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More than $3.8 billion in unemployment benefits mishandled by ODJFS, audit finds

More than $3.8 billion in unemployment benefits was misspent due to what a state auditor says was “a lack of controls” on behalf of ODJFS.

COLUMBUS, Ohio — More than $3.8 billion in unemployment benefits was misspent due to what a state auditor says was “a lack of controls” on behalf of the Ohio Department of Jobs and Family Services.

State Auditor Keith Faber said changes to federal requirements during the pandemic are partly to blame for ODJFS allowing more than $475 million to be fraudulently paid, as well as an additional $3.3 billion in overpayments.

The audit found 26% of all unemployment payments were potentially overpayments or paid to fraud accounts in the fiscal year ending in June 2021. Prior to 2020, that number accounted for roughly 3.5% of all payments. 

“It’s appalling that Ohioans in need were victimized not only by a pandemic that ravaged our economy, but by criminals who took advantage of a system that was outdated, overwhelmed and ill-prepared for the onslaught of unemployment claims caused by COVID,” said Auditor Keith Faber. 

According to Faber, ODJFS “neglected” to acknowledge the mistakes until hundreds of millions of dollars in money had been misspent. 

The Ohio Department of Jobs and Family Security director Matt Damschroder issued a statement in response to the audit Thursday, saying in part: “The audit confirms the unprecedented surge in claims and accompanying fraud caused by the pandemic, and the recommendations align with the work already underway in addressing the issues we faced.”

Damschroder said ODJFS continues to implement new strategies to fight further issues, including adding new tools to detect fraud and implementing new cybersecurity programs. 

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