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pereaedd.jpgCalifornia lawmakers blasted state officials for their oversight of a computer problem that delayed jobless benefits for nearly 150,000 Californians, while front-line employees testified Wednesday that problems persist.

"This whole situation put a big black eye on how our constituents see the state of California," Assemblywoman Lorena Gonzalez, D-San Diego, told Employment Development Department officials at an Assembly Insurance Committee oversight hearing, the first on the troubled project.

A miscalculation converting old unemployment claims into a new processing system over the Labor Day weekend resulted in a massive backlog of unemployment claims. The problem became so severe it skewed reporting of initial jobless claims by the U.S. Department of Labor, and it provided another example of the state's information-technology shortcomings.

"I think the fundamental issue for the state is we are the home of Silicon Valley, we are seen as the most technologically adept state in the nation," said Assemblyman Ken Cooley, D-Rancho Cordova. "To have this sort of thing happening is a colossal problem."

While EDD administrators said backlog claims have largely been resolved, Irene Livingston, an employment program representative for EDD in San Jose, testified that it remains "nearly impossible" for unemployed California to reach front-line employees. She said the system is overwhelmed with telephone calls and an email system that remains backlogged.

"There's literally hundreds of thousands of messages that have yet to receive a response," she said.

EDD administrators lamented staffing shortages at the department, but EDD Chief Deputy Director Sharon Hilliard told the committee that staffing levels were not responsible for the computer problem. The department greatly underestimated how many claimants would be affected by a glitch in data conversion done over the Labor Day weekend, as well as how long it would take employees to address the problem.

"For this, we are very sorry," Hilliard said.

Hilliard and a representative of Deloitte Consulting, the contractor on the project, both said the department should have done a more thorough test on the amount of time required to address "stop pay" flags associated with a portion of claims being converted.

Nicholas Lee, 33, of Sacramento, told lawmakers he lost his job as a merchandiser in September and has yet to receive help with unemployment benefits despite repeated calls and visits to a local office.

"I have two autistic kids, I have a wife, I have a house, and I am barely making it right now," he said, his voice quivering. "And this system is not working. ... I don't understand what they're doing, what's wrong, but maybe they should go back to the old system, because the old system was working."

EDD has been working for months to upgrade its 30-year-old unemployment insurance processing system, part of a multiyear, nearly $188 million system upgrade.
"The system is working, and a majority of our customers are receiving benefits without interruption," Hilliard told lawmakers.

But after Hilliard said the new system was paying a "majority of the continued claims on the same day as they are received" and that the department has resolved its major issues, Assemblyman Curt Hagman, R-Chino Hills, suggested she was minimizing the problem. Hagman, vice chairman of the insurance committee, asked her to "please refrain from using" words like "most," "majority," and "few."

"I don't think we, you know, minimize that," Hagman said. "We have to say that is really impacting these people when they need the money the most."

Representatives of the National Employment Law Project and California Rural Legal Assistance both urged the creation of an independent panel to oversee the state's unemployment benefits program, while members of Service Employees International Union Local 1000 said management dismissed employees' concerns about the project.

"This has been an enormous tragedy, and it could have been prevented," the union's Margarita Maldonado said.

Gonzalez challenged the claim by EDD administrators that they only discovered the severity of the problem the second week after Labor Day. Employees in elevators were talking about problems earlier than that, she said.

"I think the frustration that we got from our constituents were just the lack of answers," Gonzalez said. "It wasn't until we got an onslaught of calls that we started getting explanations."

Photo: Assemblyman Henry Perea, D-Fresno, chairman of the Assembly Insurance Committee, speaks with reporters after a committee hearing at the Capitol on Nov. 6, 2013. The Sacramento Bee/David Siders



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