Dateline: Lansing

Legislation affecting AFL-CIO unions and their families

Auditor General Hits Snyder on Screw-Ups in UI Robofraud & Veterans Home

Its not just Flint water that is getting screwed up by the Snyder Administration.
Two recent Auditor General reports have documented widespread problems in how decisions of the Governor
and his appointees have hurt laid off workers and veterans residing in the states Grand Rapids Home for
Veterans.

Robofraud UIA Computers Run Amok

A February performance audit report of the Unemployment Insurance Agency (U IA) showed a consistent
pattern of the agency falsely accusing laid off workers of fraud in applying for UI benefits. The UIA used a
computer to make decisions about fraud accusations without any human oversight. The computer sent
messages to obscure electronic message sites, often 6 months or longer after an individual had returned to work.
When the individuals didnt respond, the computer found them guilty of fraud and assessed 400% penalties plus
12% interest.
Most people found guilty of fraud only found out about the accusation
when their tax refunds were seized or their wages garnished. When these
false accusations were challenged in the UI appeal system, the Auditor
General found that the guilty verdicts for misrepresentation were
upheld on appeal only 8% of the time!
That means that innocent jobless workers were falsely convicted of
fraud 92% of the time by a computer!
This gross miscarriage of justice was the subject of a recent public hearing
on HB 4982, legislation sponsored by Representative Roger Victory, RGeorgetown Township. Victorys bill would require the UIA to send
second notifications of UI benefit redeterminations to laid off workers by
certified mail. The bill also requires human review of computer
Robofraud accusations to make sure that the individual willfully and
intentionally violated the law before pursuing an accusation or imposing
fines.
Several victims of Robofraud testified at a February 18th hearing on HB 4982 before the House Oversight
and Ethics committee.
David Vela told the committee how he received UI benefits when he was laid off from work in 2009. When his
employer called him back to work in 2010, he thought he was through with the UIA. He moved in 2011 but
didnt notify the UIA since his claim was long since settled. In 2012 the UIA computer decided his claim might
be fraudulent and sent a notice to David at the agencys Michigan Web Account Manager (M IWA M) page, an
internal notification system that people can use to check on their UI claim while drawing benefits. David had
no reason to monitor the MIWAM account, since he had been back to work for more than a year.

When he didnt respond, the computer decided that David committed fraud and demanded restitution, a fine and
interest totaling more than $25,000. The first time David even knew that the UIA was accusing him of fraud
was when his wages were garnished to pay his fraud penalty. All told, David had more than $4,800 garnished
from his wages and tax returns and had to work 6-7 days a week for 12 hours a day to pay his bills.
David received help from his union, employer and the University of Michigan Law School Unemployment
Insurance Clinic in trying to fight this unjust fraud accusation. Eventually, an administrative law judge ruled in
Davids favor and he got his money back. After harassing David for years, the UIA didnt even bother to show
up for his hearing.
Davids experience is similar to that of thousands of other laid off workers who have been screwed over by the
Robofraud system and were assessed huge penalties and harassing collection efforts.
House action on HB 4982 is expected later this month. UI advocates and the state AFL-CIO are working with
the bill sponsor and committee members to strengthen the bill.

Privatized Grand Rapids Veterans Home Cited for Short Staffing, Falsifying Records
The state Auditor General has issued a report criticizing the state owned Grand Rapids Home for Veterans for a
variety of deficiencies in treatment of Michigan veterans residing in the home.
After the audit was made public, Jeff Barnes, Governor Snyders appointed director of the Michigan Veteran
Affairs Agency, resigned his position. Barnes had previously served as Snyders campaign manager.
The Snyder administration privatized the staffing of the home several years ago, replacing more than 150 state
workers with a contractual agreement with J2S, a private company. The contract was supposed to provide
quality work at a savings of $4 million, but has been an abysmal failure.
The February performance audit report outlined a number of material conditions which could impair the
ability of management to operate a program in an effective and efficient manner. Sub-standard conditions
identified in the audit include:
43% of resident location checks and 33% of fall alarm checks did not
occur, although records submitted by the home falsely indicated that
the checks occurred 100% and 96% of the time.
The contractor did not meet minimum staffing requirements 81% of the
time, with shortages of staff as high as 22 people on a given day.
The privatized contractor did not develop, execute and monitor
comprehensive care plans, failing to meet timely requirements 25-59%
of the time.
The contractor did not establish adequate control over pharmaceutical
insurance billing, running the risk of losing eligible insurance
reimbursements of $883,700.
The contractor did not track or properly investigate resident complaints, including allegations of
abuse and neglect.
A unique joint meeting of four separate legislative committees are holding a public hearing to discuss the audit.
Committees taking part in the hearing include House Oversight and Ethics, House Military and Veterans Affairs,
Senate Oversight and Senate Veterans, Military Affairs and Homeland Security.