U.S. official: Key part of Florida unemployment system still doesn’t work

To make the case that senators should allow him to keep his $141,000 job leading the Department of Economic Opportunity, Jesse Panuccio has testified this month about remarkable progress in fixing the state’s glitch-prone unemployment benefits website.

What he hasn’t mentioned is that a key feature of the $63 million CONNECT system — fast, automatic processing of claims — still doesn’t work, according to a recent letter from the U.S. Department of Labor.

The state agency “reported that the auto-adjudication function, which is expected to improve DEO productivity with regard to claims processing, is still in development and projected for implementation this month,” Labor Department administrator Gay Gilbert wrote March 20.

She went on to note that the state will “retain most of the additional staff you have hired to manage the workload and backlogs temporarily until the auto-adjudication system is operational.” In other words, not only does the system not work, but the state is paying people to perform what should be automated tasks.

Repeatedly, Panuccio has told senators that CONNECT has surpassed the previous system, but only through a combination of technical fixes, policy decisions, increased staff and improved management practices. Also helpful is the fact that there are 88,000 fewer claimants because the federal long-term unemployment program wasn’t renewed.

CONNECT’s ability to save money on staff was specified as one of the agency’s top requirements when it invited companies to bid on the project in 2010.

Deloitte Consulting won the contract and is getting about $45 million. Yet because of the missing auto-review feature, a backlog of delayed claims grew 20 percent between CONNECT’s launch in October and mid December.

In January, Panuccio announced that he was hiring 330 additional employees, most of whom would manually review and process the claims, at a cost of $165,000 a week. The backlog has dropped to below 3,000 cases, but the staff remains.

Panuccio hasn’t mentioned the missing automated feature in any of his three confirmation hearings, including Tuesday’s Senate Community Affairs committee, which approved his confirmation as executive director. All committee members voted for confirmation except for Sen. Jack Latvala, R-Clearwater, who did not cast a vote. He chairs the Senate’s ethics and elections committee, which is the last stop for Panuccio’s confirmation before a floor vote.

Panuccio said afterward that the automated feature wasn’t included in CONNECT’s original design. His agency requested the change after the Oct. 15 launch, he said.

“It was not a feature that was supposed to be present at (launch),” Panuccio said.

Later, Panuccio’s office clarified, issuing a statement that the auto review was in place at launch, but only for a “small subset of issues.”

The statement, emailed by DEO spokeswoman Jennifer Diaz, said the auto feature was being expanded to include other issues that, once in place, should expedite reviews for a large number of claimants.

Gilbert’s letter raises other questions about Panuccio’s testimony.

Representatives from the federal Labor Department intervened in January when U.S. Sen. Bill Nelson voiced concern about thousands of unemployed Floridians who had waited weeks for their checks. Under federal advisement, the Department of Economic Opportunity paid about 5,000 cases that had languished.

Panuccio told senators on March 17 that federal officials concluded in February that their weekly meetings with the state agency were no longer necessary.

“They congratulated us on where the system was, (and) said they were satisfied that we were able to get to where we were in just those months,” Panuccio told senators.

Yet Gilbert wrote that federal officials want to expand oversight of the project, which still has other unresolved issues. “Because of the significant technical challenges that occurred during your implementation and because of the number of fixes that have had to be made to the CONNECT system,” Gilbert said Panuccio should hire a consultant to determine how well CONNECT was performing.

The federal government would provide the money necessary for the study, which could cost hundreds of thousands of dollars.

In addition, Gilbert mentioned the state agency’s inability to provide accurate numbers showing how CONNECT is performing.

“We plan to conduct periodic phone calls to continue to monitor work as needed,” Gilbert said. “While we commend DEO for improving access to (unemployment insurance) benefits after it implemented the CONNECT system, more work needs to be done.”

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