Sneak Preview: DOL OIG Seeks Easier Access to Data for UI Audits
(The following was excerpted from a recent Thompson Grants 360 article.) The Department of Labor (DOL) Employment and Training Administration (ETA) plans to update its guidance to no longer require state workforce agencies (SWAs) to enter into Unemployment Insurance (UI) data sharing agreements with the DOL Office of Inspector General (OIG) when OIG is conducting fraud investigations, in response to a recent OIG alert memorandum to ETA officials. However, the memorandum urges ETA to do more to remove any constraints limiting OIG access to this information, particularly when OIG conducts UI audits.
ETA in December 2016 issued Unemployment Insurance program letter (UIPL) 04-17 explaining that pursuant to agency regulations at 20 C.F.R. §603.6(a) governing the disclosure of confidential unemployment compensation information, SWAs are required to disclose UI information to OIG “solely for the purpose of investigating fraud in the UI program,” but not for audits, adding that SWAs must enter into a data sharing agreement with OIG before providing such disclosures. While the UIPL states that this information is “necessary for the proper and efficient administration” of the unemployment compensation program for fraud investigations, agency regulations at 20 C.F.R. §603.5 does not apply the same standard to OIG audits and does not require SWAs to disclose UI information to OIG auditors.
OIG, in the alert memorandum, said that this limitation is contrary to the Inspector General Act (Pub. L. 95-452), as amended, which authorizes OIG to obtain UI information for all purposes (e.g., audit and investigative) to prevent and detect fraud, waste and abuse within the program. “These disclosure limitations have prevented the OIG from obtaining critical UI claim and wage data needed to conduct timely investigative and audit work and fulfill our oversight responsibilities,” OIG said.
To obtain SWA UI information, OIG issued subpoenas in June 2020 and in December 2020 to 54 SWAs requiring them to provide UI claim and wage data, in which OIG identified about $13.4 billion in potentially fraudulent UI benefits. “It took about four months for all the SWAs to provide the data and our data scientist to follow up with SWAs to ensure the data was complete and in a usable format,” OIG noted. “The delays associated with subpoena issuance versus direct unencumbered access to data equates to the lack of detection and prevention of billions of dollars in potentially fraudulent claims at the earliest opportunity.”
OIG also explained that as ETA developed UI programs last year to respond to the COVID-19 pandemic, the agency asked OIG to coordinate on draft guidance to SWAs regarding disclosure of pandemic-related UI information to the OIG for investigative purposes only. Although OIG provided feedback to ETA expressing that its current guidance to SWAs does not permit SWAs to provide OIG access to UI information for both audits and investigations, the agency still did not amend its prior guidance in UIPL 04-17, nor did it issue new guidance related to the disclosure of pandemic unemployment information to the OIG.
(The full version of this story has now been made available to all for a limited time here.)
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