Peoria Standard

State Sen. Win Stoller (R-Germantown Hills) has taken to social media to express his deep concern and dismay over the shocking findings of an audit report on the Illinois Department of Employment Security (IDES). 

According to the audit, IDES has been estimated to have improperly overpaid unemployment benefits to a mind-boggling sum of over $5 billion, a revelation that Stoller finds nearly unfathomable on its own.

“Merely on the surface, the fact that this audit reveals that IDES was estimated to have improperly overpaid unemployment benefits to the tune of more than $5 billion is nearly unfathomable,” Stoller said on Facebook. “However, it only gets worse the more you dive into the full report – doing so reveals that IDES made over 10,000 payments to deceased individuals, more than 90,000 payments to incarcerated individuals, and intentionally turned off fraud detection safeguards.” 

Stoller dubbed the unnecessary expenses a "disastrous mismanagement by the Pritzker administration.” 

“To top it off, out of this $5 billion, only roughly ten percent has been recovered by the state," Stoller said. "Additionally, the state borrowed $4.5 billion from the federal government for unemployment benefits, only for us to find out in this report that money was essentially used to cover fraud.”

Gov. J.B. Pritzker himself refused to discuss the report, instead pointing to IDES. In response, IDES spokeswoman Rebecca Cisco called out the administration of former president Donald Trump who she said required the state to use “a poorly designed and brand new unemployment insurance program on their own in record time with continuously changing federal guidance,” according to Chicago Tribune. However, the actual audit paints a different story, placing the responsibility directly on Pritzker and IDES. 

“IDES was not prepared to respond to the needs created by the pandemic,” the report from Auditor General Frank Mautino’s office stated. “IDES did not have a plan for responding to recessions and potential surges in claims.”

The performance audit conducted by the Office of the Auditor General highlights key findings related to the unemployment programs administered by the Illinois Department of Employment Security during the period of March 1, 2020, to Sept. 6, 2021. The audit reveals significant issues with overpayments, including fraud and identity theft, totaling $5.24 billion in the Pandemic Unemployment Assistance (PUA) and regular Unemployment Insurance (UI) programs. The report also identifies challenges IDES faced during the pandemic, such as delays in processing claims and susceptibility to fraud due to suspended defenses. The audit report contains seven recommendations for IDES to improve its operations and prevent future issues with unemployment benefits distribution. The report’s key findings detail the fraud undertaken.

“Overpayments (which include fraud, non-fraud, and identity theft) were an issue in both the regular UI and PUA programs. IDES reported overpayments for FY20 to FY22 that totaled $5.24 billion; regular UI accounted for $2.04 billion and PUA accounted for $3.20 billion,” the performance audit reads. “Considering gross benefits associated with regular UI claims were 2.5 times higher than gross benefits associated with PUA claims, it shows the magnitude of fraud experienced in the PUA program. IDES noted stopped or recovered payments of $150.36 million and $361.34 million for the regular UI and PUA programs respectively.”

Mautino further found IDES failed to maintain appropriate records. The audit found IDES failed to maintain accurate and complete accounting records and supporting documents for the Trust Fund, raising concerns about the internal controls safeguarding Trust Fund assets. As a result, auditors were unable to determine the opening net position and activity for the year ended June 30, 2022, impacting the statements of revenues, expenses, and changes in net position and cash flows. The audit also highlighted the Department's mishandling of Pandemic Unemployment Assistance (PUA) claimant data, leading to challenges in assessing claimants' eligibility. Additionally, improper recording of receivables and mismanagement of overpayment receivables were noted, prompting the need for better financial reporting controls, according to the Office of the Auditor General's report.