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Department Of Labor Recovers $1.4 Billion Amid $4.3 Billion CARES Act Misuse

Audit Reveals Four States Exhausted Unemployment Funds; Officials Vow To Cut Waste And Recover Additional $2.9 Billion

April 2, 2025

Summary

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More than $1.4 billion in unused COVID-era funds returned to the U.S. Treasury.
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Funds originally part of almost $4.3 billion from the CARES Act for temporary unemployment insurance.
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A 2023 audit revealed that four states improperly accessed over $100 million in expired funds.
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Deputy Secretary Keith Sonderling criticizes the lack of proper controls that allowed the misuse, noting the recovery benefits taxpayers.
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Secretary Chavez-DeRemer’s first memo set a clear standard for responsible financial management and strict adherence to executive orders.

Following an audit, the Department of Labor has returned $1.4 billion to the U.S. Treasury. The audit revealed that nearly $4.3 billion in CARES Act money—intended for temporary unemployment insurance during the early stages of the COVID-19 crisis—was used even after its expiration in 2021. Four states continued to draw on these funds, spending over $100 million when the support should have been discontinued.

Secretary Lori Chavez-DeRemer addressed the issue directly, stating, "Any money still available for pandemic-era unemployment funds is a clear misuse of Americans’ hard-earned tax dollars." In response, she is working closely with the Department of Government Efficiency to ensure that no more funds escape proper oversight. Deputy Secretary Keith Sonderling emphasized the need for accountability, criticizing the oversight failures that allowed this repeated misuse, and noted that the recovery benefits American taxpayers. He also mentioned that the department is now attempting to recover an additional $2.9 billion in excess funds.

From the beginning, Chavez-DeRemer made it clear that fiscal responsibility is the top priority. She has committed to cutting unnecessary spending and eliminating unnecessary contracts, including $125 million in projects that comprise a $32 million allocation for diversity, equity, and inclusion training. The emphasis remains on streamlining operations and providing better support for American workers.

In a direct address to agency staff, she outlined a vision for a more streamlined, more accountable department focused on job creation, workforce development, and ensuring safe working conditions. Her message was straightforward: cut the waste and spend money wisely.

This thorough review and the subsequent recovery of funds could serve as an example for other federal agencies. By focusing on programs that have expired yet continue to drain public resources, the Labor Department is taking clear steps towards a more efficient and accountable federal government.

For many, recovering $1.4 billion—with plans to recover another $2.9 billion—marks a significant shift in federal spending practices. It’s a crucial move aimed at protecting taxpayer money and setting a higher standard for responsible fiscal management across government agencies.