(Bloomberg) -- The U.S. will send in “tiger teams” of specialists and provide extra cash to strengthen state jobless-benefits systems, part of a $2 billion overhaul after a surge in unemployment overwhelmed governments and led to millions of fraudulent claims.
The Department of Labor is sending $260 million in grants to help states improve outreach and service and $140 million for fraud prevention, deploying funds provided by the $1.9 trillion American Rescue Plan Act from March, according to a statement Wednesday. In addition, the federal government is deploying so-called “tiger teams,” or groups of experts across fields including fraud and engineering.
The pandemic-relief law allocated $2 billion in funds for state jobless-benefits systems to better detect fraud, reduce backlogs and ensure more equitable access across the country. Each benefits program is state-led, resulting in a patchwork approach that left out or delayed benefit payments for millions of Americans when they lost work amid the Covid-19 recession.
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“The pandemic underscored the need for modernization“ of the system, Labor Secretary Marty Walsh said in the statement. It also “exposed significant vulnerabilities in state technology to criminals looking for an opportunity.”
The department didn’t provide details on how other funds from the law would be disbursed.
Cyber crime and identity theft were major issues for the benefits system during the pandemic, resulting in about $36 billion of lost funds, according to the department’s inspector general. The department is addressing this through a deal with LexisNexis, TransUnion (NYSE:TRU) and a V3Gate and ID.Me partnership to better verify the identities of jobless-claims applicants and identify suspicious data.
The Labor Department is also updating the often antiquated application and processing systems in each state, which caused months-long delays and inaccessibility for many recipients. The department is partnering with the U.S. Digital Service, a government technology agency, to offer IT and software support.
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