MADISON - Gov. Tony Evers sent a letter to U.S. Department of Labor (DOL) Acting Secretary Keith Sonderling and President Donald J. Trump, renewing his request for the department to take critical action to restore approximately $29 million in federal grant funding Wisconsin needs to prevent waste, fraud, and abuse and complete the Evers Administration's years-long efforts to modernize the state's unemployment insurance (UI) system. On the heels of the recent departure of the former U.S. DOL Secretary Lori Chavez-DeRemer, this latest letter comes after several previous letters from Gov. Evers to the Trump Administration have gone largely unaddressed. The governor even went so far as to send a letter to appeal directly to President Trump in February, however, to date, this letter has gone unanswered.
After the coronavirus pandemic overwhelmed Wisconsin's antiquated unemployment system infrastructure, Gov. Evers and the Evers Administration began undertaking sweeping unemployment system modernization efforts. In addition to significantly improving the system's outdated interface, the modernization effort included deploying cutting-edge technology in Wisconsin's UI system to bolster efforts to detect and crack down on fraud, prevent benefit overpayments, and significantly improve efficiency and timeliness.
Under the Evers Administration, Wisconsin has positioned itself to be one of the strongest-performing unemployment insurance programs in the nation. Since the modernization effort began, Wisconsin's unemployment insurance program has been audited nine times over the course of three years and had zero identified instances of previously undiscovered fraud. The Evers Administration was previously awarded federal investments from the U.S. DOL to complete modernization projects of its UI systems to help reduce fraud, reduce overpayments, and improve efficiency in processing benefits. However, last year-inexplicably and without any notice-the Trump Administration chose to terminate $29 million for Wisconsin's modernization efforts, part of the Trump Administration terminating $675 million in grants awarded by the U.S. DOL to UI programs across over 30 states and territories.
According to the Trump Administration, the U.S. DOL terminated the investments Wisconsin was using for modernization efforts to prevent fraud, waste, and abuse because it "does not effectuate agency priorities." The governor's letter today, as well as previous letters, notes the U.S. DOL's refusal to release investments for states to fight fraud, waste, and abuse is incongruous with the Trump Administration's and Republicans' own purported goals of addressing fraud nationwide.
Gov. Evers and the Evers Administration have repeatedly appealed to the Trump Administration, asking them to reconsider their decision, but to date, those attempts have been met with inaction. Gov. Evers again noted in his letter today that the Evers Administration has repeatedly informed the Trump Administration that terminating funding for Wisconsin's modernization effort will "seriously hurt efforts to identify and combat fraud in Wisconsin."
A transcript of the governor's letter to U.S. DOL Acting Secretary Sonderling and President Trump is available below.
Dear Acting Secretary Sonderling:
As the new acting Secretary of the U.S. Department of Labor (U.S. DOL), I write to renew my time-sensitive request made to your predecessor, as well as President Donald J. Trump, urging U.S. DOL to restore approximately $29 million in federal grant funding Wisconsin was awarded to continue our unemployment insurance (UI) system modernization project. This modernized system will bolster Wisconsin's ongoing efforts to prevent benefit fraud, waste, and abuse, a goal the Trump Administration claims to share with my administration, despite this termination of federal funding directly undercutting this work.
As governor, I take preventing fraud, waste, and abuse and ensuring the appropriate use of taxpayer dollars very seriously. After decades of neglect of our state's UI system by my predecessors, my administration got to work fixing our archaic UI system while finding and using innovative, first-of-their-kind solutions to help reduce benefit fraud. In fact, Wisconsin is a leader among states in modernizing its UI systems. Despite this important work, on May 22, 2025, the U.S. DOL terminated $29 million of Wisconsin's UI modernization grant funding that was being used to efficiently and effectively reduce fraud and ensure correct payment of benefits. Notably, U.S. DOL informed Wisconsin that this funding "does not effectuate agency priorities," directly contradicting the Trump Administration's claim to care about addressing waste, fraud, and abuse.
Since this funding was terminated, my administration has repeatedly urged the U.S. DOL to reverse the decision to terminate this funding so that we can expeditiously continue our state's UI program modernization project. We explained in detail to the former U.S. DOL Secretary in a letter dated August 12, 2025, that terminating this funding would seriously hurt our efforts to identify and combat fraud in Wisconsin. After no resolution from the former U.S. DOL Secretary, I appealed directly to President Trump on February 24, urging him to reverse course and restore this funding. To date, I have not received a response from the President.
