Michigan unemployment agency never did background checks of new hires who stole money, audit shows

Earlier this year state audits found that Michigan's unemployment agency lost more than $8 billion in taxpayer money because of waste and fraud. 

A new audit shows the agency never even did a background on many they hired -- and some of those new hires had already been convicted of stealing money.

"It is difficult to get ahold of them they said I owe them money that I don’t owe," said Miranda Furlette.

To say it's been a challenge getting assistance from Michigan's unemployment agency during the pandemic is an understatement for many.

Furlette, from Detroit, says at one point the state agency claimed she owed it $10,000 even though the agency owes her 10 weeks of qualified unemployment.

FOX 2: "Do you have enough money to pay your bills?"

"Barely," she said.

Adding fuel to the frustration was the auditor general findings of its state audit. It turns out from October 2019 to the end of 2020, Michigan's unemployment agency never conducted criminal background checks on new employees.

Investigators found several workers had been convicted of financial crimes ranging from embezzlement to identify theft and fraud. And those same criminals had access to sensitive financial information - in one case it was used to steal public dollars.

"The unemployment agency has an entire database of people that are looking for jobs that are not criminals," Furlette said.

So why would the state agency make such a sloppy and costly mistake? Julia Dale the director of the Unemployment Insurance Agency, points to a workforce increasing by over five times, and a record level number of claims during the pandemic - with newly created complex federal assistance programs.

Her statement reads in part:

"As UIA worked quickly to increase the department’s capacity to address Michiganders’ needs, the execution was far from perfect. The lessons learned and opportunities articulated by the audit, serve as the platform to launch an improved Michigan unemployment insurance agency.

"We are an agency committed to doing right by Michiganders and will do all that we can to implement improvements going forward."

"It is difficult to trust the government," Furlette said.

But the agency is going to try and earn it back, making changes that include developing policies for criminal background checks, implementing a new employee training management system, following procedures to limit data exposure, and working with the Department of Labor to secure staffing contracts with state and federal guidance.