$405 Million in Louisiana Aid Went to Ineligible Workers

NEW ORLEANS (AP) — Louisiana’s labor department sent more than $405 million in state and federal unemployment insurance benefits to people who don’t appear to have been eligible for them as the coronavirus pandemic devastated the economy, the state Legislative Auditor’s Office said in a report Monday.

The report said an analysis estimates the money was paid to more than 97,500 people who were not eligible, based on their income. The analysis was done using wage reports from employers. A footnote says the amount may be higher because it does not include complete data employers submitted in August or data from self-employed or “gig” workers who don’t report wages to the department.

The department in Baton Rouge, known as the Louisiana Workforce Commission, didn’t dispute the report. In a response, it said the pandemic-related surge in applicants and legislative action giving employers more time to submit wage reports affected efforts to verify the accuracy of applicants’ self-reported income.

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Increased benefits funded through federal legislation passed by Congress last year “greatly incentivized countless criminal enterprises and bad actors to take advantage of already overwhelmed state workforce agencies nationwide,” the department response said.

The response also said the department was “weeks away” from implementing a new identify verification system to cut fraud and said efforts were planned to try to collect the overpayments.

The audit report notes that the number of unemployment insurance claims blew up from fewer than 17,000 at the end of February of last year to 366,798 by the following April 25. From late March through Dec. 31, the department paid $6.87 billion to more than 694,000 workers. The total payout has since hit $8 billion, according to the department.

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By AP reporter Kevin McGill

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