Kansas Department of Labor concerned about possible rise in unemployment fraud after federal fraud-prevention program is discontinued

TOPEKA, Kan. (WIBW) – The Kansas Department of Labor (KDOL) is concerned about a possible increase in unemployment insurance fraud after the U.S. Department of Labor (USDOL) discontinued a program designed to improve their system’s security.

The Unemployment Insurance Integrity and Fraud Prevention Grant Program was created to prevent and detect unemployment insurance fraud. It funded system security improvements such as identity verification and data analytics.

“The purpose of this grant was program integrity,” said Amber Shultz, Kansas Secretary of Labor. “So that would include systems for fraud prevention and detection… and investigations in cases where we did send out funds.”

It was instituted in all 50 states after the COVID-19 pandemic, when labor departments saw a significant increase in criminals, or “bad actors”, attempting to steal money from pandemic-era government relief programs.

“The lesson we learned during the pandemic was our systems just simply weren’t prepared for that,” Shultz said. “So USDOL recognized that, and they recognized states needed to be provided assistance to be able to combat these bad actors.”

KDOL first received grant funds in 2023, but all funds were cancelled on June 13.

Now, Shultz said they’re left wondering how their systems will hold up in future attacks.

“It concerns me that once the word gets out to these bad actors, that all 50 states are going to be subjected to ‘Oh they’re not going to have the funds, so clearly they’re not going to be as fortified against bad actors.’”

Shultz said the decision to discontinue this program is counterproductive to the federal government’s efforts to improve national security and reduce fraud.

13 News reached out to the U.S. Department of Labor for comment on these changes, but has not received a response.

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