The U.S. Department of Labor is clawing back $2.9 billion in unused pandemic funding sent to states to prop up unemployment insurance programs.
U.S. Department of Labor Secretary Lori Chavez-DeRemer said the department has already returned about $1.4 billion in unused funds to the U.S. Department of Treasury’s General Fund.
The roughly $4.3 billion was sent to states to use for temporary unemployment insurance during the pandemic. Instead, several states continued spending millions of dollars despite no longer meeting requirements, according to a 2023 audit by the department’s Office of Inspector General.
The Employment and Training Administration was responsible for oversight of the pandemic funds. Congress passed the Coronavirus Aid, Relief, and Economic Security Act in 2020 to provide expanded Unemployment Insurance benefits to workers unable to work due to the pandemic.
Through the CARES Act, the Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week program reimbursed states for benefits paid to eligible claimants who did not wait a week to get regular Unemployment Insurance benefits.
“ETA and states did not always meet the requirements or statutory intent of the TFFF program. Specifically, individual claimants waited to receive urgently needed UI benefits, states received TFFF funding when they were not eligible, and states’ TFFF accounts have unused fund balances that have not been reconciled … and returned to the U.S. Department of Treasury,” according to the Office of Inspector General audit.
“Any money still sitting around for pandemic-era unemployment funds is a clear misuse of Americans’ hard-earned tax dollars,” Chavez-DeRemer said. “I’m keeping my promise to be a good steward of your money by rooting out waste to ensure American workers always come first.”
The OIG’s 2023 audit also found four states were allowed to access the funding “despite not meeting program requirements,” totaling more than $100 million in spending.
“It’s unacceptable that billions of dollars went unchecked in a program that ended several years ago,” Deputy Secretary of Labor Keith Sonderling said. “In a huge win for the American taxpayer, we’ve clawed back these unused funds and will keep working to eliminate waste, fraud, and abuse.”
The OIG audit noted: “Nearly $5 billion remained unused as of July 31, 2023 – more than 22 months after the TFFF benefit eligibility period expired – with no formal plan to reconcile states’ accounts and deobligate remaining funds for return to the U.S. Department of Treasury.”
