attention given to payment accuracy. While we recognize the importance of paying benefits to individuals in a timely manner, Labors performance measurement system does not provide sufficient incentives and sanctions for states to balance the need for payment timeliness with the need for payment accuracy.

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  • Administration and Management
  • Economics and Cost Analysis

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