On July 13, 2023, immediately after announcing the cancellation of much of the ARPA funding for UI Modernization, US DOL announced plans for remaining ARPA funds that were reduced due to the Fiscal Responsibility Act of 2023 (FRA). See Announcement of Grant Opportunities and National Identity (ID) Verification Offering under the American Rescue Plan Act (ARPA) (dol.gov)

The announcement provides details about Grant Opportunities and National Identity (ID) Verification

The Department is deploying the remaining funds in concert with a government-wide focus on combating identity fraud in government programs, which intensified during the pandemic and continues. The UIPL represents a key component of the Department’s response to the report1 by the U.S. Government Accountability Office (GAO) in June 2022, that designated the UI program as High Risk, and called for the Department to act to transform the program in areas of fraud prevention, infrastructure, and service delivery. In line with GAO recommendations, the UIPL unveils a comprehensive, strategic approach to deploying remaining UI modernization funds to improve the future integrity of the UI system— directing the available funds and Department-provided supports to states to address fraud prevention and system modernization.

The vulnerability of the UI system to fraud is a symptom of systemic challenges, especially the condition and design of IT systems, which were unable to fully respond to the huge increase in claims and exponential growth in complex fraud attacks during the pandemic. The development of resilient IT systems that can continuously adapt to changing conditions and integrate evolving fraud prevention technologies is needed for Unemployment Insurance:

Transformation Needed to Address Program Design, Infrastructure, and Integrity Risks, published June 2022. https://www.gao.gov/assets/gao-22-105162.pdf.

Protecting the program is a critical component of a comprehensive program integrity strategy. Such investments in IT infrastructure protect the system from fraud, while also providing a mechanism to promote equitable access, increase timely access to benefits and deliver improved customer experience. These IT investments complement targeted antifraud strategies like ID verification, data analytics, and cross-matching that will also be expanded through the funding in this UIPL—including a new national offering of government-operated ID verification services through Login.gov and the U.S. Postal Service (USPS) to states. The systematic challenges exposed by the pandemic evolved over decades and will take years to remedy, but the investments outlined in this UIPL, in addition to the related funding provided in previous UIPLs, mark the most ambitious efforts to date to drive such change.

The deadline for state workforce agencies to express interest and apply for grants is August 18, 2023.

That provides a short period of time to develop grant proposals, but much of the proposal detail addresses integrity and benefit access issues that were the subject of earlier UI-Pls. As the UI-PL points out, a concerted long-term effort to address systems, identity verification and integrity is needed. We hope that this is the beginning of improved federal support for the proper administration of the state administered UI system.