Illinois auditor general breaks down latest IDES audit

Published: Aug. 31, 2022 at 3:25 PM CDT
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SPRINGFIELD, Ill. (WGEM) - Illinois saw over 970,000 people filing for pandemic unemployment assistance in April 2020. The American Rescue Plan Act provided federal aid to help states provide unemployment payments to those in need. An audit released Tuesday found there were many problems behind the scenes in Illinois.

State leaders have described unemployment during the pandemic as a “perfect storm” due to the number of people filing for benefits and the Illinois Department of Employment Security’s outdated equipment.

Prior to COVID-19, IDES saw up to 40,000 unemployment claims each month. Pandemic unemployment brought that number to 970,000. IDES Director Kristin Richards has explained many times that the IDES system was never built to handle that amount of claims.

Illinois Auditor General Frank Mautino explained the federal government gave states six weeks to have a system ready to take on the avalanche of new claimants.

“The agency then contracted with a third party to actually do the eligibility,” Mautino said. “That’s where a lot of this problem began.”

This audit states IDES could not provide a system and organizational control report for the pandemic assistance program. In fact, state auditors couldn’t determine if the developers made unauthorized changes to the environment, application, or data.

Mautino said departments should always know who has access to make changes in order to keep confidential information safe.

“We have found that that is weak not only in this agency but in 30 to 35 other agencies,” Mautino said.

IDES also failed to keep accurate and complete PUA claimant data. According to the department, over 424,887 claimants had received benefits totaling $8.16 billion by June 30, 2021. However, auditors were unable to conduct detailed testing to find out whether those claimants were actually entitled to benefits.

“If you see 15 claims coming in from one house, the computer would normally kick that out and say, ‘flag it and take a look at this.’ That wasn’t there on the PUA side,” Mautino explained. “And fraudsters and cyber criminals are ingenious.”

Illinois Auditor General Frank Mautino talks with Mike Miletich on August 30, 2022.
Illinois Auditor General Frank Mautino talks with Mike Miletich on August 30, 2022.(Mike Miletich)

Mautino’s team found IDES didn’t create an audit trail to document claims according to federal standards. He suggested the problem may have been much smaller if IDES implemented the unemployment insurance standards the state has used for years.

The Auditor General also noted that IDES failed to have timely cash reconciliations with the comptroller’s office. Mautino said the risk of error due to misapplied cash transactions is significant since the agency has numerous transactions each month. He said IDES was “so bogged down” by issues with the PUA system that routine tasks like reconciliations slipped.

“Their dates slipped where they would be anywhere from four to six months behind on getting balances,” Mautino added.

The Auditor General’s office couldn’t express a proper opinion on the financial statements due to those circumstances during the time of the investigation.

An IDES spokesperson said the agency accepted the OAG findings and recommendations. Rebecca Cisco explained IDES has worked closely with the Illinois Department of Innovation and Technology and other state partners to establish stronger cybersecurity controls within the agency’s IT system.

“This includes implementation of ILogin to better protect personally identifiable information (PIIP, leveraging cutting-edge tools used by the financial services industry around identity verification and proofing, and collaborating with peer agencies to strengthen cross-matching techniques,” Cisco said.

Cisco also stressed that IDES, and every unemployment insurance program across the country, faced unprecedented challenges as a result of the COVID-19 pandemic. Cisco said IDES was tasked with creating and implementing the new unemployment insurance programs, processing record-setting claim levels, and providing economic stability to impacted workers.

“The Department is pleased the audit findings do not suggest that individuals’ information has been compromised or exposed as a result of the IDES system, nor is there any evidence that IDES systems have been breached in any way,” Cisco said. “IDES looks forward to continuing to make improvements to Department procedures that ensure a better experience for individuals seeking assistance.”

There is also an in-depth audit underway analyzing other problems within IDES throughout this pandemic. The Illinois Legislative Audit Commission called for the audit to be conducted through a resolution offered by Sen. Chapin Rose on Sept. 1, 2021.

Lawmakers hope to see detailed information about the application and review processes along with an analysis of how the state could contain costs and improve the delivery of benefits to eligible claimants by avoiding fraud. Rose requested that IDES provide a detailed account of funds “allegedly disbursed” fraudulently.

He also requested that the audit document the types of unemployment fraud schemes IDES experienced and procedures the agency took to respond to those claims. That audit is expected to include a summary of the average time IDES took to process claims, the timeliness of benefit payments, and the accuracy of those payments.

Mautino said that information should be available early next fall.

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