Lawmaker questions renewal of unemployment software

(The Center Square) – Despite 17 months of problems, Gov. Gretchen Whitmer’s administration renewed its contract with FAST Enterprises LLC for unemployment insurance software.

When the COVID-19 pandemic hit Michigan, millions of people lost their jobs and filed claims, spiking the unemployment rate to 22.7%. The wave of claims overwhelmed the system. But more than a year later, the problems continue.

The Unemployment Insurance Agency (UIA) leaders knew as early as Jan. 6 they erred in developing qualifications for benefits but didn’t tell the 700,000 Michiganders affected for nearly six months.

The state billed Michiganders retroactively for as much as $27,000 for benefits originally deemed eligible, while fraudulent claims are still being paid out.

House Oversight Committee Chairman Steve Johnson, R-Wayland, criticized the renewal.

“It appears that the governor doesn’t know what is going on in her own departments,” Johnson said in a statement. “The State Administrative Board’s decision today to renew the contract with the company that is being blamed for the Unemployment Insurance Agency’s myriad of issues is proof of this. There is no conceivable reason why the state should continue to pay for a product that has failed to perform when it was needed most.”

Johnson says the software has contributed to people not being paid timely for their unemployment claims and has wrongly accused people of fraud. FAST Enterprises’ problems reach back to at least 2013 when it flagged more fraudulent claims that actually existed, the Associated Press reported.

The AP reported FAST Enterprises’ $47 million computer system had an error rate as high as 93% and accused at least 20,000 Michigan residents of fraud between 2013 and 2015.

FAST Enterprises LLC hasn’t responded to a request for comment.

Caleb Buhs, communications director for the Department of Technology, Management, and Budget, said the extension was needed for a proper rebidding process.

“A contract extension for FAST Enterprises was exercised by the state today to continue operation of the unemployment system to provide service of unemployment benefits,” Buhs told The Center Square in an email. “This extension was also necessary to allow time for a proper rebidding process in the future.”

Johnson said many unemployment problems stem from FAST Enterprises, yet problems continue without public discussion of alternative software.

“There has been no public discussion of alternatives to using this system, and we continue to ask the taxpayers to foot the bill,” Johnson said. “The message is clear – Michigan’s governor is out of touch with her own departments and the unemployed workers across the state.”

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