The Pennsylvania Department of Labor and Industry, when it made the decision to close three unemployment compensation call centers and furlough about 500 workers in December, had $15 million that it chose not to spend to keep those centers running, an agency official told state lawmakers in Harrisburg on Monday.
The disclosure, which came during testimony by Robert O’Brien, acting deputy secretary for the unemployment compensation program, is likely to stoke an already fierce partisan debate over the need for more funding to shore up the state’s ailing program.
Some Republican lawmakers have said for months they did not believe the agency needed to shut down the centers at the end of last year, suggesting it was a political punishment by the Wolf administration for their decision not to approve a $58 million funding request for the calendar year 2017.
“Those are the kind of maneuvers that will not do you well with this committee,” said Rep. Rob Kauffman, R-Franklin, chairman of the House Labor and Industry Committee, which called Monday’s hearing to discuss a recent audit of the unemployment compensation program.
“I will say that the continued parroting of the $58 million figure ... if you bring that number to this committee, I’m going to assume you’re not serious about having a conversation,” Mr. Kauffman said.
Mr. O’Brien’s testimony came after Pennsylvania Auditor General Eugene DePasquale had urged both sides to come together to fix the current funding shortfall and to create a sustainable long-term future.
Mr. DePasquale’s audit, released in April, found accounting missteps by the department in managing a pot of money approved by the legislature in 2013.
The department did not properly detail how it spent the money, which was moved from employee contributions to the unemployment compensation system and was supposed to be used to improve the administration of services for people filing claims. The mistakes spanned the administrations of both Republican Tom Corbett and Democrat Tom Wolf, Mr. DePasquale noted.
Thus, it was impossible for his office to say precisely much more the department needs going forward, he told the committee.
But fixes are needed soon, Mr. DePasquale stressed. The ancient computer software system on which unemployment benefits are approved and delivered, he said, could fail at any time and wipe out money owed to the state’s most vulnerable people. He estimated a “moderately idealistic” goal for a political solution would be by the end of the year.
“If nothing is done and the system isn’t fixed, you’re playing Russian roulette with the lives of the people in that system,” Mr. DePasquale said. “There’s some need for some money, and there’s some need for additional accountability. I don’t know how you get through this without both.”
Mr. O’Brien was answering questions from the committee about a possible upcoming contract to modernize the agency’s beleaguered computer system when he brought up $15 million that the legislature allotted for benefits modernization in 2017.
Mr. O’Brien took the reins of the unemployment compensation program in February when his predecessor, Kevin Cicak, resigned after errors were discovered in the program as part of Mr. DePasquale’s audit.
Because the department has not done any work on modernizing benefits — the contract has not been finalized — Mr. O’Brien said he decided in April to authorize using that $15 million in funding to bring back more than 200 people.
That money comes on top of $15 million the state approved in April as a short-term solution to keep call center lines open to handle a backlog of claims.
Rep. Ryan MacKenzie, R-Berks, who throughout the hearing challenged the notion that there was no other money available to keep call centers open, seized on that information.
“So that $15 million that was getting withheld for modernization purposes would have been available at the end of last year to continue the operations of the call centers,” Mr. MacKenzie said angrily.
Mr. O’Brien acknowledged that was correct but argued it was “the prudent financial thing to do to furlough our folks” because “we would have run out of money by the end of April.”
Officials with Labor and Industry were not immediate available to comment on Monday.
Several members of the committee expressed frustration that they were still waiting for specific numbers to back up the department’s funding request last year of $58 million annually.
“We made that very clear that we don’t want this thing going forward until we have some serious numbers,” said Rep. Cris Dush, R-Jefferson.
“This is still being played as a shell game,” Mr. Dush added. “The fact that we don’t know how much this is going to cost but we will be stuck with the bill — that’s an abomination.”
Mr. O’Brien said the agency had agreed to all of Mr. DePasquale’s recommendations and made progress on some of them. The finances for the unemployment program are now tracked separately, he said, making an audit of the expenditures possible.
The contract for a vendor to upgrade the computer system will come soon, he said. Currently, Florida-based Geographic Solutions Inc. is being reviewed for a five-year, $23 million contract to upgrade the computer systems that handle unemployment claims.
Mr. O’Brien declined to comment further when pressed by Mr. Dush on the details of the contract, when it would be final and whether any other companies were competing for it.
Daniel Moore: dmoore@post-gazette.com, 412-263-2743 and Twitter @PGdanielmoore.
First Published: June 5, 2017, 7:59 p.m.