Labor Department to Return $1.4 Billion in Unused COVID Funds, Citing Waste, Fraud

The US Department of Labor, under the leadership of Secretary Lori Chavez-DeRemer, announced on Monday that it will return $1.4 billion in unspent COVID-era funding to the US Department of Treasury’s General Fund, as per Fox News.

This action is part of a broader effort to eliminate waste, fraud, and abuse within the federal government, aligning with the Trump administration’s push for Department of Government Efficiency (DOGE).

According to a press release, the department is also “taking action” to recover the remaining $2.9 billion of the approximately $4.3 billion in funding, which was intended for states to provide temporary unemployment insurance during the pandemic.

The funding originated from the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, designed to expand unemployment insurance for Americans unable to work due to the pandemic. While the program closed in 2021, a 2023 audit by the department’s Office of Inspector General revealed that several states continued spending millions of dollars despite no longer meeting program requirements. The audit specifically “found four states were allowed to access the funding ‘despite not meeting program requirements,’ totaling over $100 million in spending.”

“There’s no reason leftover COVID unemployment funds should still be collecting dust,” DeRemer told the news outlet. “I promised to look out for Americans’ hard-earned tax dollars, and we are delivering at the Department of Labor.”

DeRemer emphasized her commitment to fiscal responsibility:

“Any money still sitting around for pandemic-era unemployment funds is a clear misuse of Americans’ hard-earned tax dollars. I am rooting out waste to ensure American Workers always come First.”

The announcement follows DeRemer’s initial memo to department employees after assuming her role last month, outlining her intention to comply with Trump’s executive orders and collaborate with DOGE to eliminate waste, fraud, and abuse.

In that memo, DeRemer stated:

“Under the leadership of President Trump, our focus remains on promoting job creation, enhancing workforce development, and ensuring safe working conditions, wages, and pensions so that every American has the opportunity to succeed.”

She further challenged employees to identify innovative solutions for optimizing resources and practicing fiscal responsibility, ensuring that taxpayer dollars are utilized effectively, and that the Labor Department aligns with the priorities of the Trump administration.