Michigan, Massachusetts Waived $241M in Pandemic UI Fraud
Summary
A federal audit found Michigan and Massachusetts improperly waived recovery of $240,973,884 in pandemic-era unemployment overpayments -- including an estimated $65 million tied to claims Michigan's own system had already confirmed as fraudulent before the state waived them anyway. The Employment and Training Administration didn't respond to the draft findings when OIG sent them in August 2025, and the inspector general's most recent report to Congress shows the money question is still open: as of March 2026, the recommendation to remedy the $240,973,884 remains unresolved, with OIG 'negotiating with agency.'
One SSN, 11 states, and 17,833 waivers like it
OIG built its case with cross-state data matching⧉, running a 400-claim sample against its own database of pandemic-era claims from all 53 state workforce agencies. One flagged case: a Social Security number used to file an unemployment claim worth $4,500 in Michigan was also used to file claims in ten other states, and shared a physical address with four more claims. referred 14 such 'likely fraudulent' claims to Michigan for confirmation; state officials confirmed five, including one where Michigan's own fraud investigation and identity-theft finding were already on record a full year before the state waived the overpayment.
Projected across Michigan's full waiver population, estimates the state waived recovery of more than $65 million tied to 17,833 claims like these -- overpayments Michigan itself had already flagged as fraud.
View data as table
| Michigan | 238,709,136 | 71,656 at-fault waivers, including 17,833 tied to confirmed fraud |
|---|---|---|
| Massachusetts | 2,264,748 | 250 waivers across three tested compliance issues |
Nearly all of it is Michigan's
The confirmed-fraud waivers are only part of Michigan's total. OIG also found the state improperly waived an estimated $172,927,543⧉ tied to claimants who didn't meet basic 'able and available for work' eligibility rules in the first place -- $160.6 million projected from regular waivers and $12.3 million from blanket waivers state officials issued in batches. Massachusetts, the only other state OIG tested in depth⧉, waived 250 non-compliant overpayments worth $2,264,748 across three separate issues -- undocumented hardship findings, undocumented one-click waivers, and missed claimant notifications; unlike Michigan's figures, could not project this to Massachusetts' full waiver population, so the true Massachusetts total is likely undercounted here.
Separately, ran the same fraud-indicator data matching against Massachusetts' waiver universe and flagged 14 'likely fraudulent' claims worth $191,928 -- claims Massachusetts itself had never identified as fraud. Only 10 of the 14 ended up inside that $2,264,748 questioned-costs figure, because those 10 also independently broke the non-fraud waiver rules above; the other 4, worth $29,016, fell outside the state's questioned costs entirely because Massachusetts couldn't confirm they were fraudulent.
Michigan and Massachusetts were chosen for testing because they reported the two largest waiver totals of any state -- $5.9 billion combined, 54% of the $10.9 billion all 47 responding states told the federal government they'd waived nationally. 's own conclusion is blunt about what that implies: the $10.9 billion national figure is itself 'likely significantly understated,' and no other state's waivers got this kind of scrutiny.
View data as table
| Able-and-available issues | 172,927,543 | Waived for claimants ETA guidance says weren't eligible in the first place |
|---|---|---|
| Confirmed-fraud waivers | 65,781,593 | 17,833 claims tied to overpayments Michigan's own system had already confirmed as fraudulent |
The agency responsible didn't answer, then didn't act on the money
OIG sent ETA a draft of the report for comment in August 2025⧉; ETA never responded, so the final report went out on September 25, 2025 without any agency reply on the record. 's five recommendations included working with Michigan on proper post-investigative action for the five confirmed-fraud cases it identified directly, and a fourth recommendation: remedy the full $240,973,884. OIG's most recent semiannual report to Congress⧉, covering October 2025 through March 2026, shows ETA finally reached a decision on four of the report's five recommendations during that window -- but that decision touched $0 of the questioned costs and $0 in funds put to better use. The same report separately lists 19-25-009-03-315 among audits 'unresolved' for more than six months, with the full $240,973,884 still outstanding and 'negotiating with agency.' Ten months after the audit's release, the only recommendation that involves giving any money back is the one still unresolved.
