April 25, 2017
A major overhaul of Pennsylvania's unemployment compensation system is desperately needed, according to a recent probe that slammed state officials for ongoing problems.
On Tuesday, state Auditor General Eugene DePasquale held a press conference to reveal the findings of an audit into the Department of Labor & Industry. The report found "chaos" when examining the Unemployment Compensation Service and Infrastructure Improvement Fund (SIIF), created in 2013 to modernize aging technology being used to administer the program.
“People have a right to be frustrated by what we found here," said DePasquale, who stressed the issues must be addressed immediately.
The investigation revealed the department did not use proper accounting methods to track funds between 2013 and 2016, preventing DePasquale from determining if $178.4 million was spent appropriately.
The audit was launched in January, a month after the state laid off nearly 600 unemployment services workers. The layoffs were prompted by a failure to enact legislation to extend $57.5 million in funding for the program.
Elected leaders could not agree on where to assign blame. Gov. Tom Wolf blamed state Senate Republicans for not holding a vote while GOP lawmakers blamed Wolf for not providing enough information about that money.
Meanwhile, the audit noted the problems date back to 2006 when IBM was awarded a contract to upgrade an "ancient computer system." The company went over budget and eventually did not deliver. The state never received a finished product after paying IBM nearly $170 million over seven years.
“This audit is about more than finding out what happened to the money and how much additional funding is needed to fix the problem,” DePasquale said. “It is about providing the people of Pennsylvania with the level of service they deserve."
The audit found that 312,000 people tried calling the department in January, but 99.3 percent received a busy signal.
According to projections, $159.5 million in additional funding is needed over the next four years to fix the issues.
So far, only $15 million has been secured. On Monday, Wolf signed a bill passed by the General Assembly, but the governor pushed for a long-term solution.
State Senate Republicans agreed, saying the bill "provides breathing room to review the Auditor General’s findings."
DePasquale remains concerned going forward about L&I's ability to implement new policies.
“We are two decades into the 21st century, yet the hundreds of thousands of Pennsylvanians who use the unemployment compensation system each year are relying on an ancient mainframe computer being held together with bubble-gum and rubber bands,” DePasquale said.
