Committee questions OLA audit of frontline worker pay program; DLI describes fraud‑prevention and recoupment actions

Sen. Grant Pratt and other committee members raised questions about the Office of the Legislative Auditor (OLA) review of the frontline worker pay program that the Department of Labor and Industry administered in coordination with other agencies.

Pratt recalled OLA findings that some applications were approved despite fraud indicators and asked what DLI had done since the report. Commissioner Nicole Blissenbach said the department built fraud‑prevention protocols into the application process and worked with the Department of Revenue and DEED. She said DLI’s protocols identified applicants with fraud indicators and prevented payments to over 28,000 applicants during the program and that the identity‑verification process blocked an additional 52,000 applications from inappropriate payment. Blissenbach said those fraud‑prevention measures yielded an estimated $36,000,000 in prevented improper payments.

Blissenbach said the OLA identified 140 applications with fraud indicators in its audit; DLI reviewed those cases and determined some were not fraudulent after follow-up. The department has referred applications it believes were ineligible to the Department of Revenue for recoupment and, where appropriate, to the Bureau of Criminal Apprehension for criminal investigation, she said.

Pratt pressed the department on whether additional prevention measures recommended by legislators should have been adopted before payments were made. Blissenbach said the program included verifications—such as adjusted gross income verified through the Department of Revenue and hours worked reported into the unemployment insurance system—wherever state data could be used, but that some eligibility elements (for example, working in close proximity to non-household members or whether work was performed in person versus remotely) were not independently verifiable and therefore relied on self‑certification under the legislative framework.

Blissenbach said DLI referred ineligible applications identified after the audit to the Department of Revenue for recoupment; she said the department and law enforcement partners are pursuing applications suspected of criminal fraud. The commissioner emphasized the agency’s view that, based on its analysis, the most defensible OLA projection of ineligible payments was 0.2% rather than higher estimates in other scenarios included in the audit report.

Committee members asked for continued follow-up and additional information about final recoupment amounts and referrals to law enforcement.