Auditor Finds Problems with Implementation of Unemployment Insurance Computer System

The Louisiana Workforce Commission (LWC) did not adequately manage the implementation of a new computer system for the state’s unemployment insurance program, the Legislative Auditor said in a report released today.

Because of problems with the implementation, including the lack of adequate testing, LWC issued unemployment insurance payments to ineligible claimants, and many claimants did not receive their benefits timely. In addition, the new system did not interface correctly with other critical systems, and as a result, could not properly communicate unemployment information with other states and the IRS to recover overpayments. As of June 30, 2016, LWC has paid $4.2 million in contract costs associated with the implementation.

According to the auditor’s report, because claims data did not properly convert from the original system to the new web-based system, approximately 35,000 potential fraud investigations remained unworked as of September 2016.

Auditors also found that LWC did not manage requests to modify the computer system, increasing the risk of errors and overpayments, and did not fully test security over the new system by not appropriately restricting administrative access or properly monitoring system activity.

State and federal reporting requirements were also problematic as LWC was unable to provide reliable reports to support financial and federal reporting objectives.

LWC management concurred with the majority of the findings and stated in its response that “the current administration has worked diligently to resolve all issues.” In addition, management added that LWC is working to move the system to the performance and accountability levels it must achieve.