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State audit reveals Ohio spent $3.8 billion on unemployment fraud and overpayments

Posted at 5:51 PM, Oct 28, 2021
and last updated 2021-10-28 18:31:12-04

CLEVELAND — After a year of questions and frustrations surrounding unemployment fraud, a state audit shows the Ohio Department of Job and Family Services spent $3.8 billion on overpayments or money sent to the wrong person.

Larid Jones is one of the thousands across Ohio that dealt with the consequences of unemployment fraud during the pandemic.

“I was collecting unemployment due to the pandemic and everything. and with so much fraud or identity theft going on, they basically froze everyone's account,” said Jones.

With no explanation, his payments were halted for four months. He then called the Ohio Department of Jobs and Family services multiple times to try to fix the problem and prove his identity.

“Every time I forwarded the information to them, it got lost in the shuffle,” said Jones.

But he was left in the dark forced to find other ways to make ends meet.

On Thursday, a state audit brought some answers, revealing the state dished out $3.8 billion in mistakes. When you break that down, it's $475 million to criminals and $3.3 billion in overpayments.

They blame the mispayments on an “outdated, overwhelmed and ill-prepared” unemployment system. It’s a problem that was identified before the pandemic and overlooked by multiple administrations.

“As the auditor pointed out, and as we've talked about in the past, many of the issues regarding processing time were due to the antiquated technology of our system prior to the pandemic,” said the ODJFS Director Matt Damschrode.

The department says they have made changes and added new systems.

“We now use a robust suite of cybersecurity fraud prevention tools, including industry-leading solutions from LexisNexis, Experian and F5 + Shape,” said Damschrode.

He said over the past eight months, they have seen drastic improvements as they continue to fix past mistakes.

One of those corrections includes Jones, who finally got his check after four long months. He now hopes it won’t be an issue again.

“I mean, I’m glad to hear accountability, I just wish that some people would have had more common sense about it,” said Jones.

The department says the payments will come from federal dollars and won't affect Ohioans' taxes, stating the new systems will be launched within the year.

OSJFS tells nNws 5 they are up to date on unemployment claims, but are still working on 540,000 potential fraudulent claims.

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