During November of last year, California suffered a major disaster with its new online unemployment insurance processing system. The problems were so enormous that thousands of unemployed people had their benefits delayed. According to a Jan. 11 Sacramento Bee article, at least one person said that her checks were delayed for four months. California is still reeling from the outcomes.
The state of Florida passed a law that requires unemployed people to get their benefits online, with no alternatives. A Jan. 12 Miami Herald report stated that Florida's $63 million unemployment website has also failed.
The combination of law and website failure prevents that state's unemployed from getting the money they need to live on.
Was one firm getting these unemployment systems contracts and then failing at them? The answer is yes. Deloitte Consulting is the company that set up new unemployment systems in California, Florida and other states. In other words, one consulting firm is responsible for unemployment insurance system disasters in at least two heavily populated states.
When asked whether Deloitte should be given more state contracts, California governor Jerry Brown said "That's a good question." Brown also said, "It seems like there's been multiple screw-ups."
Brown was confronted with revelations that Deloitte's political action committee handed over $17,000 to his re-election committee. This happened on Sept. 3, 2013, but Brown denied knowing about the donation. According to OpenSecrets.org, 12 of 17 Deloitte PAC lobbyists are former government employees, giving the company a high "revolving door" profile. The PAC handed over almost $4.7 million in political contributions and $3.4 million in lobbying.
Meanwhile in Florida, some are considering changing the law that makes online access the only way to get unemployment benefits. Another proposed solution is to hire another company to fix the malfunctioning computer system. A $3 million payment was withheld from Deloitte and the company is being fined $15,000 a day. There are 53 distinct problems with the Florida system. Only four have been fixed since the system launched in October.
For its part, Deloitte set out to convince several U.S. states that they had the best system. The company website boasts, "Deloitte has worked with states to get through the challenges of the past few years, and we continue to see positive results from our work with them. Deloitte offers you the tools, technology, and approach to address wide fluctuations in claim loads. The dedication of UI program leadership and staff to assisting their fellow citizens during this time of crisis has been critical"
Deloitte's website goes on to say that the company "is proud to have been a part of this effort through implementations of our uFACTS (Unemployment Framework for Automated Claim and Tax Services) Solution Framework in several states, a technology and services offering integrating UI Tax and Benefits functionality."
The first question is answered. One firm is responsible for Unemployment Insurance system failures in Florida and California. A suspicion is confirmed. Deloitte Consulting is active at lobbying and making campaign donations. Finally, Deloitte is good at keeping the government, lobbying and contracting "revolving door" system alive and well.