COLUMBUS, Ohio — According to a report released by the Ohio Auditor's Office, the state lost nearly $4 billion in unemployment fraud and overpayments due to "lack of controls" at the Ohio Department of Job and Family Services.

What You Need To Know

  • The Ohio Auditor’s Office estimates that the state wasted nearly $4 billion in unemployment during the pandemic

  • An estimated $3.3 billion went toward overpayment of unemployment claims

  • An estimated $475 million was spent on fraudulent unemployment claims

  • The state has entered a public-private partnership to investigate where the money went and possibly recover some of the funds

"Ohio's unemployment compensation system failed in a massive way," said Keith Faber, R-Ohio.

Faber said the state misspent $3.8 billion dollars from the beginning of the pandemic up until the middle of this year.

"That's unacceptable. Ohioans should expect and demand better," Faber said.

The auditor's office found the Ohio Department of Jobs and Family Services overpaid $3.3 billion in unemployment claims while $475 million ​were given to fraudsters for fake people called 'Adidas,' 'Dummy' and others.

"I had a claim in the name of Keith Faber at the state auditor's office. But because they sent the claim to our office, my team said, 'No, I think Faber [is] still working here,'" explained Faber.

Faber said his office began looking into the issue after ODJFS initially failed to disclose the risk and magnitude of ongoing fraud within the unemployment system.

"Had they stepped up and worked on trying to solve those problems, who knows what the outcome would have been. It's unlikely it would have been a $3.8 billion problem," Faber said. 

The governor's office says the state has been forthcoming about the issue.

"ODJFS has been very transparent in what the issues are prior to this report coming out," said Gov. Mike DeWine's press secretary Dan Tierney.

Tierney said there were always going to be issues with the exponential spike in claims at the height of the pandemic along with federal red tape.

"Because the pandemic was unfolding in real time with things that had never been anticipated for, this system or in general across the United States, this was a problem that we saw in all 50 states," said Tierney.

Matt Damschroder was appointed interim director of ODJFS in March after former director Kim Henderson left. Faber said the issues took place under her watch. Since Damschroder was named permanent director in July, ODJFS has been trying to upgrade its outdated equipment while working in a public-private partnership to investigate and possibly recover some of the money.

"We've made tremendous progress. We continue to evaluate vendors and other service offerings and certainly employees who have ideas and things that they recognize (and) have opportunities to bring those forward so we can address them," said Damschroder. 

But while improvements and inquiries are being made, who is ultimately responsible? Greg Lawson with the Buckeye Institute. a statewide think tank that monitors government spending, says it's on the DeWine administration.

"A lot of people are upset about it and the voters are going to have an opportunity to figure out what to do about that. And who knows how that's going to play out. I think a lot of it's going to depend on, do we have faith that fixes are being made," said Lawson.

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