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Failures within Ohio’s unemployment system continue to cost taxpayers money according to state auditor

Published: Sep. 29, 2021 at 10:23 AM EDT
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CLEVELAND, Ohio (WOIO) - A scathing new report from the state auditor reveals more issues within the unemployment system.

They are issues Auditor Keith Faber and lawmakers say are going to end up costing taxpayers a lot of money, regardless of whether they drew benefits during the pandemic.

“Every Ohioan has a vested interest to make sure this system works effectively, efficiently and transparently,” Faber said. “It wasn’t designed to work well.”

A scathing new report from the state auditor reveals more issues within the unemployment system. They are issues Auditor Keith Faber and lawmakers say are going to end up costing taxpayers a lot of money, regardless of whether they drew benefits during the pandemic.

Posted by Hannah Catlett on Wednesday, September 29, 2021

Not only was Ohio’s unemployment office outperformed by other states in getting out unemployment payments last year, but Fabor says his office continues to receive reports of fraud going on within the system.

“I got four of them here that just got delivered to my regional office,” he said as he held up the envelopes.

Faber’s latest report focuses on a failure in customer service from JFS. His next audit will address the fraud problems. However, he says they are all inter-related.

19 Investigates asked if it is fair to say that the poor customer service made the state’s fraud problem worse?

Faber said, “I have no problem saying that. It didn’t allow us to identify and clamp down on some of the fraud.”

At the beginning of the pandemic he says a poorly designed website lead to an overwhelming amount of calls that the office didn’t have enough employees to answer, resulting in a weak response to those reporting suspected fraud.

“They weren’t able to call and say ‘hey you’re saying I got checks for unemployment and I didn’t get any. What the heck?!’” Faber said.

Representative Jeff Crossman tells 19 investigates he continues to hear from his residents struggling with fraud or even obtain back pay.

“We have become an arm of customer service,” he said.

Crossman happened to file new legislation on the day the audit came out, asking the governor to employ more of the state’s cyber security resources to prevent false claims from being filed, and also keep fraudsters from stealing the money in people’s legitimate accounts. The later is an issue he says JFS isn’t being proactive in.

“The JFS folks have not been willing to acknowledge the hacking. They will say things like ‘account take over,’ but they won’t acknowledge there has been hacking. I think that’s a problem because you have to acknowledge a problem before you can address it,” Crossman said. “It’s costing taxpayers money across the board.”

ODJFS told 19 Investigates it is committed to combatting all types of cybersecurity threats against Ohio’s unemployment systems. When we asked about Crossman’s allegation that the office is not admitting to an issue, a spokesperson said, “To lump every cyber-threat under the term “hacking” discounts that multiple layers of cybersecurity are required to protect our systems and those reliant on them. We rely heavily on the State of Ohio’s cybersecurity measures to protect our systems and networks from criminals using technology to enter or take control of our systems. Again, we do not have any indications that our systems have been hacked in this manner. However, we remain constantly vigilant against such threats”

The state says it is currently finalizing a system by which those who were victimized through an account takeover can be made whole. That process will soon be entering the system-testing phase of deployment, and JFS will announce when victims can begin the process of seeking restitution.

Auditor Faber pointed out that almost every working Ohioan is paying for unemployment insurance through their employer-- insurance premiums will likely go up exponentially as the state loses more and more money to fraudsters.

“It’s going to impact your employers ability to give raises other benefits and cost of your employment,” Faber said.

Ohio Department of Job and Family Services (ODJFS) Director Matt Damschroder released a statement following the Auditor of State’s release of the pandemic response performance audit commissioned by House Bill 614.

That additional fraud report is supposed to be released at the end of October. We will let you know when we get a copy of it.

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