SACRAMENTO, CA - More than 80,000 Californians are still waiting for their biweekly unemployment benefits as the California Employment Development Department struggles to fix its new unemployment payment system that went on line over the Labor Day weekend.
The updated program, created by a contractor, is having trouble communicating with the department's 30-year-old computer system and causing the delays with delivering benefits. New York based Deloitte and Touche was awarded the contract to architect and implement the system at a cost of about $97,000,000 to taxpayers. The program called the Continued Claims Redesign, or CCR, is supposed to make the payment and processing system more efficient in determining who should receive benefits and who should be denied.
It's not the first contract Deloitte has had with the state. In fact, the company has worked on state projects dating back to the 1970's.
This is also not the first time there have been problems with Deloitte's publicly funded projects in California. Last year, the state scrubbed a Deloitte project that was supposed to link computers in every municipal and state court across California. The program was initially awarded to Deloitte with a price tag of $33 million. When it was killed, the final bill was almost ten times that amount, $310 million.
Deloitte was also awarded to create an online system through EDD to pay and manage disability insurance claims. That project was supposed to be completed in 2009 for a cost of about $35 million. However, when it was rolled out in October 2012, the final cost to Californians was $158 million and thousands of people reported having trouble using the program.
Former California Fair Political Practices General Counsel Bob Stern said he's baffled as to why Deloitte continues to get state contracts.
"It's incomprehensible to me why the state keeps going back to a company that has not performed to standards and continues to fall down," Stern said.
Deloitte Brand Communication Manager Courtney Flaherty said the company is sensitive to the needs of people waiting for their unemployment benefits and is working closely with the EDD to resolve claims as quickly as possible.
"Although there have been some challenges with a small percentage of California claimant accounts - which is not unusual for a new system this large and complex - there have been far more successes, evident in the continued claims that are being processed every week and the hundreds of millions of dollars in benefits that are being paid out.
"Since California's new UI system launched on September 2nd, almost 930,000 claims have been processed and $520 million in unemployment benefits have been paid," Flaherty said in a statement.
Flaherty also defended Deloitte's work on the EDD's State Disability Insurance Online system, known as SDI, by stating it has won many industry awards, despite some initial challenges.
"In fact, earlier this year, EDD received a Computerworld Honors Laureate award for its 'use of information technology to promote and advance the public welfare, benefit society and change the world for the better,'" Flaherty added.
EDD has not given a definite deadline for when the Continued Claims Redesign will be up and running properly, but EDD and Deloitte said their employees are working together to fix the issues and get unemployed Californians paid.
BELOW read the full statement from Deloitte Brand Communication Manager Courtney Flaherty:
First and foremost, we are extremely sensitive to the needs of UI claimants who have reported issues and we are working closely with our clients to resolve these claims as quickly as possible.
For over 40 years, Deloitte has been dedicated to helping California enhance the delivery of services and benefits to individuals and families.
We are proud of our long-standing commitment to the state, and our role in helping EDD modernize California's outdated unemployment insurance system.
Although there have been some challenges with a small percentage of California claimant accounts - which is not unusual for a new system this large and complex - there have been far more successes, evident in the continued claims that are being processed every week and the hundreds of millions of dollars in benefits that are being paid out.
Since California's new UI system launched on September 2nd, almost 930,000 claims have been processed and $520 million in unemployment benefits have been paid.
EDD's State Disability Insurance (SDI) Online system, also developed by Deloitte, has won numerous industry awards for its innovative technology, despite some initial challenges. In fact, earlier this year, EDD received a Computerworld Honors Laureate award for its "use of information technology to promote and advance the public welfare, benefit society and change the world for the better."
The SDI Online system automates the nation's largest state Disability Insurance program and improves the processing of Disability Insurance and Paid Family Leave benefits. Since it launched, it has significantly expanded access to services, accelerated the delivery of benefits to claimants, and improved the state's ability to detect and prevent fraud.