Wisconsin Officials Overpaid $21.2M In Unemployment Benefits Due To April Technology Issue

Report Says An Unknown Number Of Participants Received Incorrect Benefits

Unemployment insurance claims office
Bytemarks (CC-BY)

A new report from the nonpartisan Legislative Audit Bureau found the state overpaid an estimated $21.2 million in unemployment benefits in April.

This spring, the Wisconsin Department of Workforce Development reported that a technology error caused the agency to overpay some unemployment insurance benefits on April 29. DWD said many of the overpayments scheduled for direct deposit were recovered after the error was discovered.

The new report said DWD officials recovered $19.6 million in overpayments on April 29. But the report found the agency also made an estimated $1.5 million in overpayments through debit cards and “may have overpaid additional amounts to an unknown number of individuals” that day.

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The report also found DWD likely overpaid $101,300 in benefits on April 28.

The bureau said DWD’s correction on April 30 also may have caused an unknown number of individuals to be overpaid or underpaid the appropriate unemployment benefits. The report recommended the agency determine how many individuals were impacted by the incident and work to correct their benefit payments.

In a press release on Wednesday, DWD Secretary Caleb Frostman thanked the Legislative Audit Bureau for the report.

“The issues we have discovered since the April incident have emphasized the importance of improving our (unemployment insurance) policies and procedures. The Department immediately began our own internal investigation to identify and address outstanding issues and developed new written policies that ensure we verify the accuracy of payment files before sending them for distribution,” Frostman said in the release.

The report found the agency’s new policies did ensure the accuracy of payments made. But the bureau said the policies “do not require it to ensure a payment file includes all benefits payments that should be made on a given day.” It recommended updating the policies to ensure participants are receiving the benefits they are entitled to.

State Rep. Samantha Kerkman, R-Salem Lakes, is co-chair of the Joint Legislative Audit Committee, which received the report. She said in a press release on Wednesday that she found the issues described in the report “alarming.”

I appreciate the Audit Bureau’s quick response to examine this issue so that DWD would be prompted to examine their process and take corrective action. I sincerely hope that work by the DWD is ongoing because nothing short of a stack of faulty processes or outright mismanagement could have resulted in this heartbreaking backlog. Thousands of Wisconsin workers have been waiting over two months for DWD to do its job and process their unemployment claims,” Kerkman said in the statement.