The New York Division of State Government Accountability (DSGA) released the results of an audit of the state’s unemployment insurance system on November 15 that indicated over $11 billion were lost to fraud between April 2020 and March 2021.
During that time, the audit said the state paid about $76.3 billion in total unemployment insurance payments. The DSGA also noted the federal government’s estimate of New York’s unemployment insurance fraud rate rose to 14.48% from the previous financial year’s 4.51% estimate. If the federal government’s fraud rate estimate is accurate, about $11 billion were lost to fraud between April 2020 to March 2021.
The DSGA report also said Department of Labor officials ignored reports in 2010 and 2015 that warned of outdated unemployment insurance digital infrastructure. New York Comptroller Thomas DiNapoli said in a statement that the labor department’s outdated software left the state unprepared for the volume of unemployment insurance claims during the pandemic, so “[t]he agency resorted to stop-gap measures to paper over problems, and this proved to be costly to the state, businesses, and New Yorkers.”
