State audit highly critical of Florida's unemployment system CONNECT

Published Feb. 28, 2015

TALLAHASSEE — Ever since the troubled launch of the state's unemployment website in October 2013, Gov. Rick Scott and his team have staunchly defended the lifeline for hundreds of thousands of jobless Floridians.

But on Friday, the state's auditor general issued a scathing 45-page audit that joins mounting evidence that CONNECT is a system in disarray.

The audit found lapses that seemed to touch on every facet of CONNECT, which now costs $77 million, more than $14 million more than the previous estimate of the website.

The audit covers the period between Feb. 24, 2014, and June 30, 2014, when 500,000 claims were processed. It identified numerous areas of concern, including:

Security: The agency that oversaw CONNECT, the Department of Economic Opportunity, broke state law by requiring claimants to log on to the system using their Social Security numbers. Agencies must not require SSNs when they aren't imperative, but because the DEO did, it subjected users to unnecessary security risks.

Timeliness: The DEO may have violated federal requirements to pay or resolve claims in a timely manner. The audit found that as of June 30, about 44 percent of the 408,256 documents being processed were in the "unidentified" queue. The agency didn't have procedures to ensure these unidentified documents were handled in a timely manner.

Fraud: Because of lax safeguards, 20,535 potentially ineligible claims were paid between March 1 and June 30.

Accuracy: CONNECT's automated functions repeatedly entered in wrong data, such as inaccurate postmarks on documents, that could help negate a legitimate claim. Other safeguards weren't in place to prevent the incorrect entry of data, increasing the odds of an incorrect cancellation or an overpayment.

Overpayments and erroneous charges: One claimant was wrongfully charged for an overpayment in the amount of $16,897. Another claimant whose payment was rejected in 2013 was automatically paid the old claim when he filed a new claim in 2014.

No accountability: CONNECT had few controls in place to ensure the "confidentiality, availability and integrity of its data." Furthermore, reports that the DEO must file with the federal government weren't being filed, raising concerns that the agency wasn't complying with federal requirements.

Scott has consistently avoided questions about CONNECT's performance problems since it launched in 2013. The DEO's executive director, Jesse Panuccio, at first denied there were problems that might hinder CONNECT. He later told lawmakers that the project's vendor, Deloitte Consulting, which has been paid $40 million for the project, was to blame.

The DEO has rebutted the harshest findings that it broke the law by requiring claimants to provide Social Security numbers. While it argued that the SSNs were necessary, the agency said, however, that it is considering an alternative log-in process.

The audit was made public Friday afternoon, the weekend before the Legislative session begins. But Panuccio had the audit for weeks. On Feb. 16, he sent a letter to Scott defending CONNECT, repeating his claim that things have improved.

"By the time of the release of the audit findings, CONNECT was a much improved system," Panuccio said.

Yet for thousands of jobless claimants who struggled to get payments of up to $275 weekly they needed to pay bills, the audit validates what they have encountered.

Panuccio repeatedly claimed CONNECT was operating better than it performed before its launch. In the year before CONNECT debuted, Florida paid 78 percent of its initial claims on time, according to federal guidelines. But by October 2014, that number had dropped to 27 percent.

The report further exposes CONNECT's faults, said Ali Bustamante, an economic policy analyst at Loyola University in New Orleans who reviewed the audit.

"This just shows (Scott's administration officials) had no idea how bad it was," Bustamante said. "They kept saying it was under control, but this audit clearly shows it wasn't under control."

Michael Van Sickler can be reached at (850) 224-7263. Follow @mikevansickler.