The U.S. Department of Labor has recovered $1.4 billion in unused COVID-era unemployment insurance funds and is working to claw back an additional $2.9 billion, Secretary Lori Chavez-DeRemer announced Tuesday.
The funds, originally allocated to states for temporary unemployment assistance during the pandemic, were part of a $4.3 billion package created under the CARES Act in 2020. A 2023 audit by the department’s Office of Inspector General found that several states continued drawing from the program after it had expired or failed to meet eligibility requirements.
“Any money still sitting around for pandemic-era unemployment funds is a clear misuse of Americans’ hard-earned tax dollars,” said Chavez-DeRemer. “I’m keeping my promise to be a good steward of your money by rooting out waste to ensure American workers always come first.”
Audit found misuse in multiple states
The Temporary Full Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week (TFFF) program closed in 2021. However, the Inspector General’s report revealed that four states continued accessing funds in violation of the program’s criteria, accounting for more than $100 million in unsupported spending.
“It’s unacceptable that billions of dollars went unchecked in a program that ended several years ago,” said Deputy Secretary of Labor Keith Sonderling. “In a huge win for the American taxpayer, we’ve clawed back these unused funds and will keep working to eliminate waste, fraud, and abuse.”
Funds returned to general treasury
The recovered $1.4 billion has been transferred to the U.S. Department of the Treasury’s General Fund. The Department of Labor said further actions are underway to retrieve the remaining balance and prevent future misuse of federal emergency funds.
The move comes amid broader efforts by federal agencies to close out pandemic-era programs and ensure any remaining resources are appropriately accounted for.
