Sneak Preview: ETA Provides $200M To Boost UI Program Integrity
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The Department of Labor (DOL) Employment and Training Administration (ETA) recently issued guidance notifying states that it is making up to $200 million in American Rescue Plan Act (ARPA) (Pub. L. 117-2) funding available to help them strengthen Unemployment Insurance (UI) program integrity through strategies such as ID verification, fraud prevention and detection, and overpayment recovery. The guidance also addressed “required” and “strongly recommended” steps that states should implement to promote UI fraud risk mitigation and improper payment reduction.
Submissions for funding under the guidance (UI Program Letter No. 22-21, Change 2) are due to ETA by July 26, and must include a budget narrative, grant application, Standard Form (SF) 424 and SF-424A. As a condition of receiving funding, states must refer allegations that they reasonably believe constitute unemployment compensation (UC) fraud, waste, abuse, mismanagement or misconduct to the DOL Office of Inspector General to enable OIG to investigate fraud and perform audits of payments made under the program up to Dec. 31, 2025. They also will be required to report on the quarterly progress and implementation of each project/activity to their ETA regional office.
ETA noted that COVID-19 pandemic relief legislative packages created new temporary pandemic UC programs with new eligibility requirements for individuals not typically eligible for UI benefits. Many states were challenged by antiquated UI information technology (IT) systems and/or were in the process of modernizing their IT systems, while also aiming to provide assistance quickly to beneficiaries under these UC programs. Fraud attacks within these programs were frequent, making them susceptible to high levels of improper payments (see “Fed Records $248B Improper Payment Level for 2022, but May Be Higher”). ETA issued a guidance notice (UI Program Letter No. 22-21) in August 2021 making available $140 million total in ARPA funding to assist states with fraud prevention and detection.
States receiving funding under this new guidance are required to implement integrity controls to address UI fraud prevention and detection and overpayment recovery. However, simply deploying a fraud prevention and detection tool or implementing an ID proofing solution should not be the only action a state takes, ETA stressed. “States are expected to consider where in the UI process a tool, solution or resource is best used and how investigations will be prioritized to reduce improper payments,” it added. “These tools, strategies and activities should undergo continuous review and data analysis for effectiveness and to ensure equitable access for legitimate claimants. Additionally, these reviews should provide an opportunity for continuous evaluation to ensure timely and accurate payments to eligible individuals.”
(The full version of this story has now been made available to all for a limited time here.)
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