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Deloitte Defends Work On Troubled Unemployment System

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TALLAHASSEE (CBSMiami/NSF)  – The company responsible for Florida’s new online unemployment-assistance system is coming out in its own defense after the Department of Economic Opportunity started fining the company for failing to deliver a “fully functioning” system

Deloitte Consulting contends it has completed the work outlined in its contract for the new system, which the company says “has surpassed the performance of the unsustainable systems it replaced.”

Deloitte issued a statement after the state Department of Economic Opportunity on Friday started to impose fines of $15,000 per business day against the Minnesota-based company and withheld a $3 million payment for failing to deliver a “fully functioning” system.

The $62.8 million Connect system went live on Oct. 15 and continues to pose problems for many users and headaches for state officials.

Deloitte spokesman Jonathan Gandal said in a news release late Friday that the company has completed the “tasks and activities outlined in our contract.”

“In just 60 days, the new system has surpassed the performance of the unsustainable systems it replaced, meeting or exceeding longer term key performance indicators by reducing average time to adjudicate separation issues, reducing the number of claims requiring staff intervention, and decreasing average time to implement lower authority appeals,” Gandal said in the release. “Performance will continue to improve as the system matures and as both departmental users and claimants become acclimated to its new functions.”

A Department of Economic Opportunity spokeswoman disputed Gandal’s appraisal of the status of the unemployment system and the state contract.

“No, DEO does not agree with that assessment,” spokeswoman Jennifer Diaz said Monday in an email.

Diaz cited a letter the state sent to Deloitte on Friday that pointed to 25 still-unresolved technical issues and 26 new problems that have cropped up since the system went live.

“For some users of the system — claimants needing a financial bridge as they transition back to employment — the delays caused by these defects have proven to be a true hardship,” department Executive Director Jesse Panuccio wrote in the letter to Deloitte official Jessica Blume.

On Friday, Panuccio announced that the daily fine would be imposed until the technical problems were resolved.

“We always said there are issues with the system, and the question is at what point do we withhold payment and institute penalties,” Panuccio said in an interview. “We think we’ve reached that point.”

No deadline has been set for the system to be fully functional, but additional penalties could be applied if Deloitte is unable to complete the work without more consultants and vendors being brought in to direct and monitor the work.

Gandal in his statement said remaining issues “require departmental actions or are otherwise beyond Deloitte’s control.”

“We will continue to provide warranty support to DEO, in accordance with our contract, and work diligently to resolve any warranty items as they are identified,” Gandal said “We will also continue to work with DEO to clarify the true nature of the remaining issues and will hold ourselves strictly accountable for fixing anything within our control as quickly as possible.”

Connect has been in the works since 2009 to replace a 30-year-old system people used to claim their weekly benefits, monitor accounts and request information. The department provides up to $275 weekly to more than 200,000 jobless Floridians.

The changeover, which is in part covered with federal tax dollars, includes about $28.2 million for Deloitte Consulting to set up the website.

Deloitte was penalized $4.5 million last year by the Department of Economic Opportunity due to project delays.

“The News Service of Florida’s Jim Turner contributed to this report.”

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