Image provided by: University of Oregon Libraries; Eugene, OR
About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (Aug. 11, 2020)
A3 THE ASTORIAN • TUESDAY, AUGUST 11, 2020 ‘No urgency and no leadership’ Leaders squandered computer upgrades at Employment Department By MIKE ROGOWAY and HILLARY BORRUD The Oregonian The meltdown at Ore- gon’s Employment Depart- ment that left tens of thou- sands of jobless Oregonians stranded for weeks or even months during the pandemic was, at its heart, a failure by state leaders and a dysfunc- tional agency to correct a computer problem they knew of for a decade, an analysis by The Oregonian shows. They had federal fund- ing and the time to fi x their antiquated system but failed to heed repeated warnings to act. The consequences for many Oregonians have been wrenching. Megan Wilber-Fuchs has been out of work since April, when her old employer laid her off and a new job she had lined up evaporated as busi- nesses pared back in the early days of the pandemic. The 38-year-old account manager promptly fi led for jobless benefi ts and found herself in the same predica- ment as tens of thousands of newly out-of-work Orego- nians. Wilber-Fuchs’ checks didn’t show up, the employ- ment department’s phone lines were jammed so she couldn’t fi nd out why, and her savings were running out. The n ortheast Portland res- ident and her husband, who have a toddler and are expect- ing another child in Novem- ber, had to ask for extra time to pay their rent and are other- wise struggling to get by. The fundamental cause was the department’s decade- long failure to upgrade its obsolete computer system, built on technology from the 1990s. Agency leaders and top state offi cials have known since at least 2012 that the computers were in desper- ate need of replacement, and since 2009 has been sitting on more than $80 million in fed- eral money to pay for one. State auditors warned for years that the comput- ers were a disaster waiting to happen — rigid and infl ex- ible, the system was ill-pre- pared to handle an uptick in claims let alone the deluge that came with the corona- virus pandemic. In 2013, the agency’s director told law- makers Oregon was just one of just two states that had not even started the planning pro- cess to replace their “legacy” systems. Yet Oregon squandered years of opportunities to make a fi x as the agency struggled with dysfunction, infi ghting and a lack of urgency from top state leaders. After gover- nors replaced the department director in 2013 and again in 2016, the agency still pro- ceeded at a glacial pace — setting an eight-year timeta- ble to upgrade the computers starting in 2017. But even that may prove too ambitious. Internal department doc- uments and a new report by legislative fi scal analysts show the modernization proj- ect veered dangerously off track in the months before the pandemic. With the depart- ment now overwhelmed, its ability to carry off the com- puter upgrade is in doubt. The computer system fail- ures expose a decade of inef- fective leadership under three successive governors. The employment department’s last three directors all were fi red or forced from their jobs after major setbacks at the agency. The lapses suggest a ten- dency for one of the state’s largest and most important safety net programs to fall off Oregon leaders’ radar — until it’s too late. It also illustrates how diffi cult it is for Oregon agencies to adopt new tech- nologies, even when the con- sequences of not acting will be severe. In Oregon’s Silicon For- est, “We have these tech megastars and yet our gov- ernment system is using anti- quated software or infrastruc- ture from the ’90s? That’s the part that really makes Oregon received federal funding to replace its jobless benefi ts computer system in 2009, near the end of Gov. Ted Kulongoski’s tenure. Gov. John Kitzhaber, center, fi rst proposed launching the overhaul in 2014. The project fi nally began after Gov. Kate Brown, right, took offi ce. Dave Killen/The Oregonian State Sen. Betsy Johnson, D-Scappoose, spent years on budget committees overseeing the Employment Department’s budget. me very frustrated,” Wil- ber-Fuchs said. Uniquely bad Oregon leaders and law- makers have the agency’s failures top-of-mind now that they are feeling the heat. Thousands of Oregonians in dire circumstances have called lawmakers to com- plain and ask for help sorting out their claims. “We have had everything from people needing liver transplants, to they need a new transmission to the vehi- cle, they’re bankrupt and had their cars repossessed because they can’t make payments, and on and on and on,” said state Rep. Brad Witt, a