Auditor General rips Pa. Labor and Industry over failing unemployment compensation centers

HARRISBURG, Pa. -- Pennsylvania Auditor General Eugene DePasquale had a simple message for the Department of Labor and Industry on Tuesday: You should be embarrassed.

DePasquale said the department failed to follow how $178.5 million dollars was spent over a four year period from 2013 to 2016. In doing so, a computer program, which was supposed to see significant upgrades, remained outdated and vulnerable to hacking.

"The technological issues with the commonwealth should be embarrassing to everybody," DePasquale said. "How in today's day in age, with all the advancement in technology, is the system so bad with the money that's spent, that you don't even have a backup to all the names in the system?"

One glitch, DePasquale said, could have resulted in someone's entire personal history getting wiped from the system, preventing them from receiving unemployment checks.

The current computer system goes back to the Governor Rendell administration, in 2006. However, promises to upgrade the system, which is a program with computer language dating back to the late 1950's, never occurred. Ultimately, blame lied with the upper management in the Department of Labor and Industry in both Governor Corbett and Governor Wolf administrations, DePasquale said.

"To say its being held together with bubble gum would be an insult to bubble gum," DePasquale said of the computer system.

At the heart of the issues at the Department of Labor and Industry is a funding fight between Governor Wolf and Senate Republicans. Nearly 500 workers were furloughed in December when the Republican-controlled Senate did not vote on a bill which would have funded Labor and Industry $57.5 million. Three call centers were also closed.

DePasquale said in January, more than 312,000 calls were made into the unemployment centers, with people getting a busy signal 99.3 percent of the time.

The audit, which was released Tuesday, determined in order to properly fund the Department of Labor and Industry moving forward, it would need $159.5 million from 2017 to 2020. That projected cost includes $95.7 million towards maintaining the current costs at five unemployment compensation centers, and $63.8 million to properly update the computer system.

DePasquale's projection does not include the $38.5 million he estimates it will cost to reopen the three centers closed in December.

On Monday, Governor Wolf signed a $15 million stopgap bill designed to recall 200 of the 488 furloughed workers. One day later, numerous state employees and members of the General Assembly watched the results of DePasquale's audit.

"You can't continue to have those kind of cuts for a half dozen years and expect everything to go on as if there isn't a problem," said Tom Herman, President of SEIU668, the union which represents many of the laid off workers.

Herman, and many of his furloughed employees, blame York County fiscal conservative Senator Scott Wagner for leading the charge to not fund the Department of Labor and Industry in December.

"If that had been done, that money would be gone, there wouldn't be an audit, no squawking," Wagner said. "We did the right thing."

Wagner, the owner of Penn Waste in York County, insists he could hire a private company to come into the Department of Labor and Industry and fix all of its issues for $50 million.

"People think we're going to throw another $170 million at this problem and it'll go away. It's not going away," Wagner insisted.

The idea of privatizing is one Herman, and other union members, say they will fight.

"We're not going to standby and watch as the state legislature removes themselves from being held accountable by Pennsylvania citizens," Herman said. "The system works fine if it's fully staffed and fully functional and supervised by state employees. To do it with private contractors is a joke."

DePasquale says the amount wasted money over the last four years by Labor and Industry reached "high levels of incompetence." He plans on sending his audit to the Attorney General's office so they can investigate, if they choose, if any money wasted by the department over the last four years was done so illegally.