At the onset of the pandemic, the Michigan Unemployment Insurance Agency (UIA) was in a rush to hire thousands of workers (with the help of three staffing agencies). In their haste, they failed to ensure that background checks were conducted. A recent audit found that as a result of this hiring, individuals previously convicted of financial crimes were employed and that the Michigan UIA did not act quickly enough in removing these former workers’ access to sensitive information, leading to one case of fraud totaling $3.8 million.
The audit found that of the approximate 5,500 employees provided by those agencies, “169 were previously convicted of crimes including embezzlement, illegal use of financial transaction devices, false pretenses with intent to defraud, identity theft and armed robbery.” These potentially “disqualifying” convictions would have been uncovered with a proper background check, but the staffing agencies were not required to conduct them (although 2 of the 3 did voluntarily). In any case, the Michigan UIA did not provide them with any guidance on what criminal convictions would disqualify a prospective employee.
“UIA informed us of its failure to provide for background checks on staffing agency and WMA workers was an oversight. However, even after Michigan UIA learned of this oversight in mid-2020, it did not take timely or appropriate measures to correct it,” the audit said.
In response, the Michigan UIA said it is working to strengthen their background check policy.
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Please contact us if you have any questions about how to strengthen your own background screening policies.