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Top Wisconsin DWD official under fire over unemployment claim issues

Thousands are still in pending status
madison-wisconsin
Posted at 4:10 PM, Dec 16, 2020
and last updated 2020-12-16 19:33:24-05

MADISON — State lawmakers fired questions at the head of the state's unemployment agency Wednesday following an audit that exposed issues in the way it processed claims.

Department of Workforce Development Transition Director Amy Pechacek sat before the Joint Legislative Audit Committee, in regard to this week's audit and two others that probed the department's operations.

"It is clear to me that the operational challenges at UI (unemployment insurance) have grown over time," she said in a prepared statement. "While the dedicated staff were able to work around these issues during times of stability, the impact of the COVID-19 pandemic on our state has exposed long-standing challenges that proved too much to overcome in the timeframe needed to best serve the people of Wisconsin."

Pechacek took over the DWD in late September after then-Secretary Caleb Frostman was fired by Gov. Tony Evers.

The audit this week found the department sent the majority of unemployment claims into adjudication, while they determined each applicant's eligibility. In most of those cases, the department either had the information needed to process the claim or failed to request it from the previous employer or the applicant themselves.

The audit requested the department take its findings to help mitigate the delays, among other recommendations.

"We very much understand that every single day matters to folks waiting to hear whether they are eligible for benefits and when they actually get paid so we will certainly use the report's analysis to help make more timely decisions," Pechacek said in her prepared testimony. "DWD is steadfastly working to resolve all eligibility determinations so that we can resume our timely administration of claims while also implementing long-term changes to prevent and prepare for any similar crises in the future."

She also laid out a list of plans Wednesday, including an overhaul of the state's 50-year old claims processing technology, something her predecessor pointed to as a major hurdle in processing claims. Pechacek said it's a top budget priority for the governor next year.

But it comes with a hefty price tag, $50 to $70 million dollars. And some lawmakers argue the technology doesn't solve the root of the problem.

"I think adjudication is obviously our bottleneck," said state. Sen. Chris Kapenga, R-Delafield.

The most recent audit showed claims were processed faster as the department hired and on-boarded more adjudicators, pointed out by Wisconsin State Auditor Joe Chrisman earlier in the hearing.

The committee debated where the responsibility lies to prevent a backlog like this from occurring again. Democrats pointed to the antiquated technology along with strict eligibility laws as obstacles, while Republicans argue it's an issue of departmental management.

Meanwhile, Pechacek said the department is working to implement all of the recommendations laid out in this most recent audit, adding it has completed those put forth in the previous two.

The first audit released in July dealt with a mistake that led to an overpayment of federal benefits at the beginning of the pandemic. The DWD blames that overpayment on a programming error.

The second audit, released in September, examined the state's call centers and their effectiveness to help answer unemployed residents' questions and process claims.

It found that less than 1 percent of calls were originally answered at the beginning of the pandemic.

After spending millions in contracts to bring on additional call center help, the system wasn't fully functional until July.

Pechacek told lawmakers Wednesday that she hopes some changes in the works will help prevent a backlog from occurring again. Including a streamlined unemployment application process.

She said the department has agreed to more than $2 million in contracts with Google to help simplify that process, as well as use analytics to predict eligibility for those still in pending status.

Questions about the accuracy of that process submitted by TMJ4 have yet to be answered.

Currently, 41,734 people are still stuck in the unemployment backlog, according to the DWD's latest update.

Pechacek admitted during Wednesday's meeting that it does not include the 14,000 individuals who were denied and are appealing the department's decision.

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