Auditor reports $590M in unemployment fraud

Published 7:00 am Wednesday, September 13, 2023

A report released last week by State Auditor Shad White shows more than $590 million in unemployment compensation was misspent in Mississippi alone during the COVID-19 pandemic. 

The U.S. Department of Justice has called the unemployment fraud around the nation during COVID unprecedented. 

The report also highlights the Office of the State Auditor’s use of advanced data analytics tools such as geospatial and multi-datapoint analysis to investigate widespread fraud.

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“The pandemic response resulted in a historic amount of taxpayer money wasted. Some of this money is simply gone forever,” said White. “But my office is using the fraud as an opportunity to use new audit tools, like advanced data analytics that will hopefully pay dividends in the future.”

In fiscal year 2020, unemployment claims in Mississippi ballooned to over $2.1 billion from the previous year’s $59.6 million – a 3,500 percent increase. These increased benefits resulted in massive fraud and misspending.

One reason the fraud occurred is the Mississippi Department of Employment Security (MDES) bypassed or altered its fraud-prevention systems. For instance, MDES did the following:

  • waived the need for social security number verification on claims approvals
  • waived the one-week waiting period for unemployment claims
  • waived the requirement for applicants to show they were searching for work
  • increased the Weekly Earning Allowance increase from $40 to $200
  • altered the requirement that applicants show separation from all employers