Preliminary findings issued on Ohio's struggling unemployment system
Aug. 6—COLUMBUS — Ohio can't wait until times of crisis to seek improvements to its unemployment compensation system and should pursue a two-step verification system to deter the type of fraud that has cost the system hundreds of millions of dollars, a largely legislative council said Thursday.
The Unemployment Modernization and Improvement Council unanimously approved what it characterized as an initial report on how the state's antiquated and unprepared unemployment compensation technology was overwhelmed by a deluge of legitimate and fraudulent claims that followed state and national shutdowns of the economy early in the pandemic.
Among other things, the report recommends that the state should explore a system that would allow legitimate claimants to be able to track the progress of their claims, continually upgrade employee training even in good economic times, and improve self-service functions on the phone and online to reduce the backlog of calls.
"During times of low unemployment, look at how we can improve the system," said Rep. Mark Fraizer (R., Newark), council co-chairman. "Frequently, what we see is, until we need it, we don't address it."
Unemployment surged in the spring of 2020 with the first wave of the pandemic. At the same time the federal government created new programs expanding the pool of those eligible for benefits.
The state's out-of-date computer system had to be upgraded on the fly while trying to keep pace with claims. This resulted in delays in processing claims and adding now-discontinued federal supplemental benefits to payments.
Further complicating matters was rampant successful and attempted fraud, much of it from foreign perpetrators who used personal information stolen from other sources to file false claims.
The new federal Pandemic Unemployment Assistance program — which targets benefits to self-employed, contract, gig, and other workers not eligible for traditional benefits — was a particular target as states were under pressure to get dollars out the door quickly and because of the lack of a traditional employer-employee relationship made it more difficult to verify the claims.
"No one wants to be unemployed, but if you are you want a system that is efficient, effective, fair, and able to be reviewed and also be flexible...," said Sen. Teresa Fedor (D., Toledo), one of four lawmakers from northwest Ohio to serve on the panel.
The report is expected to be updated after the council gets the findings of an audit of the system by State Auditor Keith Faber.
The state has distributed a total of $12.4 billion in traditional benefits since the start of the pandemic in early 2020 to more than 1 million people and $11 billion in PUA to 1.2 million.
Public frustrations continue, as the council heard again Thursday.
Heather Keyes, of West Toledo, lost her jobs in medical billing and housecleaning in April, 2020 and entered the unemployment compensation system. She saw her online account locked because of a computer glitch beyond her control, resulting in slower manual payments as opposed to automated payments.
Someone was able to gain access to her state account and change her bank routing number, resulting in the theft of $900 that she has yet to get back. She is one of many Ohioans who've spent hours on the phone with call agents within the Department of Job and Family Services only to not have their concerns resolved.
"I'm just so frustrated," she told the council. "I don't feel like I should have to call and beg for my money...I've done everything I'm supposed to do."
She insisted that she and others have been victimized by a hack of the ODJFS system, something Matt Damschroder, the department's current director and a council member, denied.
"There is no evidence that the JFS system itself was breached and that was what caused these incidents, he said.
Mr. Damschroder became ODJFS head in the heat of the crisis. He said the department will work with the legislature to implement the recommendations of the council.
"While, as today's report says, we have much more work to do, we are in a dramatically better place now than we were earlier," he said. "Ohio's economy is recovering, and the number of claims are dramatically down, and we are beginning to see positive results from our many improvement efforts."
First Published August 5, 2021, 5:59pm
