Audit shows Ohio Department of Job and Family Services knew about widespread unemployment fraud, did not alert state

Ohio unemployment audit

CINCINNATI (FOX19) - An audit of the Ohio Department of Job and Family Services for the first half of last year shows that department leaders knew about widespread fraud in the unemployment system months ago, but never alerted the state which cost millions of dollars and led to thousands of identities being stolen.

“The Department of Job and Family Services, despite telling us for six months that they weren’t aware of significant fraud, came out and indicated that they were aware of significant fraud, including the potential of upwards of $330 million and fraud in the pandemic unemployment system,” Ohio Auditor Keith Faber said.

“I’m not going to get into the question as to whether or not it was intentional, or an omission. But either way, the outcome’s the same.”

FOX19 Now Investigates repeatedly asked then ODJFS director Kimberly Hall about fraud claims in the months after the pandemic began.

“It is a challenge day over day to offer specificity around the number of fraudulent claims. We know there is significant fraud in our system and in a number of systems across the state,” Hall said in January. “It’s unfortunate that we have been impacted in this way. And it’s definitely a drain on our personnel resources.”

Auditor Faber says if Hall would have revealed fraud numbers sooner, it could have saved millions of dollars and protected thousands. “If we had known about this in June and July, maybe we could have offered suggestions on how to they could get it under control,” Faber said.

“But when we’re asking those questions, and they’re continuing denying knowledge that ultimately, the director of JFS testifying before the legislature said they were aware of as far back as June and July, it would have been helpful for us to know that.”

The department still has not answered why they didn’t warn the state sooner. “I have had a very candid discussion with the appropriate individuals,” Faber said. “And we let the legislature know that there was this problem. And candidly, we are waiting to see what they do in response to it. “The biggest, biggest response is going to be whether they fix the system.”

ODJFS issued a statement that says in part, “We are cooperating fully with the Auditor’s Office and are committed to being as transparent as possible. During the Auditor’s review of the past fiscal year (that ended June 30th, 2020), the Auditor of State identified two primary weaknesses in JFS processes and controls, particularly in the new pandemic unemployment program created by the federal government last spring. ODJFS is working diligently to correct these deficiencies so that they are not repeated in the audit of the current fiscal year.”

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