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Witnesses urge front‑end identity checks, sustained tech funding and trained merit staff to curb UI fraud
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Summary
At the same House Ways and Means Subcommittee hearing, private vendors, state labor officials and front-line UI workers advocated identity verification, funding for IT modernization and preservation of merit-based state staff as key defenses against pandemic-era schemes.
Witnesses and members at a House Ways and Means Subcommittee on Work and Welfare hearing described concrete prevention measures they said would reduce future unemployment insurance fraud and improve responses during surges.
Haywood Talcove, chief executive of LexisNexis Special Services Inc., urged three core changes: apply identity verification at the front end, end self‑certification, and continuously authenticate beneficiaries. “We finally we must finally understand that pay and chase does not work,” Talcove testified, and he recommended private‑sector techniques — continuous authentication and data analytics — be applied to government payments.
State officials described investments and operational practices that, they said, reduced improper payments. Anna Hu, director of the Missouri Department of Labor and Industrial Relations, told the committee that Missouri modernized its IT systems in 2016 and joined the National Association of State Workforce Agencies (NASWA) Integrity Center and the Integrity Data Hub. Hu said those steps, with third‑party partners, helped Missouri limit improper payments and deliver reemployment services while protecting program integrity.
Private‑sector and state partnership examples were a focus. Jeffrey Ficki, who led Ohio’s public‑private response, described a short-term collaboration after major fraud and backlogs overwhelmed Ohio’s system. He testified that deploying a new fraud‑detection “stack” and advanced analytics cut new fraudulent claims from roughly 1,000,000 a month in early 2021 to under 25,000 a month — a reduction he described as “over 97%” — and helped adjudicate a backlog of unadjudicated claims within 90 days. Ficki credited coordinated data sharing with banks and payment networks, targeted analytics to identify suspect payments, and legal agreements to recover funds held by payment platforms.
Front‑line workers warned against outsourcing that can deprive systems of trained staff and institutional knowledge. Shelby Mayenberg, an employment‑services worker and member of the Washington Federation of State Employees Local 443, described working long shifts during the pandemic and the value of merit‑based hiring. She said initial training for permanent UI workers is typically six to eight weeks and that experience is essential to spotting fraud and helping legitimate claimants. “UI workers are the first line of defense protecting hard earned benefits from fraud,” Mayenberg told the subcommittee.
Witnesses and members also discussed funding. Hu said Missouri businesses contributed about $130 million in FUTA taxes in one year but that Missouri received roughly $38.5 million in UI administrative funding from the Department of Labor, a funding mismatch she said undermines long‑term modernization and cybersecurity investment.
Several members stressed that modernizing systems and dedicating consistent technology funding would reduce the need to “pay and chase” and increase collections and prosecutions. Panelists and members urged Congress to consider targeted, sustained funding streams for state UI modernization, clearer data‑sharing authorities between financial institutions and agencies, and protections for merit‑based state staff in the event of future surge responses.
Ending: Committee members indicated support for legislative steps that combine a near‑term extension of prosecutorial authority with longer‑term investments in state UI systems, identity verification and workforce training to prevent future large‑scale fraud.
