Report: Unemployment agency still needs to improve communication, services

Beth LeBlanc
The Detroit News

Lansing — An audit released Tuesday found the state’s embattled Unemployment Insurance Agency has partially complied with recommendations made four years ago to improve communications with claimants and help them to find re-employment. 

The follow up report from Auditor General Doug Ringler found the agency had not fully complied with recommendations to enhance communication with current and prospective claimants, had not fully improved its efforts to meet federal performance standards and had not fully evaluated and improved its re-employment services. 

The agency, however, has complied with the 2016 recommendation to improve adjudication related to allegations that claimants had provided false or misleading information to the agency, the audit said.

The report comes about four years after the state found an automated computer system, the Michigan Integrated Data Automated System, had falsely accused thousands of people of unemployment fraud between October 2013 and August 2015, prompting a class action lawsuit that is still ongoing and the state to pay back millions to the falsely accused in the interim.

The April 2016 audit that prompted the Tuesday follow up report was conducted before that false fraud allegations came to light, but it noted even then that the unemployment agency needed to provide claimants with “facts and rationale” when it accused them of providing false or misleading information. 

“… these improvements will help claimants better understand the allegations against them to make informed decisions on their next course of action,” the April 2016 audit said. 

The audit also pinged the agency’s lack of timely and comprehensive communication with claimants, its failure to meet federal performance standards and inadequate re-employment services. 

Between October 2018 and June 2019 — the period reviewed for the follow up report — the agency paid roughly $602.1 million in unemployment benefits to 200,740 claimants and spent about $119.9 million on administrative expenses. The agency employed about 635 people as of June 2019.

In that time period, the agency found marginal improvements, but still cited partial compliance or non compliance with four of the 2016 recommendations.

The 2016 audit found 89% of telephone calls didn’t make it to the agency’s call center and claimants abandoned 29% of the answered calls after they were put on hold. 

UIA reports from a sampling of six business weeks between August 2018 and June 2019 found that 21% of the 311,186 calls were routed to a customer service queue and 28% of those routed calls were abandoned when the customer was put on hold, according to the audit. 

The UIA didn’t have data on what happened to the other 79% of calls taken during those six weeks — whether they were successfully answered, left unanswered or ended by the caller. 

The audit also found that the agency’s rate of paying initial benefits had only marginally improved between what was observed in 2015 and in 2018.  For nine of the 12 months reviewed in the 2018-19 fiscal year, the agency “did not make at least 87% of all initial benefit payments within 21 days.”

The audit recommended the agency “continue to take action to consistently meet federal performance standards related to initial benefit payments and nonmonetary determination processing.”

The agency agreed with the recommendation in Tuesday’s audit and said it had made improvements with the aim of complying with the federal standards and is working with the National Association of State Workforce Agencies Integrity Center to improve the state’s performance further. 

The agency also promised to better its re-employment services through an interagency agreement with the Department of Technology, Management and Budget “to collect, develop and analyze workforce, economic, demographic and labor market information in support of initiatives designed to strengthen Michigan's unemployment insurance and workforce systems.”

“The purpose is to supply customized, evidence-based information and analysis to support effective decision-making, program management and oversight of workforce/talent development efforts in the state,” the agency wrote in its response. 

The class action suit against the state regarding the false accusation of unemployment fraud against more the 40,000 individuals was appealed to the Michigan Supreme Court last month. 

The state has asked the high court to rule on whether the state violated claimants due process rights when it seized money and properties without proper notice in response to mistaken accusations of unemployment fraud. 

The Court of Appeals ruled in December that the state had violated the victims’ due process rights through a standing government policy, but Court of Appeals Judge Michael Gadola opined the Supreme Court should clarify when it is appropriate for a judge to award damages in such a case, both in the interest of the unemployment case and in the interest of ongoing litigation related to the Flint water crisis.

Nessel’s office argued in its January motion to appeal to the Supreme Court that asking a judge to award damages "would allow for the violation of the separation-of-powers doctrine by permitting courts to authorize sizable awards of money damages without legislative authorization."

The agency has pegged the cost of reimbursing those falsely accused because of a software glitch at $21 million, but plaintiffs' lawyers in the case say the total comes to more than $60 million.