- found Michigan and Massachusetts improperly waived recovery of $240,973,884 in pandemic-era unemployment overpayments -- Michigan $238,709,136, Massachusetts $2,264,748 -- out of a national total of $10.9 billion waived by 47 states, which says is itself understated.
- An estimated $65 million of Michigan's total, tied to 17,833 claims, was recovery Michigan waived on overpayments its own system had already confirmed as fraudulent -- something federal guidance says a state may never do, confirmed through case-by-case referrals including one SSN used to file claims in 11 states.
- ETA never responded to 's August 2025 draft; the final report was issued without agency comment on September 25, 2025.
- As of 's semiannual report covering through March 2026, ETA had acted on 4 of the report's 5 recommendations but touched none of the $240,973,884 in questioned costs -- the recommendation to remedy the money remains unresolved, and says it is still 'negotiating with agency.'
Every dollar figure, claim count, and quote in this piece traces to the audit report itself (Report No. 19-25-009-03-315) or to 's subsequent semiannual report to Congress tracking that audit's resolution status -- both read directly from the agency's own PDFs. The 17,833-claim, $65,781,593 Michigan fraud figure and the $172,927,543 able-and-available figure are both statistical projections from claims sampling (Table 3), not full-population counts, each carrying a stated 95% confidence interval and +/-7% precision level; this piece independently recomputed that the two figures sum to Michigan's stated $238,709,136 total as a consistency check, and they do.
Massachusetts' $2,264,748 figure is not a statistical projection at all -- could not project it to Massachusetts' full waiver population due to data availability issues, so it likely understates Massachusetts' true improperly waived total. (One of Massachusetts' three sub-totals has an unreconciled discrepancy inside the report itself: Table 3 lists $33,744 for the claimant-notification finding, used in this piece and in the $2,264,748 total because it's what the table's own figures sum to, while the narrative text twice states that same 4-claimant finding as $27,216.) selected Michigan and Massachusetts for in-depth testing specifically because they reported the two highest waiver totals nationally; Florida, Ohio, and Texas also ranked among the highest but were not tested due to resource constraints, and no state outside this audit's scope has had its waivers checked this way.
Sources(2) ▾
- U.S. Department of Labor, Office of Inspector General, COVID-19: Recovery of Millions in Pandemic-Related Unemployment Insurance Overpayments Improperly Waived, Including Fraud (Report No. 19-25-009-03-315) (2025-09-25) — The audit itself. tested Michigan and Massachusetts -- the two states with the highest reported dollar amounts of pandemic-era UI overpayment-recovery waivers -- and found both improperly waived recovery of overpayments that didn't meet federal waiver requirements, including overpayments already confirmed as fraudulent. Source for every dollar figure, claim count, and finding in this piece except the follow-up resolution status, which comes from 's subsequent semiannual report. Read directly (text extracted from the PDF); the live URL was reachable without a blocker. oig.dol.gov · original document
- U.S. Department of Labor, Office of Inspector General, Semiannual Report to Congress, October 1, 2025-March 31, 2026 (Vol. 95) (2026-05-29) — 's own tracking of what happened to Report 19-25-009-03-315 after it was issued. The 'Management Decision Made During this Reporting Period' appendix shows ETA reached a decision on 4 of the report's 5 recommendations during this window but that decision touched none of the $240,973,884 in questioned costs. The separate 'Unresolved Audit Reports Over 6 Months Old' appendix lists the report with 1 unresolved recommendation and the full $240,973,884 still outstanding, under the heading 'Agency Management Decision ... Did Not Resolve; Negotiating with Agency.' This is the most recent semiannual report has published as of this piece's writing ( issues these roughly twice a year, each covering the prior six months). Read directly (text extracted from the PDF); the live URL was reachable without a blocker. oig.dol.gov · original document
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A U.S. Department of Labor Office of Inspector General audit⧉ found that Michigan and Massachusetts improperly waived recovery of pandemic-era unemployment overpayments -- overpayments the states were legally required to try to collect back -- totaling $240,973,884 in questioned costs. Michigan carries nearly all of it: $238,709,136, including an estimated $65 million tied to 17,833 overpayments Michigan's own system had already confirmed as fraudulent before the state waived recovery of them anyway, which federal guidance bars under any circumstances.