States overpaid billions in unemployment assistance after enhanced and extended benefits were approved. The Labor Department found $12.9 billion in overpayments made in several unemployment programs. Some benefit payments were a result of fraud, according to the Government Accountability Office report. The amount represents about 2% of the roughly $660 billion in unemployment benefits paid out by Treasury. Fraud in the unemployment system can take multiple forms, including criminal actors applying for and stealing benefits from individuals. The GAO report said $1.3 billion in overpayments had been identified as fraud, though that figure is likely to grow. Unemployment system has struggled with inaccurate and incomplete data, analyst says. The number of continuing unemployment benefits claims peaked in June 2020, the U.S. General Accountability Office says. That's because more than 14 million were paid through the program for self-employed workers. The GAO report likely understates the level of fraud in the unemployment system, an analyst says. Unemployment benefit payments remain higher than pre-pandemic levels.