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Lawmakers hear results of internal audit on Florida's unemployment system

connect, deo hearing
Posted at 6:19 PM, Mar 01, 2021
and last updated 2021-03-01 18:33:44-05

TALLAHASSEE, Fla — The results of an internal audit of Florida’s unemployment system, CONNECT, were given to state lawmakers Monday afternoon. The report emphasized the system’s flaws and the technology updates needed.

“What I like to think of that is we were issued an iPhone in 2013, we didn’t do the updates, or bother to get a new iPhone in the process,” said Dane Eagle, the Executive Director of the DEO.

Eagle spoke to lawmakers on the Senate Select Committee on Pandemic Preparedness and Response about how and why the CONNECT system functioned the way it did last year as the state saw a large influx in claims.

“This connect system is garbage, and everyone has known that, and there’s been reports about how bad it was prior to the pandemic,” said State Senator Randolph Bracy, who represents District 11.

ISF, the third-party vendor tasked with auditing the system, says CONNECT was not designed to handle the number of people that began to file claims in early 2020. ISF officials say the state hit a historic record.

Eagle says based on the data ISF pulled which shows Florida’s unemployment claims since January of 1990, there was no previous indication that would have alerted them to what was coming. State Senator Jason Pizzo believes there was an indication right around the time Deloitte was contracted to build the website and system.

“It’s not like we had 10 years of 2.8% unemployment. The unemployment rates over the years were, in 2010 - 11%, in 2011 - 10% in 2012 - 8.5%. So In 2011, we’re in double digits unemployment with our lowest trust fund balance available, “ said Pizza. “I know you started in September, but what do you have to say for the fact that this state rolled out a website that could handle so few users when we were in the throws of double-digit unemployment. When we talk about 'this was unanticipated' the highest unemployment rate we hit on a monthly basis in 2020 was 13.8%. How the hell did we build a website, pay for a website, when we had those numbers in 2011 going into 2012.”

Eagle says the dip in the trust fund was a “slow burn” over time, “While you could certainly balance it based on the unemployment numbers, the claims in the great recession mirroring where that trust fund dipped, those claims were still at a high of 40,000 at the highest week.”

Eagle says employees at the DEO did all they could to help out-of-work Floridian’s with a failing system.

While the connect system certainly did all of us a disservice, especially the people of Florida, it certainly did the employees a disservice at DEO,” he said.

The report says tremendous growth in a state that runs on tourism and hospitality were key factors into why it saw the highest claim percentage increase out of every other state over an 8 week period. They say between February 29 and April 20, the state saw a 10,340% increase in claims.

Eagle made note that the state's unemployment rate is falling way faster this time around versus 2008 after the US financial crisis. One lawmaker commended the state for still having money in the unemployment trust fund.

There are implications of zeroing out your trust fund — more increased taxes and having to pay back plus interest to the federal government on top of that,” Eagle said.

But Rich Templin who spoke during public comment says that means the system isn’t working as intended and suggests it’s because the system wasn’t paying out claims as it should have.

“That's not a success. That’s a failure. the unemployment insurance system is business insurance. There is no reason in a catastrophic economic collapse like we just experienced, there should be a dime in that trust fund it should be in the red,” he said. “That was what the system was designed for so that money gets out into pockets not only helping unemployed workers but helping the small businesses that rely on those works as customers.”

The ISF report recommended the system be moved to a cloud-based server.

"We are somewhat cloud-based at this point -- we have a long way to go," said Eagle."There are cloud providers out there we could contract with. The Liability is on them, we pay for the service which is less expensive than maintaining the database here in the state of Florida and we can scale up and down as needed."

Lawmakers say this is only the beginning of discussions regarding not only the technology when it comes to CONNECT but also policies surrounding the unemployment system in general.