COLUMBUS, Ohio – The U.S. Department of Labor announced Friday the availability of $653 million in federal grants for states to upgrade their unemployment insurance technology systems.
It comes in the wake of a pandemic that exposed glaring weaknesses in states’ unemployment systems. States including Ohio experienced lag times for abruptly unemployed workers who deserved benefits, while scammers ripped off residents residents and walked away with vast sums of public dollars.
All but $53 million of the federal money goes to states to upgrade unemployment systems and improve their delivery and claims services. The rest goes for IT modernization.
The money came via the American Rescue Plan of 2021, which was passed by congressional Democrats and signed by President Joe Biden.
In Ohio, unemployment scams grew so prevalent that the governor and lieutenant governor were both included among the victims.
According to the state Department of Jobs and Family Services, Ohio’s unemployment insurance computer system dates back to around 2004. The federal government determined that Ohio fared third worst in terms of states promptly paying out unemployment benefits during the early weeks of the coronavirus, although its standing has since improved according to federal data analyzed by NBC News. As of early 2021, Ohio faced about 1.4 million claims for Pandemic Unemployment Assistance claims, about half of which officials deemed fraudulent.
The state was in the process of contracting out an $86 million upgrade to its systems but shelved the project after top officials from its contractor were indicted on charges of stealing trade secrets.
According to the U.S. Government Accountability Office, which audits the federal government, the four congressionally created pandemic unemployment insurance programs yielded an estimated $60 billion in fraud between April 2020 and January 2023.
Jake Zuckerman covers politics and policy for Cleveland.com and The Plain Dealer.