


The state’s leaders are still not precisely sure how Massachusetts came to spend the wrong money on pandemic-era unemployment benefits, or even how much, but you can bet the erroneously spent dollars were a topic of discussion.
Beacon Hill was abuzz last week, after a routine audit revealed that the Baker Administration, in the middle of his second term, apparently spent $2.5 billion in federal funds on unemployment insurance payouts that were supposed to be covered by Massachusetts tax dollars.
Gov. Maura Healey was the attorney general when that money was spent, so it would be incorrect to imply there is blame to lay at her feet for the error, nevertheless, the state’s current chief executive was immediately asked to answer for the apparent misplacement of billions in COVID funds after she left an afternoon meeting with the House Speaker and Senate President.
“This is something that we became aware of very, very recently,” Healey said alongside Speaker Ron Mariano and Sen. President Karen Spilka.
According to Healey, while it is clear that during the pandemic there were federal funds coming into the state from various pots following the passage of several different pandemic response bills, it is not clear how money was drawn from the wrong account or when it will need to be returned.
“What happened is that there were multiple funds set up, as you know during this COVID pandemic time, and for whatever reason money was drawn from a federal pot instead of a state pot,” she said. “Our plan has been to continue discussion with the U.S. Department of Labor on this and to hopefully be able to resolve things in a way that minimizes any impact to the Commonwealth.”
“We’re sort of in a fact-finding stage right now,” Spilka chimed in. “I think it’s too early to speculate what action we would be taking.”
“We don’t even know how much we owe,” Mariano added.
The audit showed that in 2020 and through the pandemic, the state labor department withdrew federal relief funds for unemployment claims that should have been covered by the state’s Unemployment Trust Fund, which Massachusetts employers pay into, according to labor officials.
“In broad strokes, it was money that was really set aside as a federal account, a federal bucket and we had a state bucket. At some point these two got merged and money was unfortunately drawn down from this federal account,” Healey said.
A U.S. Department of Labor spokesperson confirmed they have been in discussion with state officials about the oversight and are “working with the state on options to rectify the situation.”
The governor said she is confident that steps have already been taken to make sure this sort of mistake does not occur again.