The federal government’s decision to rescind $29 million for the state’s unemployment program has been a “setback” for DWD in its effort to complete a modernization of the system, the Evers administration says.
In a letter to the co-chairs of the Joint Finance Committee, the secretaries of Administration and Workforce Development wrote the state was forced to halt several projects after the funds were rescinded in May.
That includes:
- $11.25 million to modernize the current employer portal.
- $6.8 million for “UI Equity” to “facilitate effective written communication with all UI customers through an agile and efficient systems interface.”
- $6.3 million to improve fraud detection and prevention.
- $4.5 million to bolster identity authentication and proofing tools.
“Indisputably, U.S. DOL’s termination of the modernization funds set DWD back in terms of completing its modernization projects,” DOA Secretary Kathy Blumenfeld and DWD Secretary Amy Pechacek wrote in Thursday’s letter.
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The Evers administration has been working to modernize the state’s unemployment system since a deluge of claims during the COVID-19 pandemic overwhelmed it and led to lengthy delays for those applying for benefits. Since then, the guv has allocated $80 million in COVID-19 funds to modernize the system.
According to the letter, $46 million of that money has been expended with another $2.8 million committed.
The Trump administration in May rescinded $675 million in COVID-19 funds that had been allocated to states to modernize their unemployment systems. The secretaries wrote they asked the U.S. Department of Labor to reconsider terminating the grants and asked the Joint Finance Committee for one-time funds to make up the loss. But both requests were denied.
The offices of the co-chairs didn’t immediately respond to a request for comment this afternoon. DWD declined comment beyond the letter, which is part of a quarterly update to the committee on the progress in modernizing the system.
Blumenfeld and Pechaceck wrote the $80 million in COVID-19 funds dedicated to the effort weren’t impacted by the Trump administration decision. But that money is insufficient to “support the full modernization work and integration of its IT systems in a cloud-based environment.” The migration to a cloud-based system won’t happen until DWD has sufficient resources to make the move.