Quincy Reporter

State Rep. Randy Frese (R-Quincy) has expressed concern over the findings of an audit revealing more than $5 billion in fraudulent or excessive unemployment claims paid out by the state over a two-year period. 

According to Frese, this figure is likely an underestimated amount, as auditors continue to uncover additional fraudulent payments that have yet to be fully accounted for.

“The audit revealed that the State paid out more than $5 billion in fraudulent or excessive unemployment claims over two years. What’s worse, is that the $5 billion is just an estimate, and likely a lowballed one, according to auditors who are still trying to account for all the fraudulent payments,” Frese said. 

Many have had difficulty in processing claims during the COVID-19 pandemic and Frese's constituents were no exceptions. The representative is calling out for answers on the inefficiency.

“Throughout the pandemic and economic shutdown, families in my district and across the state struggled to make contact with anyone at IDES to help them with legitimate unemployment claims. IDES offices were closed, those needing help could not get anyone on the phone, and the IDES online process was a complete disaster. Hardworking families put on the unemployment line by Governor Pritzker’s shutdown had to wait months to even begin their unemployment claims,” Frese said. “Now that workers and job creators are on the hook for this incompetence, there must be more insight to right the mismanagement and repeated failures at IDES.” 

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 the Chicago Tribune. 

The audit places the responsibility on 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 some key findings related to the unemployment programs administered by the Illinois Department of Employment Security from 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.”

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 not able 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 summary report digest from the Office of the Auditor General. 

Read the Auditor General’s audit, report, and findings here.

Frese represents the 94th district, located in Western Illinois along the Mississippi River, which includes all or parts of Adams, Henderson, Hancock, and Warren counties.