Audit: More than $117M in improper unemployment payments made by MDES

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JACKSON, Miss. (WJTV) – Mississippi State Auditor Shad White released his yearly audit of state agencies on Tuesday. According to the report, more than $117 million in improper unemployment payments were made by Mississippi’s Department of Employment Security (MDES) last year and during the early months of the COVID-19 pandemic.

“I want to thank the auditors for their diligent work on this important report,” said White. “They overcame many logistical hurdles this past year. This excellent report shows it’s more important than ever to understand the mistakes that were made when money was flowing so freely during COVID.”

At MDES, auditors found several internal controls suspended or bypassed as the agency responded to the pandemic. White said 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.

All unemployment overpayments made by MDES after June 30, 2020, will appear in next year’s audit report.

Separately, in a May 2020 audit report, auditors noted a widespread lack of internal controls at the Department of Human Services. White said this year’s report shows executive staff at MDHS under previous leadership, when asked, failed to alert auditors of credible allegations of fraud involving grants awarded by the agency. The audit also shows MDHS continued to fund both the Mississippi Community Education Center and Family Resource Center in FY 2020 even after the two organizations were connected to what became over $90 million in potential misspending of public money.

For details on the findings at MDES and MDHS, click here.

On Tuesday, the MDHS Benefit Recovery Unit reported more than $2.5 million in taxpayer dollars was recouped over the past quarter after previous investigations showed public funds were defrauded or misused. 

The funds were recovered from cases involving misuse of SNAP, Child Care Discretionary Funding, and TANF subgrant funds broken down by month in the following areas:

DECCD RECOUPMENTS October 2020-May 2021 SNAP/TANF RECOUPMENT AMOUNT October 2020-May 2021 SUBGRANT RECOUPED QUESTION October 2020-May 2021 COST AVOIDANCE AMOUNT October 2020-May 2021 
$133,232.84 $2,469,375.30 $48,030.63 $2041.00 

“‘We have made a concerted effort to reconfigure and reinforce our monitoring of subgrantees to ensure total compliance,” Sandra Griffith, Chief Compliance Officer for MDHS, said. “Through risk assessment, training, and stringent oversight, we will make sure all questioned costs are identified, investigated, and, if needed, recouped. We will make certain the money that is intended for Mississippians in need is used for the identified purpose.”

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