Two leading sources of good journalism in Michigan unknowingly converged today to point out the tragic, wholly incompetent results of the state’s broken unemployment benefits system that falsely accused tens of thousands of workers of engaging in fraud.

Bridge Magazine provides an in-depth look at this catastrophe in which a faulty computer system, which replaced hundreds of workers at the state Unemployment Insurance Agency (UIA) four years ago, was found by an internal audit to exhibit a 93 percent error rate when identifying potentially fraudulent recipients of unemployment checks.

The spectacularly inaccurate computer network is known as MiDAS which, as the name implies, presented a golden opportunity for the state to confiscate more than $1.7 million dollars from Michigan taxpayers.

Workers who had legitimately applied online for unemployment benefits in the past were, without sufficient notice, accused by MiDAS of scamming the system. They had their wages and income tax refunds garnished by the state based on accusations that sometimes dated back several years. In some cases, tens of thousands of dollars were, essentially, stolen by the state from average workers, even pushing some into bankruptcy.

Columnist Susan Demas wrote today that a correlation is unmistakable between the unemployment fiasco and the Flint water crisis, when families’ concerns about drinking water quality were swept aside by the state for many, many months.

The falsely accused were forced to pay back their benefits, Demas noted, and the added interest and penalties — beyond the punishment invoked by any other state — typically amounted to four times the initial repayment.

Demas, editor and publisher of Inside Michigan Politics, offered this conclusion: “… Many who were already reeling from the loss of a job — which is pretty traumatic, in and of itself — say they lost their homes or had to file bankruptcy. It’s amazing how many lives can be damaged and how many families can be uprooted by a computer program error.”

As the Snyder administration backpedals furiously and lawsuits abound, one lawyer seeking a class action lawsuit against the state on behalf of thousands of workers asserted that the malfunctions of the unemployment system represent yet another example in which Gov. Snyder’s nerdy, bookkeeper approach is a failure.

“Government by spreadsheet does not work,” said Royal Oak attorney Jennifer Lord.

Neither does government on automatic pilot.

Bridge, which recently was awarded as Michigan’s best news publication for the second consecutive year, found that many victims were not aware of their “fraud” status for months or years. When the state started confiscating their money, some victims who tried to bypass the MiDAS computer system were ignored by pertinent state employees.

Jason Doss, a suburban Detroit resident, said he called the UIA “five or 10 times before I got through. Then I was on hold for 45 minutes. They transferred me three times. All they could tell me was, ‘You owe $84,000.’”

Bridge writer Ted Roelofs offers several similar examples of individuals who endured financial hardships imposed by the UIA even as these supposed fraudsters could have quickly resolved matters if the state agency was more responsive.

Bridge found that the MiDAS computer system’s conclusions were not to be challenged within the UIA. Here’s more:

At the center of the controversy is the $47-million MiDAS computer system the state installed in 2013 to streamline unemployment fraud detection. That was a year after after UIA laid off 400 full- and part-time employees – a third of its workforce. In essence, the computer system and its algorithms replaced human beings, presiding as judge and jury over tens of thousands of unemployment cases.

As the system’s errors emerged, the agency’s decision to automate the fraud detection process has cast MiDAS as another example of Gov. Rick Snyder’s efforts to make government more efficient having gone horribly wrong. UIA itself boasted in 2014 that the system “is now more responsive and efficient with its customers, thus, creating a greater sense of service-level trust.”

While undeniably more efficient, the computer and the state agency that ran it by all accounts appear to have been singularly unresponsive to the tsunami of complaints and desperate phone calls that poured into UIA after fraud notifications or collections went out to bewildered workers across Michigan.

The Snyder administration is busy making amends, and the bureaucracy surely did not intend to invoke hardship, but the incompetence continues.

The state reported last week that a 3 ½-month software glitch may have allowed some users of MiDAS to access the names and Social Security numbers of nearly 1.9 million workers whose payroll was processed by third-party vendors.

That’s nearly 40 percent of the state workforce.

 

 

 

 

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