Scathing Audit Reveals Andrew Cuomo's New York Lost $11 Billion in Unemployment Fraud in 2020

Scathing Audit Reveals Andrew Cuomo’s New York Lost $11 Billion in Unemployment Fraud in 2020

New York let fraudsters off the hook with at least $11 billion in taxpayer cash as unemployment claims soared at the height of the COVID-19 pandemic – helped by relaxed eligibility rules and an already crumbling state unemployment system, Comptroller Tom DiNapoli charged Tuesday.

The $11 billion was lost in 2020, under the government of the day. Andrew Cuomo, outright fraud and overpayments, according to DiNapoli’s audit of the mess. But he warned that despite the staggering theft in the first year of the pandemic and lockdowns, billions more frauds are likely to be uncovered.

“There was a good intention to squeeze out so much money – but the problem was that it made the system even more vulnerable to fraud, especially when it came to identity theft,” the comptroller said.

It did little to help the federal government make changes to unemployment eligibility rules in March 2020, allowing people to self-certify their employment information amid record spikes in applications, the scathing audit says. .

“For example, the CARES Act allowed applicants under these temporary programs to self-certify their eligibility and salaries and required states to make immediate eligibility decisions,” the audit said of legislation enacted by then-President Donald Trump as COVID slammed New York in March 2020.

The relaxation of regulations during COVID has allowed for an increase in fraud.
The $11 billion was lost in 2020, under the government of the day. Andrew Cuomo, outright fraud and overpayments.
Stephane Yang

It’s still unclear how much unemployment fraud and waste have cost the state after the first year of the pandemic, especially with the state Department of Labor keeping key data proving whether it prevented as many of fraud he claimed to DiNapoli.

“We generally find that in many agencies, responsiveness and ultimately transparency is not where it should be,” DiNapoli said Tuesday, while noting months-long delays in getting responses from the Department of Labor during preparation for the audit.

The state spent about $76.3 billion on unemployment benefits between April 1, 2020 and March 31, 2021 after claims soared 3,140% from a year earlier, the audit says .

Unemployment claims rose after public safety measures shut down much of the economy, and suspected unemployment fraud rose to more than 17.59% of total claims, from just 4.51% two years earlier, according to the audit.

DiNapoli said it was a sign that New York State needs to tighten its regulations.
Thomas DiNapoli said it’s likely billions more frauds will be uncovered throughout the audit.
William C. Lopez/New York Post

“We’re literally building the plane, while we’re trying to fly it,” then-government secretary Melissa DeRosa. Andrew Cuomo, told reporters in May 2020 after a series of issues with the state unemployment system.

The push came after the state Department of Labor lingered under Cuomo to overhaul an unemployment system ill-prepared for the historically high pandemic workload given its dependence on labor. “outdated” technology from the Cold War era.

“Department officials ignored warnings as early as 2010 that the unemployment insurance system
was outdated and therefore difficult to maintain and lacked agility
necessary to adapt to new laws and scalability to handle workload peaks,” DiNapoli’s audit states.

Its recommendations include calls for the ministry to step up its efforts to hunt down fraudsters while improving its IT and financial transparency.

Claims increased by more than 3,000% during this period.
The state spent about $76.3 billion on unemployment benefits between April 1, 2020 and March 31, 2021.
Getty Images

The audit drew immediate criticism in light of continued efforts by state leaders, including Governor Kathy Hochul – who kept Labor Commissioner Roberta Reardon in place after Cuomo’s disgraced resignation last year – to that the federal government bear the remaining costs of pandemic unemployment costs caused by public health shutdowns.

“It should be noted that this is a larger sum than the $7.7 billion New York owes the federal government to cover unemployment insurance claims during the pandemic,” said Justin Wilcox, executive director of the advocacy group Upstate United, in a statement after the release of the “damning” report.

“This incredible incompetence demands immediate accountability and action,” he added.

Representatives from the Labor Department and Hochul’s office on Tuesday did not respond to requests for comment on the report.

DiNapoli said New Yorkers should heed the audit and its recommendations that the Hochul administration would push for much-needed updates to the state’s unemployment system or risk losing billions of dollars. additional dollars in the future.

“It’s public money. Part is state. Some of it is federal — and we have to make sure that taxpayers’ money isn’t spent inappropriately,” he said.

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