Kane County Reporter

State Rep. Dan Ugaste (R-Geneva) has condemned the handling of the unemployment system in Illinois during and after the COVID-19 pandemic, labeling it a complete disaster. 

“Our unemployment system during and following the COVID pandemic has been nothing short of a disaster,” Ugaste said in a press release. “This report and IDES’ lack of accountability is atrocious. The outdated system that was supposed to help Illinoisans during a critical time, while protecting State funds, is frankly embarrassing. System updates recommended by the Department of Labor to prevent such problems still have not been implemented."  

"We need to call hearings in the General Assembly to get to the bottom of this and find out what we can do so this never happens again. Our constituents trust us to protect them and their money in Springfield; we owe it to them to get answers.” 

IDES spokeswoman Rebecca Cisco called out the administration of former President Donald Trump, who, she said, required the state to use “a poorly designed and brand new unemployment insurance program on their own in record time with continuously changing federal guidance,” according to the Chicago Tribune. 

The audit places the responsibility on IDES. 

“IDES was not prepared to respond to the needs created by the pandemic,” the report from Auditor General Frank Mautino’s office stated. “IDES did not have a plan for responding to recessions and potential surges in claims.”

The performance audit conducted by the Office of the Auditor General highlights some key findings related to the unemployment programs administered by the Illinois Department of Employment Security from March 1, 2020, to Sept. 6, 2021. The audit reveals issues with overpayments, including fraud and identity theft, totaling $5.24 billion in the Pandemic Unemployment Assistance (PUA) and regular Unemployment Insurance (UI) programs. The report also identifies challenges IDES faced during the pandemic, such as delays in processing claims and susceptibility to fraud due to suspended defenses. The audit report contains seven recommendations for IDES to improve its operations and prevent future issues with unemployment benefits distribution. 

The report’s key findings detail the fraud undertaken.

“Overpayments (which include fraud, non-fraud, and identity theft) were an issue in both the regular UI and PUA programs. IDES reported overpayments for FY20 to FY22 that totaled $5.24 billion; regular UI accounted for $2.04 billion and PUA accounted for $3.20 billion,” the performance audit reads. “Considering gross benefits associated with regular UI claims were 2.5 times higher than gross benefits associated with PUA claims, it shows the magnitude of fraud experienced in the PUA program. IDES noted stopped or recovered payments of $150.36 million and $361.34 million for the regular UI and PUA programs respectively.”

The audit found IDES failed to maintain accurate and complete accounting records and supporting documents for the Trust Fund, raising concerns about the internal controls safeguarding Trust Fund assets. As a result, auditors were not able to determine the opening net position and activity for the year ended June 30, 2022, impacting the statements of revenues, expenses, and changes in net position and cash flows. The audit also highlighted the Department's mishandling of Pandemic Unemployment Assistance (PUA) claimant data, leading to challenges in assessing claimants' eligibility. Additionally, improper recording of receivables and mismanagement of overpayment receivables were noted, prompting the need for better financial reporting controls, according to the summary report digest from the Office of the Auditor General. 

Read the Auditor General’s audit, report, and findings here.