TALLAHASSEE, Fla. — A state investigation is confirming nearly a year’s worth of Spectrum News reporting: that Florida’s unemployment system is not only plagued by widespread problems, but that warning signs predicting those very problems were ignored.
The governor’s office released a preliminary report Thursday, published by the Office of the Inspector General.
What You Need To Know
- Preliminary report says the Deloitte system was not working at the contract-mandated capacity when the state took it over
- Deloitte says the company hasn't been involved with the CONNECT site in 6 years
- DEO system needs $244 million investment, executive director says
- State is also investigating unemployment fraud, but does not know how much the state has paid out
The agency launched the latest review nearly 10 months ago at the directive of Gov. Ron DeSantis.
The report found Florida Department of Economic Opportunity ultimately overpaid for its CONNECT unemployment system; a system that was not properly designed nor tested.
“We determined that the requirements for system capacity, as outlined in the 2010 ITN, were never fully tested nor documented,” Inspector General investigators wrote in the preliminary report released Thursday. “The contract mandated system capacity for a minimum of 200,000 concurrent external users. We could not find evidence where DEO enforced this contract requirement.
"Deloitte’s stress testing documentation shows testing was for approximately 4,200 concurrent users (internal and external)," the report continued. "By not meeting contractual capacities, the CONNECT system was poorly positioned to handle unprecedented claim volume beginning in March/April 2020.”
The agency says DEO ultimately paid, between 2009 and 2015, $81.6 million for the design and rollout of the CONNECT system, which was $13.4 million more than originally planned.
NEW: Governor’s office just released the Inspector General’s prelim report into past and current problems with FL DEO’s CONNECT unemployment program.— Greg Angel (@NewsGuyGreg) March 4, 2021
Report: https://t.co/g8W1rDkUQ7 https://t.co/qTLvBx3Fxj pic.twitter.com/fPwuzyqRzA
From the outset, the report says, CONNECT was immediately failing.
“At Go-Live, on October 15, 2013, the CONNECT system immediately experienced numerous issues,” the report said.
The Inspector General’s report also outlined past warning signs that seem to have gone overlooked or ignored.
“The code review performed during the Warranty Performance Period identified 51 total key findings, 25 risks and issues, and 37 recommendations,” the report said. “The State of Florida Auditor General issued three operational and performance audits of the CONNECT system, between 2015 and 2019. The 2015 report identified 31 findings, over half of which were still unresolved as of the 2019 report. A fourth operational audit completed in 2021 and not yet finalized, identifies 14 issues still outstanding.”
Among the recommendations, the Office of Inspector General warns agencies like DEO need to be more aware of IT issues.
“Agencies should better monitor what they are getting from the vendor and build in an escape plan and financial penalties for noncompliance,” the report stated.
In building its report and investigation, the Office of Inspector General interviewed dozens of past and current employees involved in the CONNECT system or DEO.
Among those interviewed were former CONNECT project directors at DEO, as well as employees of Deloitte Consulting.
For nearly a year now, Spectrum News has exhaustively showcased the problems within the system, many of which still exist today.
Many Floridians complain the system is still clogged with glitches and technology issues stalling their claims, leading them to wait for payments for several months now.
DEO Executive Director Dane Eagle told Spectrum News this week that his agency is continuing to work as quickly as possible to clear up the claims backlog, but admitted his agency’s abilities are limited.
- RELATED: “We Hear You”: DEO Head Dane Eagle Seeks Funding, Fixes to Persistent Unemployment Problems
Eagle said he is pressuring lawmakers to fund more employees and an entirely new unemployment system altogether.
Thursday’s release of the preliminary state inspector general investigation follows another audit DEO released last week.
The agency paid $247,000 for an independent review of the operations of CONNECT.
That study came back to suggest the agency would need upwards of $244 million over five years to replace the CONNECT system with a program that’s more functional.
That independent review also urged DEO to perform more regularly IT maintenance. Eagle, who took over as DEO’s executive director in September, told lawmakers this week that CONNECT is much like a ‘2006 iPhone that’s never been upgraded’.
Florida paid $81M+ for a system it never truly test drove.— Greg Angel (@NewsGuyGreg) March 4, 2021
Report: Contract required Deloitte build a system that could host 200K users at the same time. Deloitte only tested 4,200 users and DEO never checked.
Report: https://t.co/g8W1rD3jrx https://t.co/tjCr28YqkY pic.twitter.com/XXi6nAPhCR
The Inspector General’s report says the crush of problems at the start of the pandemic was the result of failures by both Deloitte and DEO.
The report states Deloitte failed to meet the demands of the contract by designing a system that could handle 200,000 users at the same time, and that DEO failed to review and confirm the system was created as contracted.
“By not meeting contractual capacities, the CONNECT system was poorly positioned to handle the unprecedented claims volume beginning in March/April 2020,” the report stated.
In illustrating the increased demand, the report outlines the waves of claim requests over time.
- March 2011 (Deloitte given CONNECT contract): 73,241 initial claims filed
- October 2013 (CONNECT went online): 66,161 initial claims filed
- February 2020 (pre-pandemic): 20,600 initial claims filed
- March 2020 (Start of pandemic impacts): 372,727 initial claims filed
- April 2020: 606,591 initial claims filed
- May 2020: 898,293 initial claims filed
“Some of the negative impacts to the CONNECT system were due to the complex federal regulations of the program and the normal functioning of the system’s fraud controls, leading to a high rejection rate for claims before the COVID-19 pandemic,” the report stated. “In calendar year 2019, for example, 68% of claims were rejected, according to DEO.”
In April 2020, Spectrum News reported on a sudden surge of claims inaccurately labeled as “ineligible”.
In running up to the rush of impacts, DEO spent more than $125 million to add servers and third party call center support agents to the system to process claims and answer questions.
“Prior to the COVID-19 pandemic in early 2020, the system’s eight web servers had an average concurrent user volume of approximately 10,000 users,” the report stated. “Due to the unprecedented increase in the number of claimants trying to access the system in March 2020, DEO added approximately 80 cloud based web servers to increase the capacity to approximately 100,000 concurrent users. Additionally, DEO relocated 72 servers from the disaster recovery backup site to supplement on-premises production services.”
Despite signing deals with three third party call center companies, users still faced extensive wait times and often the ability to get clear answers or solutions from agents.
The report itself extensively covers the design, creation, and rollout of CONNECT, which happened under Gov. Rick Scott's administration.
Overall, the report found that Deloitte and DEO made a series of repeated errors and flaws, and often ignored issues that should not have been.
“We determined Deloitte’s project documentation indicated the number of known fatal and severe system defects at Go-Live were greater than allowed in the contract and amendments,” the report stated.
In commenting on the report, a Deloitte spokesperson pointed out that the company had not worked on the site since 2015, and the system was performing well at the time.
“We are very sympathetic to the challenges some Florida residents have faced trying to access Reemployment Assistance, particularly at the outset of the pandemic.
"We finished work on the CONNECT project nearly six years ago after the State accepted the system and we met all of our obligations. We have not worked on CONNECT since May 2015, at which time the system was performing well above the agreed-upon standard for system availability and far exceeding the performance of the system it replaced.
"The drastic spike in COVID-related jobless claims overwhelmed many states’ unemployment systems, taxing even those that had the latest technological updates. Since the pandemic began, Deloitte has been proud to support several state clients that have paid more than $160 billion in benefits to unemployed workers and their families.”