Editorial: Fix flaws at unemployment agency

The Detroit News

If you recently filed for unemployment insurance in Michigan, your request may have been tagged as fraudulent. That’s because the Unemployment Insurance Agency’s automated computer system has been erroneously accusing unemployment applicants of cheating, which means the state can garnish wages or fine them.

It’s a serious problem that needs to be fixed.

Thousands of requests for unemployment insurance over at least the past year have incorrectly been designated as fraudulent, according to a recent Michigan Auditor General report.

It’s important to note the majority of applications — 93 percent — filed from from July 2014 to July 2015 were approved by the agency with no issues or appeals, according to Stephanie Comai, director of the Michigan Talent Investment Agency, which houses the unemployment agency.

But of the 7 percent that were challenged, only 8 percent actually constituted fraud upon closer review. That means there are some flaws in the system.

The report also found the agency failed to answer almost 90 percent of incoming calls from applicants seeking assistance. The agency claims its answer rate was more like 50 percent, and that it provides other tools for customers to reach it, such as smartphone apps and online chat help features.

Comai says, “We have addressed or are addressing all the audit findings,” and noted that the agency is finally meeting federal standards for responsiveness and timeliness in issuing checks. That hadn’t been the case in years past.

And in 2011, the auditor general found the agency was actually too lax in identifying fraudulent claims.

Correctly determining each unemployment application would be the best solution, and that’s the standard for the agency to live up to.

U.S. Rep. Sander Levin recently wrote a letter to Gov. Rick Snyder asking for a fix. The Democrat from Royal Oak contends $57 million has been collected in fines and garnished wages from state residents, and much of that might have been a mistake.

Comai said the agency has cleared the backlog on reimbursing those falsely accused, and will continue to do so.

But the agency’s wrongful determinations put unemployment applicants in an even worse predicament once the state garnishes assets or fines them.

The report found the agency doesn’t adequately inform citizens why they’ve been accused of fraud, or communicate with them about ways to resolve questions the agency might have.

Even outgoing mail is an issue for the agency, which spent $3.8 million on postage in 2014 only to receive back almost half a million undeliverable items. In some cases, the agency continued to send mail to businesses that had been legally dissolved.

A House Bill introduced last fall would require the agency to take more deliberate steps before charging a claimant or employer with fraud and also would explicitly prohibit a determination of fraud based solely on a computer analysis.

Even though the agency says these changes are already in progress, it would be best to put it in the law.

The House Fiscal Agency found the bill would have “a significant, yet indeterminate, fiscal impact” on the agency because of the investments needed to its information technology systems.

But citizens deserve to be treated fairly in a system that claims it’s there to help them through rough times.