State officials said Thursday that struggles processing unemployment claims at the Kansas Department of Labor are a prime example of why modernization is needed, although lawmakers argue the agency has been dragging its feet on the improvements.
Brett Flaschbarth, deputy secretary at KDOL, said the state’s mainframe system, which is the backbone for claim processing, was developed over 40 years ago and that meaningful change hasn’t occurred in well over a decade.
That became evident, he noted, during the COVID-19 pandemic, when the agency became overwhelmed with a backlog of unemployment claims from those suffering from the resulting economic recession.
The fallout resulted in the resignation of Labor Secretary Delia Garcia, with Gov. Laura Kelly vowing to make changes in the department, though also noting Garcia inherited a department that had been "gutted" by former Gov. Sam Brownback.
But Flaschbarth told lawmakers on the Joint Committee for Information Technology that states which had modernized their IT systems in recent years had fared better during the pandemic.
A coalition of agencies in 18 other states, alongside federal and private sector partners, had already fully boosted their claims and tax filing systems — and the results showed, he argued.
"States that are modernizing versus those states that are not, there was a clear line of demarcation of those states that were going to be better positioned to handle (COVID-19)," Flaschbarth said.
In Kansas, meanwhile, aging systems led to more crashes and outages, with KDOL having to divert resources to correct the problems instead of providing customer support for anguished claimants.
But some legislators believe KDOL has been too slow in figuring out a way forward on the matter.
Sen. Caryn Tyson, R-Parker, said modernization needed to be a "top priority" for the agency.
She questioned whether progress had stalled under Kelly’s administration, saying Brownback’s team was ready to move on soliciting bids for IT upgrades two years ago.
"You have heard the term analysis paralysis. Well it seems to me that we might be there because you guys have been looking at this for over two years," Tyson said. "And this has become one of the major, if not the major, issues for the state of Kansas."
Flaschbarth argued that Brownback’s administration hadn’t been as close to starting work on modernization as Tyson said.
He also countered that the state was putting significant energy into studying both other states’ experiences and options for vendors. That is all to ensure a project that was completed quickly and within budget.
"We really want to make sure that we are measuring twice and cutting once," Flaschbarth said, adding that a feasibility study on the matter would be finished before the end of the month.
But Tyson pointed to not just the backlog of claims but also a dramatic uptick in fraudulent filings, with crooks using stolen personal information to file false claims posing as individuals who have not lost their jobs.
All 50 states have been under siege with fraudulent claims in the Pandemic Unemployment Assistance program, the temporary aid program launched during the pandemic.
KDOL has reported being hit with as many as 40,000 bogus claims and while Acting Secretary Ryan Wright told The Topeka Capital-Journal last month that they had caught most of them, he acknowledged some likely had been paid out.
"I mean, this is out of control," Tyson said.
But others noted that an up-to-date system wouldn’t be a silver bullet.
"Fraud attempts will happen whether the system is modernized or not," said Rep. Jeff Pittman, D-Leavenworth, although he cautioned that "doesn’t mean we don’t need a better strategy in the state."
Flaschbarth did report that the overall backlog of unemployment claims had been reduced since late summer, saying the outstanding filings had been slashed from 20,000 to 8,000.
That pleased Sen. Kevin Braun, R-Kansas City, Kan., who expressed major reservations about KDOL’s outlook in August.
"I believe you delivered on your commitment," Braun said.