MIDAS mess laid financial waste to thousands
Something is oddly reassuring about the resolution of the Unemployment Insurance Agency benefits debacle that has been going on since 2013.
Last week, we published the Associated Press story about Michigan lawmakers agreeing to set aside $20 million to settle a lawsuit by the people who were wrongly accused of fraud after they sought unemployment benefits.
First and foremost, this moves Michigan closer to resolution of the case that was brought against the state by thousands of victims.
Secondly, it speaks to some intrinsic value in the human element, or at least how important it is to have some thoughtful, careful consideration of a project, even as our abilities to apply and use technological tools sometimes seem puny and inadequate.
We predicted that the state would end up paying dearly for expediency after it cut corners to implement the unemployment system automation called Michigan Integrated Data Automated System (MiDAS). The “robo-” or “auto-adjudication” system issued fraud determinations based on discrepancies in reported earnings, hours worked and other information.
State officials rushed into the implementation of what they later called a “fatally” designed computer program, which led to the improper fraud claims.
Thousands of unemployment applicants ended up being wrongly accused of theft. And, adding insult to injury, a faulty notification process ensured that many people were unaware of alleged discrepancies and unable to respond quickly before determinations against them were finalized.
The state ended up reviewing about 50,000 cases from a nearly two-year period and the best estimate was that about 40,000 people had been wrongly accused of cheating to get jobless aid. They were forced to pay restitution, along with interest and penalties equaling two or four times the alleged overpayment.
Some victims had to hire lawyers. Others filed for bankruptcy, lost wages, suffered poor credit ratings or had trouble finding jobs and housing. What a nightmare scenario.
Their lawyers argued that due-process rights — the right to be heard — had been violated when people tried to extricate themselves from the mess. And the Michigan Supreme Court said, in a 4-3 opinion, that government can be held liable when constitutional rights are violated. That opened the door for last week’s agreement.
State officials already have conducted a probe to determine who was victimized. But the people of the state of Michigan are victims, too.
It would behoove the state to conduct a postmortem with a focus on how the MIDAS project was given the go-ahead without proper due diligence. The computer errors that resulted were egregious, but the fiasco began with some incredibly bad judgment on the part of some human, not some computer.
We need a few good humans to tell us this won’t happen again — and how they’re going to ensure that it never does.
— Traverse City Record Eagle



