In Massachusetts, local leaders pushed the governor to file legislation for statewide reform, after it was revealed that retired public employees were receiving pension checks and unemployment benefits at the same time.
Antiquated Systems Contributing to Payment Mistakes
Solis told ABC News that much of the wasteful spending could be attributed to unusually old computer systems states continue to rely on to keep track of their unemployment rolls.
"A lot has to do with antiquated systems that haven't been updated, like computerized systems that are maybe 20 or 30 years old that can't detect appropriately incoming information that should be applied or updated," Solis said.
"You could have an employee who was terminated or lost their job for whatever reason and then comes back or may starts employment again and doesn't report when exactly they start to work," she told ABC News. "They may collect in that time period, say, three weeks' worth of [unemployment] benefits."
A July 2010 survey by the National Association of State Work Force Agencies and Information Technology Support Center found that the average age of a state benefits system was 22 years; the oldest system, 42 years.
According to the association, with the computers so aged, they have a difficult time detecting fraud, abuse or simple mistakes.
Solis said that $192 million had been set aside to help upgrade the states' systems but that individual governments needed to look in their own coffers for additional funds.
Six states -- Colorado, Arizona, Indiana, Louisiana, Virginia and Washington -- are currently on a special federal "high priority" watchlist due to ongoing high rates of improper payments.
Mark Everson, the commissioner of Indiana's Department of Workforce Development, which runs the state's unemployment insurance system, called Indiana's 60 percent improper payment rate from last year misleading.
"That's just poppycock. To suggest that 60 percent of the people shouldn't have been drawing benefits, which is what they're suggesting, that just makes no sense at all," he said. "If you believe that, then 224,000 people should've been thrown off the unemployment rolls. That's just crazy."
Everson said that much of the problem in Indiana traces back to people failing to properly register for the state's job bank, or to properly step through every one of what he said were unusually challenging steps in Indiana to qualify for unemployment.
"I don't think these can be characterized as improper payments," he said.
However, the federal government stood by its numbers, saying Indiana had not properly complied with its own state laws, and was not enforcing the safeguards its own legislature put in place against improper payments. "We're holding them accountable to that," Solis said. "We're saying that you're not closing the gap when it comes to improper payments."
Everson did note that his office was working with the Labor Department to improve its procedures and make its system tighter.
When asked why Indiana had also failed to adopt the Treasury Offset Program to work with I.R.S. to collect money, Everson told ABC News he would begin the process of implementing the program after Indiana completed a large computer infrastructure upgrade. He expects that upgrade to be complete by the end of the year. Everson also said he believes the money he could collect every year by participating in the Treasury Offset Program would be enough to pay for his state's entire computer upgrade.