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Florida’s unemployment system cursed by bad design, lax oversight, audit says

Lawrence Mower
·6 min read

An inspector general probe into Florida’s failed unemployment system found that the system was never prepared to handle even a modest amount of jobless claims, much less the historic number of claims that crushed it during the pandemic last year.

In the report, released by Gov. Ron DeSantis on Thursday, Chief Inspector General Melinda Miguel found that state officials provided poor oversight and never fixed longstanding problems with the online system, known as CONNECT.

The report found:

  • The Department of Economic Opportunity originally requested the system be able to handle 200,000 concurrent users. But Deloitte Consulting, the company that built it, only tested its system to handle 4,200 concurrent users — a drastically low number that caused the system to fail when it was rolled out in 2013, and fail again last year, when it was overwhelmed by hundreds of thousands of desperate Floridians hoping to file unemployment claims.

A screenshot of CONNECT, Florida’s $63 million unemployment insurance website.
A screenshot of CONNECT, Florida’s $63 million unemployment insurance website.
  • Despite its original guidelines, the Department of Economic Opportunity never held Deloitte to that higher 200,000 number. After the state scrambled to beef up CONNECT during the pandemic, adding 72 additional servers, it can still only handle 100,000 concurrent users — half of what was promised.

  • The company hired to independently evaluate CONNECT before it went live in 2013, Ernst & Young, was “neither fully independent nor adequately rigorous,” the inspector general wrote. The company was paid more than $2 million for its services, but paid the state back $500,000 in 2015.

  • CONNECT had so many defects and problems that when it went live in 2013 it violated the state’s contract with Deloitte.

  • Those defects and problems with CONNECT persisted. State auditors flagged them in 2015, 2016 and 2019. Despite that clear record, neither the administrations of Gov. Rick Scott nor DeSantis remedied the errors. Of the 31 issues auditors flagged in 2015, 14 remain unfixed.

After investigating CONNECT, Chief Inspector General Melinda Miguel recommended state leaders adhere to basic — and obvious — oversight and governance of its information technology projects, including:

  • Ensuring projects have independent reviews that are overseen by the state’s chief information officer

  • Ensure agency heads resolve technical problems flagged by state auditors

  • Move CONNECT’s replacement into the cloud, where it can better handle extreme workloads

The inspector general’s investigation was requested by DeSantis last year, after CONNECT failed amid a crush of jobless claims triggered by the pandemic. DeSantis said at the time he believed the system was designed to fail, although the report does not address that assertion.

Deloitte’s response

In response to Thursday’s report, Deloitte said that it hasn’t worked on CONNECT since May 2015.

“We are very sympathetic to the challenges some Florida residents have faced trying to access Reemployment Assistance,” said Jonathan Gandal, Deloitte Services’ managing director, in a statement. “We finished work on the CONNECT project nearly six years ago after the state accepted the system and we met all of our obligations.”

The company’s representatives are scheduled to give a presentation to state senators on Monday.

Thursday’s report generated outrage from state Rep. Anna Eskamani, D-Orlando, who said in a statement it “reinforces what we already knew to be true: CONNECT was set up to fail.”

Scott, now a U.S. Senator, presided as governor over the design, rollout and mistakes flagged twice by state auditors. His spokesman, McKinley Lewis, noted that “Scott took numerous actions to levy fines against and withhold payment from Deloitte to hold them accountable.”

“Any insinuation that this system was not designed to help out-of-work Floridians get back on their feet and into the workforce is false and ridiculous on its face,” Lewis said.

Thursday’s report also does not address why the problems flagged by repeatedly by state auditors were never fixed.

But it does dig deep into the history of CONNECT, revealing how state officials were aware that the Deloitte software underpinning the system was problematic.

A look back

When the state chose Deloitte for the project, in 2011, it was with the understanding that other states had already used the company’s system. State officials were hoping that by the time CONNECT was scheduled to go live to the public, in late 2012, any issues with the Deloitte’s system would have been ironed out by Massachusetts, according to the inspector general report.

By by 2012, Massachusetts was years behind schedule, and they had uncovered serious problems with Deloitte’s software. Officials in Florida, Massachusetts and New Mexico teamed up that year in the hopes that Deloitte would “address and resolve the concerns,” wrote officials in those states.

Later that year, Florida’s project manager, Tom McCullion, wrote in an email that the system “is unstable and does not provide the required functionality.”

A few days later, the state wrote to Deloitte that it intended to fire the company rather than amend its contract.

“The Department contracted for a viable, proven solution,” state officials wrote. “It now appears that the Department is being asked to fund a software development project with limited prospects for success.”

The state decided to stay with Deloitte anyway, delaying CONNECT’s rollout until October 2013 and docking the company nearly $4.5 million. Deloitte would be paid $46 million in all, and the overall project would cost $81 million, nearly 20 percent higher than its original budget, according to the inspector general’s report.

But problems would persist with CONNECT that violated the state’s agreement with Deloitte, according to the report. The day before CONNECT went live, the system had been flagged for 11 “fatal” defects, defined as the “loss of essential functions for which no workaround exists,” and 142 “severe” ones.

Under the state’s contract, it was supposed to have no fatal defects and no more than 25 severe ones.

The state inspector general found that Ernst & Young’s independent tests of the system were not independent — the state had made the company report to someone else, instead of the project manager. The company was supposed to be interviewing project staff, but went two years without interviewing any of them, leading the state to dock the company $500,000.

When CONNECT did go live on Oct. 15, 2013, it was a disastrous preview of what millions of Floridians experienced this year: the site immediately failed, people couldn’t file claims and their payments were delayed.

The system was brought back online, but serious problems with the site were never fixed. Meanwhile, New Mexico kept upgrading its system and Massachusetts moved its into the cloud, allowing those states to better weather the pandemic’s toll on jobs.