Liberal state government fail

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A state contract for a computer system to process unemployment claims provided few protections for taxpayers and little oversight of consultants, resulting in a system that arrived years late, millions of dollars over budget, and riddled with problems.

When the new system went online July 1, two years behind schedule, it erroneously cut hundreds of jobless workers from their benefits, and required thousands of overtime hours by state employees to handle complaints about glitches.

A number of factors in the contract benefited Deloitte, officials acknowledged, especially the lack of financial repercussions if Deloitte failed to finish on time and on budget. The system upgrade, for example, was originally scheduled to be completed by July 5, 2011, but wasn’t ready by then.

So Deloitte negotiated a new deadline, March 2012, and an additional payment of $4 million to keep its 80 programmers working on the project. Deloitte missed the second deadline, too.

In an interview last week, Joanne F. Goldstein, secretary of the state Executive Office of Labor and Workforce Development, acknowledged that the project went so far off track the state considered firing Deloitte. Instead, she negotiated a contract amendment. “We decided our best option was to keep Deloitte on the project,’’ Goldstein said.

The contract was awarded after Governor Deval Patrick entered office in 2007.

State Auditor Suzanne Bump, then the state secretary of labor, signed the contract and secured $40 million in funding for the work — a feat she touts on her campaign website.

Bump, who as auditor acts as a watchdog for taxpayers, said she recalls little about the contract beyond landing the money to pay for it.

Responding to inquiries, she first distanced herself from the project, saying the state’s information technology department negotiated and managed the contract.

But last week, Bump corrected herself, acknowledging in an interview that she was responsible for the contract.

Bump left the Labor Department in December 2009 to run for auditor, just as the first phase of the system upgrade was launched to allow employers to file and pay unemployment taxes that finance benefits online. That rollout also ran into trouble, leaving many employers initially unable to access the system.

The new system has detected $6.6 million in overpayments incurred by claimants dating back to 2005, although the state, by law, can’t recover overpayments.