COLUMBUS (WCMH) — An audit of Ohio’s unemployment system during the pandemic revealed several factors led to $3.8 billion being spent on overpayments and fraudulent claims. 

“Ohio’s unemployment compensation system failed in a massive way,” said Auditor Keith Faber, (R) Ohio.

Auditor Faber said the audit found a lack of controls led to vulnerabilities in the unemployment system, combined with changes in federal requirements. Over $475 million were paid in fraudulent cases and another $3.3 billion in overpayments by Ohio Department of Job and Family Services. Faber says more could have been done to stop this.

“Had they stepped up and worked on trying to solve those problems, who knows what the outcome would have been. It’s unlikely it would have been a 3.8 billion dollar problem,” said Faber.

A spokesperson for Governor Mike DeWine says the pandemic and the need to get money out quickly has a lot to do with how this happened.

“I don’t think there was any planning that could have been done to prepare for the exponential jump in claims that the auditor thoroughly documented in this report,” said Dan Tierney, Press Secretary for Ohio Governor Mike DeWine.

Auditor Faber stopped short of placing blame on Governor DeWine but did say the Director of ODJFS at the time did not signal anything was wrong.

“That’s a question for Ohioans to answer. Again, we’re the ones who identify problems,” said Faber. “Certainly it was his original director that should bear some of the responsibility and folks in the department who just were overwhelmed.”

Other details of the audit:

26% of all unemployment payments for the fiscal year that in ended in June were potentially paid as overpayments or to fraudulent accounts. Before 2020, fraud and overpayments were around 3.5% of total payouts.

Benefit payments were below $900 million for the three fiscal years before the pandemic; after the pandemic, benefits rose to $9.4 billion in 2020 and $14.2 billion in 2021.

With over $3.8 billion identified in fraud and overpayments, that equates to over $673 for every Ohioan in the labor force. Gov. Mike DeWine and the General Assembly used American Rescue Plan funds to reimburse the federal government for the cost of this program.

Investigators determined payments were made to dead and jailed people, to social security numbers associated with four or more bank accounts, to bank accounts associated with multiple individuals, and to addresses associated with five or more individuals.

ODJFS Director Matt Damschroder responded to the audit, saying, “The audit confirms the unprecedented surge in claims and accompanying fraud caused by the pandemic, and the recommendations align with the work already underway in addressing the issues we faced.”

Damschroder was appointed as interim director in March and made the permanent director in July.

To read a full copy of the audit, click follow this link.