Dem- ocrat from Clatskanie. “It is unbelievable.” Witt, who served on a budget committee overseeing the employment department from 2009 to 2012, is lining up bipartisan support to ask Secretary of State Bev Clarno to launch an audit. middle of March. Even now, with the pandemic well into its fi fth month, the number frequently tops 8,000 a week — nearly twice the average before the pandemic. Nearly every state has a large backlog of claims. Ore- gon’s problems, though, are among the very worst. That’s because its com- puter systems are woefully outdated, built on technol- ogy from 1993 using the antiquated programming language COBOL. Some components date to the Rea- gan administration. That left Oregon struggling in the midst of a pandemic to adapt its system to major changes in the unemployment claims process, including the huge expansion of benefi ts Congress approved in March to pay self-employed people who are out of work. Even ordinary claims pres- ent a big challenge because the system routinely issues erroneous rejections. AGENCY LEADERS AND TOP STATE OFFICIALS HAVE KNOWN SINCE AT LEAST 2012 THAT THE COMPUTERS WERE IN DESPERATE NEED OF REPLACEMENT, AND SINCE 2009 HAS BEEN SITTING ON MORE THAN $80 MILLION IN FEDERAL MONEY TO PAY FOR ONE. Oregon’s failures were entirely predictable. In fact, the state said so repeat- edly, with audits in 2012 and 2015 warning the employ- ment department’s obso- lete system could not handle a surge of claims, nor make the quick adjustments neces- sary to implement new fed- eral programs. Both prob- lems became clear during the Great Recession. Oregon, like nearly every other state, was utterly over- whelmed by the fl ood of job- less claims that poured in during March as the pan- demic set in. Gov. Kate Brown shut down much of the economy to contain the outbreak and new jobless claims soared from just a few thousand a week to as many as 89,000. The state has fi elded more than 600,000 claims since the In times of low unemploy- ment, it’s relatively simple for the department to manu- ally override those mistakes. During the pandemic, though, the whole process went off the rails. Computers can rapidly scale up to handle additional tasks, but people cannot. So Oregon quickly fell weeks, then months behind — leav- ing tens of thousands of the newly jobless without income while they waited. Other states are stumbling technologically, too. But Ore- gon’s crisis may be unique in one key way. In March, Congress allo- cated money for states to waive the usual one-week delay before newly unem- ployed workers are eligible for benefi ts. Most states moved quickly to make the change. Four months later, though, Grace Episcopal Church Worship: In Person or Online Sunday 8:00 am & 10:00 am - In Person Sunday 10:00 am - Online Wednesday 7:00 pm - Facebook live Food Pantry: Tues & Thurs - 9:00am to 11:30am Oregon still hasn’t. As sim- ple as the change sounds, the state’s computers can’t handle it. As a result, Oregon can’t deliver several hundred mil- lion dollars in federal funds to the state’s unemployed workers. The state estimates fi xing the blockade would require 4,000 hours of computer pro- gramming — and perhaps a great deal more. It’s a task so huge that Oregon postponed even trying to pull it off until August, waiting until it had regular jobless claims under control. If the state can’t qualify its unemployed workers for immediate benefi ts by the end of the year it risks forfeiting the federal money altogether. It’s not clear how much that is, but it could easily top $300 million. Oregon says it’s not aware of any other state that has failed to get that fi rst-week money for its workers. ‘No urgency and no leadership’ As The Oregonian doc- umented in 2013, 2016 and again in April, the employ- ment department was beset for years by infi ghting, accu- sations of nepotism, internal dysfunction and what one state report characterized as “bully- ing” behavior by employees. The department also suf- fered a succession of techno- logical failures, including a 2014 hack that exposed the personal information of more than 850,000 Oregonians. Legislative documents and hearings reviewed by The Oregonian show that leaders in the department — which reports directly to the gover- nor — did not tell lawmak- ers Oregon needed to replace its core technology until 2013. The agency originally planned to use the more than $80 million in federal money instead to pay unemployment benefi ts. “We are the only two states right now that are running legacy systems and haven’t developed a plan for this mod- ernization,” then-director Lau- rie Warner told lawmakers in April 2013. Still, despite what Warner described