DEED official defends Minnesota’s pandemic unemployment response, outlines fraud controls and recovery challenges

Evan Roe, deputy commissioner at the Department of Employment and Economic Development, told the House fraud prevention and state oversight committee on April 7 that Minnesota’s unemployment insurance (UI) system paid about $14,800,000,000 in pandemic-era benefits and processed roughly 1,300,000 applications, with 873,000 Minnesotans receiving at least one payment.

Roe presented a primer on unemployment insurance and explained how federal pandemic programs were delivered through the state system, described fraud and overpayment vectors seen during the pandemic, and summarized the state’s technical and administrative controls. He and committee members discussed federal review findings and recovery rates for overpayments.

Roe said the state’s UI program is a federal–state partnership created under federal law and administered by Minnesota under statutory rules. He described the program’s purpose as “providing workers who are unemployed through no fault of their own a temporary partial wage replacement to assist the unemployed worker to become reemployed,” quoting Minnesota statutes as the underlying policy framework.

Roe outlined the pandemic-era programs that passed through state UI: pandemic emergency unemployment compensation (PEUC), pandemic unemployment assistance (PUA) for workers not otherwise eligible for regular UI, and supplemental federal payments such as Federal Pandemic Unemployment Compensation (FPUC) that temporarily increased weekly benefit amounts. He said roughly $10.4 billion of the total pandemic-era payments to Minnesotans came from federal sources.

On scale, Roe said Minnesota handled “about 1,300,000 applications for benefits and 873,000 Minnesotans received at least one payment,” and that state totals contrasted with earlier years when UI payments were far lower (the transcript cites about $800,000,000 in UI payments in 2019).

Roe identified three primary integrity risk vectors: cybercrime (account imposters and account hijackers), misrepresentation by claimants, and employer reporting issues. He described the state’s layered controls: identity verification and change monitoring, data analytics and anomaly detection, employer notifications and fact-finding, call‑center reporting, random audits of cases, administrative penalties (including a 40% administrative charge on misrepresentation overpayments), and criminal referrals where warranted.

Roe said that according to Department of Labor measures Minnesota has one of the lowest fraud rates in the country and “some of the highest pay and accuracy rates in the country,” and that the state “substantially exceed[s] federal standards” for timeliness and quality in benefit delivery and reviews. He also said the Office of Legislative Auditor and other reviewers have noted strengths and ongoing work to improve processes and technology.

Committee members pressed for details on overpayment and recovery figures. Representative Rearick cited a federal review showing pandemic-program fraud overpayments of $26.3 million with recoveries of $2.9 million and non‑fraud overpayments of $55.3 million with recoveries of $13.3 million; Roe said estimates based on sampling methodologies used by federal reviewers can differ from program‑reported numbers but confirmed the department pursues recoveries through administrative offsets and, when appropriate, criminal referrals to county prosecutors.

Roe said the program has referred several dozen cases to county prosecutors and uses a range of administrative collection tools; he offered to follow up with the committee with more detailed recovery and collection statistics. He also agreed that misclassification of workers by employers (which can shift costs and benefits across funds) is a separate measurement challenge that the state should quantify.

Ending: The committee heard an overview of UI pandemic-era programs, the operational scale of benefit delivery, and the state’s layered anti-fraud measures. Committee members requested additional recovery numbers, methodological details about federal estimates versus state reporting, and further analysis of employer misclassification effects on trust-fund finances.