State expects to address outdated unemployment system in next budget

The state's decades-old computer system has remained one of the biggest obstacles in terms of processing and paying claims.

The Wisconsin Department of Workforce Development. (Angela Major / WPR)

The Department of Workforce Development is expected to seek funds in the next state budget to update Wisconsin's decades-old unemployment system, which officials say has hamstrung the department's ability to quickly process claims during the COVID-19 pandemic.

Speaking with reporters on Tuesday, Sept. 29, Gov. Tony Evers responded to criticism raised by Rep. John Nygren, R-Marinette, co-chairman of the Joint Committee on Finance, that DWD has not specifically requested funds to replace the state's system, which uses the 60-year-old COBOL computing language. Evers said the department has made replacing the system a priority and said specifics will be fleshed out during the state budget process.

"It didn't say what it is because they're in the process of evaluating it," Evers said. "I am really happy to have Rep. Nygren behind this because we desperately need it. We needed it in the past, and we look forward to having a more robust and reliable system in the future with his help."

In a statement, Nygren, who has been co-chair of the state budget committee since 2013, faulted Evers and DWD for failing to include a specific funding request to address ongoing concerns about the department's outdated system.

"If DWD were serious about addressing the computer problems, it would have included a request in its agency budget for upgrading IT systems, like other state agencies did," Nygren said.


State departments earlier this month were required to file agency budget requests with the State Budget Office for the 2021-23 biennial budget. While DWD's request did not specify funding to address the outdated computer system, the department lists as a goal "paying unemployment insurance benefits as quickly and accurate as possible."

Agency requests are the first of several steps before a final budget is drafted. The 2021-23 budget is set to take effect July 1. If delayed, state agencies operate at previous budget levels until a new budget goes into effect.

In a cover letter attached to DWD's budget request, former DWD Secretary Caleb Frostman, who was pushed out by Evers earlier this month due to the persistent backlog of claims, said "building an accessible, responsive and robust unemployment insurance program is a top priority for the department."

"A new modernized IT system will provide better, quicker services to future claimants and improve the program's ability to respond to future recessions," Frostman said in the letter. "DWD will continue to work with the Governor's Office to develop an appropriate UI modernization funding strategy throughout the budget process that appropriately recognizes both the urgent need for improvements and the state's fiscal condition."

Nygren said the state's GOP-led budget committee has the authority to approve a specific agency's request, but such a request has not been made by DWD.

"I will consider and evaluate a request from DWD for IT system upgrades," Nygren said in an email. "The fact of the matter is, DWD should be exploring every financing option to get the UI benefits system upgraded if they feel this is a high priority. They should have started a long time ago."

Democratic lawmakers have said challenges presented by DWD's 50-year-old computer system — which cannot take in new claims and process payments simultaneously — have been known for years.

"Nothing was done for six years to update that antiquated technology," Sen. Robert Wirch, D-Somers, said at a meeting of the Senate Labor and Regulatory Reform Committee in May. "Republicans control how the money is spent and the budget, and they chose not to put money in to upgrade the unemployment system."


But Nygren said on Tuesday such a request needs to come from the department itself.

"If the IT system is the problem, DWD should have requested funding for upgrades," Nygren said. "But they did not, and that failure brings into question whether the IT system is truly at fault."

The Department of Workforce Development has faced an unprecedented number of unemployment claims for more than six months as businesses closed or limited services due to the COVID-19 pandemic.

On Tuesday, the department reported more than 6.9 million weekly unemployment claims had been filed since March 15. Of those, about 8.6%, or just under 600,000 claims, were still being processed. More than $3.8 billion in state and federal benefits have been paid since March 15.

To address the influx of claims, DWD has reorganized staff, spent millions of dollars to hire additional adjudicators, expanded call center hours and upgraded technology.

Despite the updates, a state audit released last week found that between March 15 and June 30, less than 1% of calls to the state's call centers were answered.

The Legislative Audit Bureau report found that of the 41.1 million total telephone calls received by DWD call centers over the three-and-a-half-month span, only 0.5% ultimately were answered. More than 93%, or 38.3 million calls, were blocked or met with busy signals, while another 6.2% of callers hung up before receiving an answer.

While call volumes have put immense strain on the department, the state's decades-old computer system has remained one of the biggest obstacles in terms of processing and paying claims.



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