The D.C. government’s unemployment compensation system has been manipulated using a simple technique to create unauthorized claims worth thousands of dollars, an audit found, and the fraud may be widespread.
A user of the automated benefit program operated by the Department of Employment Services could select an arbitrary Social Security number, alter the name and address on the account and redirect the weekly benefits, according to auditor BDO Seidman.
“The Web Enabled Benefit System does not have adequate access controls to prevent or detect ineligible, unauthorized or fraudulent claims from being submitted,” BDO wrote.
In its “Yellow Book” report released last week on internal control failures across the D.C. government, BDO listed management of the unemployment compensation system as a “significant deficiency.”
Auditors discovered 16 “inadequate” unemployment claims totaling $91,000, all of which have been directed to the Office of the Inspector General for further investigation. They found multiple claims for unemployment using the same mailing address, the same Internet Protocol address, and in another case, “the same named claimant was used with different Social Security numbers.”
Austin Anderson, deputy inspector general, said the problem is much more widespread than 16 cases and $91,000.
“We’ve had at least that many and more than that amount referred to us and they’re under investigation,” he said.
Many of those cases are turned over to the U.S. attorney for prosecution. In January, two D.C. residents pleaded guilty to second-degree theft for obtaining benefits fraudulently.
D.C. Councilwoman Carol Schwartz, who has oversight of DOES, said the auditor’s revelations are “extremely troublesome” and promised to hold a hearing once the IG is finished investigating.
DOES officials said they have developed a “suspicious claims list” using the Benefits Auditing and Recovery Tracking System and the “conscientiousness of agency employees.” An aide to Mayor Adrian Fenty said the agency “will upgrade the [WEBS] system” to prevent and detect fraud while still getting benefits to people who deserve them.
In its formal response to the audit, DOES wrote that any theft is unacceptable, but 16 claims for $91,000 is “not massive when consideration is given to the fact that more than $90 million in benefits were paid to more than 23,000 claimants in the past year.”