While my administration continues to make progress in updating our UI system, the U.S. DOL's decision to terminate federal funding has obstructed work on some of the most critical elements of our UI modernization project. The $29 million in terminated federal funds included:
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$11.25 million to create a state-of-the-art web-based and mobile employer portal, including a secure communications infrastructure to reduce improper payments and fraud;
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$6.3 million to prevent and detect fraud, ensure program integrity, and improve cybersecurity and overpayment collections;
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$6.8 million to modernize written communication with all UI customers through an agile and efficient systems interface, reducing costs and staff resources; and
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Nearly $4.5 million to implement identity authentication and identity proofing tools, modernize the application process, enhance automation for case scheduling, and centrally document all interactions on a given claim.
The loss of federal funding to complete this modernization project threatens to hinder Wisconsin's efforts to combat fraud, serve the public, and reduce burdens to businesses. Despite the setback the funding rescission has created, I remain committed to improving our system with whatever resources are available. Thanks to the crucial work by my administration, Wisconsin had positioned itself to be one of the strongest-performing UI programs in the nation. The state's efforts significantly improve fraud prevention, strengthen communications, enhance claimant resources, and leverage technology to speed up processing, all while consistently exceeding or meeting federal timeliness and quality standards.
I urge you to take the critical action your predecessor would not and restore this federal funding Wisconsin desperately needs to continue doing our important work preventing fraud, waste, and abuse in our UI system.
Respectfully,
Tony Evers
Governor
ADDITIONAL BACKGROUND ON EVERS ADMINISTRATION'S EFFORTS TO MODERNIZE THE STATE'S UI SYSTEM TO PREVENT FRAUD, WASTE, AND ABUSE
Wisconsin's unemployment insurance system programming was developed in the early 1970s. The Evers Administration's efforts to modernize Wisconsin's UI system began during the COVID-19 pandemic after decades of inaction by previous administrations and lawmakers were brought to bear during the worst economic crisis in over a decade. The early stages of the pandemic saw state unemployment rates rise from 3.5 percent in February 2020 to 14.8 percent just two months later. Over the course of four years from 2016 through 2019, the Wisconsin Department of Workforce Development (DWD) handled 7.2 million claims. In just the first nine months of 2020, DWD processed nearly 8.8 million claims. This massive influx of claims overwhelmed and backlogged Wisconsin's aging UI processing systems, which, as noted, relied on legacy infrastructure dating to the 1970s.
To help respond to these challenges and finally fix Wisconsin's unemployment system after decades of inaction, Gov. Evers called a special session of the Wisconsin State Legislature and, in February 2021, signed 2021 Act 4, which began the process of modernizing these critical systems to prevent a future emergency from causing a similar crisis. Since then, DWD has advanced swiftly and successfully toward this goal, protecting the integrity of the claims processing system with cutting-edge technology designed to help crack down on fraud and abuse in benefit claims while increasing virtual customer service options.
Importantly, for example, since undertaking modernization efforts under the leadership of Gov. Evers, Wisconsin's UI program at DWD has been audited nine times between the years of 2020 and 2023. All told, the Legislative Audit Bureau was unable to identify any previously undiscovered fraud within the program. However, the U.S. DOL decision to terminate funding halts work on some of the most critical unemployment insurance modernization and anti-fraud prevention projects. The $29 million in terminated funds included:
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$11.25 million to create a state-of-the-art web-based and mobile employer portal, including a secure communications infrastructure to reduce improper payments and fraud;
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$6.3 million to prevent and detect fraud, ensure program integrity, and improve cybersecurity and overpayment collections;
-
$6.8 million to modernize written communication with all UI customers through an agile and efficient systems interface, reducing costs and staff resources; and
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Nearly $4.5 million to implement identity authentication and identity proofing tools, modernize the application process, enhance automation for case scheduling, and centrally document all interactions on a given claim.
In all his letters to the Trump Administration, the governor reiterated the critical need to continue Wisconsin's work to modernize its UI systems and protect the integrity of the state's claims process. More information on DWD's efforts to date to support UI modernization is available on DWD's webpage on UI Modernization.
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