The “tidal wave” of unemployment claims faced by Nevada’s Department of Employment, Training and Rehabilitation (DETR) in 2020 included some 400,000 fraudulent claims, according to a report released this week. A lack of leadership, outdated systems and inefficient processes were also cited as organization-wide issues.
Governor Steve Sisolak, who commissioned the report through creation of his Rapid Response Strike Force, called the findings “sobering,” but added that he’s “committed to ensuring that DETR receives the support it needs to provide critical services to Nevadans in the months and years to come.”
Led by former Assembly member Barbara Buckley, the oversight group was created in August 2020 and tasked with identifying issues within the state’s beleaguered unemployment system and making recommendations to improve its operations and speed the processing of a backlog of claims.
Those claims totaled nearly 814,000, a split of “regular” unemployment claims and Pandemic Unemployment Assistance (PUA) claims, in the first four-and-a-half months of the pandemic. For comparison, Nevada was processing about 20,000 active weekly unemployment claims prior to the state-mandated business closures.
“The state’s unemployment rate was at 30.1%, the highest rate ever recorded for any state in any month, including the Great Depression,” according to Buckley. That total reached 1.5 million initial unemployment claims from the start of the pandemic through December 2020.
As those claims climbed, so did fraudulent ones, which Buckley’s team said used valid data –including correct names and social security numbers–but were filed by criminal networks. Much of the abuse was related to PUA claims, which provide benefits for gig workers and independent contractors—jobs already difficult to track and confirm.
“The result was a flood of claims and a striking level of fraud never seen before that virtually paralyzed the Division,” Buckley said.
DETR also faced challenges due to leadership changes throughout 2020. Sisolak’s first appointee to the role, Tiffany Tyler-Garner, left in late April and was replaced by Silver State Health Exchange executive director Heather Korbulic, who served in an interim capacity. Korbulic successfully launched the PUA program in her short tenure at DETR—less than two full months—before leaving due to threats to her safety.
Last week, Gov. Sisolak confirmed Elisa Cafferata as the permanent director for DETR. She’s been serving in the role in an interim capacity since August 2020.
DETR’s crisis also highlighted the shortcomings of the division’s information technology infrastructure, which in some instances relies on coding that’s more than 20 years old. Updates to the system significantly slowed processing as well. The report states, “The UI system was never designed to handle the unprecedented volume of claims caused by the reaction to the pandemic: a 1,455% increase in claims.”
The Strike Force recommended replacing the system in the near future, but proposed a series of updates that would improve the current system’s performance in the interim. The cost for a new system was estimated to be as much as $42.5 million along with $3-5 million in annual sustainment costs.
The Strike Force’s full report and recommendations can be viewed at https://cms.detr.nv.gov/Content/Media/Strike_Force_Report_2021_FIN.pdf.
