COLUMBUS (WCMH) — The Ohio Department of Job and Family Services will spend $1 million to find the source of a problem that’s already cost taxpayers hundreds of millions of dollars.
According to ODJFS Director Kimberly Henderson, the agency identified $330 million in overpaid unemployment benefits due to fraud. She said the amount of potentially fraudulent claims that were flagged before they were paid out could be nearly double.
Henderson said the agency has hired an outside firm to look for ways to fix Ohio’s unemployment system, as Ohioans continue to be targeted by scammers.
Nancy Grilli said she didn’t think much of it when two letters from ODJFS arrived at Signature Millshop in mid-February.
The letters asked for separation information for former employees of the Columbus commercial cabinet business, which Grilli owns with her son.
Thirty-one more letters showed up the next day.
“There’s something seriously wrong—seriously wrong with this unemployment system,” said Grilli. “We have 13 employees. We’ve never laid anybody off.”
Grilli said she did not recognize any of the employee names on the letters, some of which appeared to be duplicates.
Unable to reach ODJFS on the phone for assistance, Grilli said she called the company that handles unemployment claims for her business. She was told to write “FRAUD” on each letter and fax it to ODJFS. The process took hours, she said.
“If I wouldn’t take the time to do all this – and hopefully they process them correctly – all of this could go against our unemployment record, which would then cost us money in the future,” Grilli said.
The following week, Grilli got another 22 letters.
“I’m mad. I really am,” Grilli said. “This is just not right.”
Since March, ODJFS has been overwhelmed by jobless claims.
During remarks to state lawmakers earlier this month, Henderson said the agency was “unprepared for the unexpected crush of claims as a result of our response to the pandemic,” pointing to understaffing and “antiquated technology” as causes.
These issues have left the unemployment system vulnerable to fraud, as the agency works to provide aid to people who legitimately need it.
“It is a challenge, and it is a balancing act,” Henderson said. “We still always want to lean to the greatest degree that we can in favor of getting benefits into the hands of those that are eligible for them and need them as quickly as possible.”
ODJFS hired a private, third-party firm to help.
A request to speak to executives at Cincinnati-based Russell Allen Partners was forwarded to ODJFS, which declined.
According to the $1 million contract between the State of Ohio and Russell Allen Partners, the firm will analyze the state’s unemployment system, delivering monthly reports and developing plans to fix the problems it identifies. The contract lasts through July.
ODJFS spokesperson Tom Betti said agency officials meet with investigators from the U.S. Department of Labor Office of the Inspector General every four to six weeks. He said officials from the U.S. Attorney’s office participate in some of those meetings.
“We have received no feedback from the OIG on whether they are tracking down the source of these schemes or making any arrests,” Betti said.
A labor department spokesperson said the OIG could not comment on the existence or non-existence of an ongoing investigation, directing NBC4 Investigates to its pandemic response portal.
ODJFS also offers an online portal to report unemployment fraud and identity theft.