By any measurement, $118 million is a lot of money. But when that money is improper unemployment benefits that amounts to 5.5% of the payments made during the 12 months ending in June 2020, it’s clear the state could have gotten a lot more wrong than it did.
A report this week from State Auditor Shad White on the annual audit of state agencies noted the improper unemployment payments, which were made by the Mississippi Department of Employment Security during the first four months of the COVID-19 pandemic.
“Auditors found several internal controls suspended or bypassed as the agency responded to the COVID-19 pandemic,” White said in a press release. “Unemployment payments were then made to people who never actually lost a job, were already in jail, and others who were ineligible to receive unemployment benefits.
“This finding matches those at other employment agencies in several other states like California, where $11 billion in unemployment overpayments have been identified. The Seattle Times called the state of Washington’s unemployment fraud the largest known theft of public money in that state’s history.”
Whatever Mississippi unemployment officials did wrong last year, it thankfully does not approach the errors reported by the much larger state of California, where up to 27% of unemployment payments may have been improper. Further context, provided by the Mississippi Today website, also makes our state’s $118 million error a little more tolerable.
According to Mississippi Today, the state provided $2.1 billion in unemployment benefits for the 2020 fiscal year. The $118 million in improper payments is about one dollar out of every 20 — which definitely is above the ideal loss percentage. But when you compare this to the payments during the prior 12 months, ending June 2019, the percentage isn’t so bad.
Mississippi Today reported that in fiscal year 2019, when the economy was a lot healthier, the state paid out almost $60 million in unemployment benefits, and 3% of it was improper.
If accurate, the numbers from these two fiscal years indicate that the Department of Employment Security, which had to be an immensely stressful place to work once the pandemic took hold, jobs started disappearing and the number of people seeking unemployment assistance skyrocketed, did a better job of taking care of 2020’s $2 billion than it did of 2019’s much smaller amount of payments. It’s just a surprise that 2020’s errors weren’t much, much worse.
To do a little more math, White is correct to sound an alarm: 5.5% of $2.1 billion equals $118 million, while 3% of 2019’s $60 million in unemployment payments equals $1.8 million.
Those are two vastly different numbers.
The report next year of improper benefits will be telling. The fiscal year that ends in a few days includes pandemic-related assistance for the entire 12 months. White said this week’s report is “kind of a teaser of what’s to come” — an assessment that seems very likely.
