When officials at the state Employment Development Department (EDD) received an e-mail from an employee warning that the new computer system for processing unemployment checks was not usable, one of them responded, “Who is this guy?”

The guy is Adolfo Jimenez, and according to internal EDD correspondence obtained by the Sacramento Bee, the Buena Park service center employee was blasting off dire warnings about the $188-million system's flaws as it rolled out on Labor Day, headed toward a meltdown that would cost 300,000 Californians their unemployment checks for an extended period.

Officials were celebrating a major upgrade of their 30-year-old system that processes unemployment claims even as Jimenez was sending his first message to EDD Deputy Director Sabrina Reed. “Don’t pat yourself on the back don’t congradulate (sic) yourself nor others,” he wrote her. He described to her the problems employees were having opening new claims and helping those claimants with problems. He told her “everyone was having problems” and that he had alerted Governor Jerry Brown to the problems.

Reed forwarded the e-mail to her boss, division chief Maria “Who is this guy?” Rutherford, and the next day Jimenez was “counseled regarding the nature of the email and the proper chain of command.”

Meanwhile, the problems being reported internally for the first few days began to gain public notice. Within a week the state was acknowledging a few kinks and a manageable backlog of claims that needed processing. But predictions of a timely resolution quickly faded as the extent of the computer problems became apparent. Instead of shrinking, the backlog grew.

Three weeks after launch, Labor and Workforce Development Agency Secretary Marty Morgenstern ordered that checks be sent out without verification of a claimant's status to mitigate personal disasters across the state. EDD was claiming the backlog was gone by October 3, but the Los Angeles Times reported that claimants were still without money.

By the usual standards of California technology failures, this one was of a shorter duration with fewer costs and consequences. But it’s still not known what went wrong or why, and how much jerry-rigging is holding the system together.

New York-based Deloitte Consulting, one of the nation’s largest IT contractors, will have a chance to explain some of that to an Assembly committee that will be holding a hearing in November or December about the snafu. Members of the committee have probably heard of Deloitte.

It was the lead contractor in the abandoned $1.7 billion California Court Case Management System that the state wasted half a billion dollars on before cutting bait in March 2012. That system was going to replace 70 different systems already in place—many of which cannot talk to each—and create a unified operation for all 58 Superior Courts.

Marin County sued Deloitte in 2011 over what it claimed was a “scheme to defraud the county while reaping tens of millions of dollars in ill-gotten gains.” Marin said it lost $41 million over installation of payroll software being installed by Deloitte and SAP AG.  

–Ken Broder

To Learn More:

California Officials Knew about Glitch before Computer Upgrade that Delayed Jobless Benefits (by David Siders, Sacramento Bee)

State to Hold Hearing on EDD Unemployment Benefits Backlog (by Ricardo Lopez and Marc Lifsher, Los Angeles Times)

Consultant for Court IT System Is Facing Lawsuits in California over Sofware Systems (by Bill Girdner, Carole Sage and David Tartre, Courthouse News Service)

State Unemployment Up; Unemployment–Check Computer System Down (by Ken Broder, AllGov California)