Mississippi audit shows nearly $118M in unemployment incorrectly paid out during pandemic

MISSISSIPPI — The Mississippi Department of Employment Security incorrectly paid out nearly $118 million in unemployment benefits during the early days of the COVID-19 pandemic, according to a report from the State Auditor’s Office.

Some of the payments were cases of stolen identity and international fraud schemes.

According to the report, some payments went to people who had never lost their jobs and people who were in jail.

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“It’s more important than ever to understand the mistakes that were made when money was flowing so freely during COVID,” Mississippi State Auditor Shad White said in a statement included in the report.

According to the report, the Department of Employment Security can’t yet determine how much unemployment money was given to fraudsters and how much was incorrectly paid to people who made mistakes when filing for benefits.

The auditor’s report suggests many of the wrong payments went undetected by MDES because staff was overwhelmed by the number of unemployment claims.

MDES waived most of the usual criteria for Mississippians to receive unemployment benefits, making it easier for people to defraud the state, the report says.

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One of the criteria lifted during the onset of the pandemic was that claimants must actively search for work while receiving unemployment benefits. Because the requirement was set aside, applications were approved en masse, leading to inmates receiving benefits, according to the auditor’s report.

Additionally, the system that checks Social Security numbers to verify a person’s identity was down during the early months of the pandemic, making it easier to collect benefits using a false identity.

It’s not clear how much of the $118 million is state money and how much of it was federal assistance.

Any overpayments of unemployment benefits after June 2020 will be publicly accounted for in next year’s audit, according to the report.

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Mississippi is not the only state to determine it paid unemployment benefits to people who were ineligible to receive the money.

California and New York lost hundreds of millions, if not billions, to fraudsters, the report says.

A report from Iowa’s Workforce Development program director showed that state paid out at least $30 million in fraudulent claims, the report says.