as a drive by the U.S. Department of Labor for states to adopt new sys- tems to cut down on errors and reduce administration costs, she didn’t ask lawmakers for approval to start down that road. Instead, then-Gov. John Kitzhaber’s budget proposal called for smaller information technology projects, including a program to help job seekers fi nd work. The computer moderniza- tion project began in earnest in 2017, according to state records, with the department ultimately targeting 2025 to have it complete. Recent reports, though, show that even with the federal funds in hand, it isn’t going well. The state still hasn’t picked a new software vendor and four key personnel left in recent months, including a project manager and the mod- ernization program director, who quit in July. “It is an unprecedented time for the agency, with incredible attention being brought to bear on every divi- sion,” modernization direc- tor Ethan Benatan wrote in an email to his team notify- ing them of his exit. “Mod- ernization is second only to (unemployment insurance) in the amount of scrutiny we are under. New leadership will provide an opportunity to reset and restart in a way that noth- ing else can do.” A February project update attributed earlier turnover with the project to “burnout or stressful conditions.” That report found several other problems with choos- ing a vendor and managing the project’s budget. It shifted the project’s health rating from yellow to red, indicat- ing “Unacceptable variances or issues or ‘high’ rated risks that are not being appropri- ately managed.” A subsequent July report from the Legislative Fiscal Offi ce documented a litany of department failures over the past decade and concluded the computer upgrade remains in woeful shape. “The Employment Depart- ment has not yet had the nec- essary combination of organi- zational stability and sustained professional and technical capacity needed to ensure project success,” that report concluded. None of that was evident in a rosy update the agency’s then-Director Kay Erickson delivered to the Legislature in January, in which she claimed the project was progressing “within expected parameters.” Preparing the system for the next economic bust never seemed to be a priority for Oregon’s governors and law- makers, as they focused on high-profi le initiatives such as green energy, expanding Med- icaid and passing a new busi- ness tax to boost public educa- tion spending. Sen. Betsy Johnson, D-Scappoose, sits on the pow- erful Ways and Means com- mittee and another commit- tee that oversees information technology in state agencies. Johnson also served on the transportation and economic development budget subcom- mittee overseeing the employ- ment department from 2009 through 2019. Like other lawmakers, she has been inundated by calls from constituents who have waited months for benefi ts. She said the department’s fail- ures stem from a lack of direc- tion and accountability. “For me, all trails lead to the same place: no urgency and no leadership,” Johnson said. State Treasurer Tobias Read, who as a state represen- tative served on the transpor- tation and economic develop- ment budget subcommittee from 2013 to 2015, said law- makers were reluctant to authorize big-ticket projects due to their distrust of leaders at the troubled agency. “Ultimately, I think it’s management’s troubles at the employment department that really got in the way of secur- ing the trust that was neces- sary to make those upgrades,” Read said . “Oregonians are all paying the price for that now.” Read said one of his take- aways is that Oregon needs to prioritize important infra- structure replacement proj- ects, even when the systems’ problems aren’t getting public attention. WANTED Alder and Maple Saw Logs & Standing Timber Northwest Hardwoods • Longview, WA Contact: John Anderson • 360-269-2500 Hats Off to You, Jack Jack helped more than 80 local business owners navigate the Small Business Administration’s Paycheck Protection Program, securing nearly $15 million in lending. All Covid restrictions followed: Face masks required • Social Distance kept Find us: 1545 Franklin 503-325-4691 • www.graceastoria.org • Facebook Office Hours: Tues - Fri - 9:00am to 11:00am Fre e Est Fast ima tes Call me ti Any Jeff Hale Painting • • • • You truly are a Partner for Business! Jack Ficken VP/Relationship Manager, Commerical Loan Officer (503) 298-2330 jficken@lewisandclarkbank. com Residential Commercial Cedar Roof Treatments Exterior Repaint Specialist Over 25 years local experience 503-440-2169 Jeff Hale, Contractor LICENSED BONDED INSURED CCB#179131 Lewis & Clark Bank Astoria | 988 Commercial Street
