Kansas unemployment dropped to 3.3% in December, the lowest rate since the April 2020 surge to 12.6% at outset of the COVID-19 pandemic. It remained under 4% throughout 2021. (Sherman Smith/Kansas Reflector)
TOPEKA — When Ryan Wright was tapped by Gov. Laura Kelly to take over the Kansas Department of Labor in June, coronavirus had ruthlessly gutted the state’s economy and overwhelmed the agency responsible for delivering timely financial aid to people thrown out of work.
The unprecedented wave of joblessness meant people were unable to get through to labor department call centers. The agency’s creaky computer system showed its age. A backlog of claims kept expanding. Politicians eager to highlight weaknesses in the Kelly administration had a heyday. Then, the labor department tried to claw back incorrect payments and some of those transactions overdrafted unemployed Kansans’ bank accounts. It cost labor secretary Delia Garcia her job, and ushered in the Wright era.
In an interview, Wright said the addition of full-time and temporary staff and a series of IT network patches had helped stabilize the system. He also said his office had blocked about 55,000 attempts at fraud. Just as no magical remedy for COVID-19 has emerged, neither has a silver bullet for what challenges the labor department.
“I used to hear a lot about people not getting through, not getting responses,” Wright said. “Right now, we’re hearing a lot about identity theft. I heard from a conservative legislator the other day, ‘Thank you. We can tell you’re doing stuff there.'”
For the Kansas Reflector, Wright delved into the past, present and future of department’s unemployment benefit operation.
The Kansas unemployment trust fund had $900 million at outset of the pandemic. If it goes dry, the state can borrow from the federal government. What is the fund’s status?
“It was very healthy. We’ve been, of course, drawing down on that. We expect it will go insolvent after the first of the year. As of about a month ago … we were just hitting kind of where we were at when the great recession started, that $600 million mark.”
Are identity-theft crooks concentrating on the Pandemic Unemployment Assistance program in Kansas? That’s the one offering benefits to self-employed people, independent contractors and others not eligible for regular UI aid.
“To date, we’ve stopped 55,000 fraudulent claims. It’s all targeted to the PUA program. To give you some idea of the scope, the U.S. Department of Labor’s office of inspector general estimates that this is costing taxpayers $8 billion nationally. Kansas is not out of the norm. This is absolutely hitting every state right now.”
What have you done to thwart identity theft?
“We’ve doubled the size of the fraud teams. We’ve put in place on the back end a number of digital tools — I’m intentionally being vague about that — to help verify people’s identity to stop malicious fraud activity. When you’re talking about these numbers, I’d by lying if I said some of them didn’t get through the system.”
When can you go public with scope of the PUA problem?
“We are doing an audit of our system right now. We may not know until close to the end of the year, but we’re going to know how much has been paid out in fraud. The costs of that are all borne by the federal government. It doesn’t come out of the state trust fund.”
OK, how big is the backlog of regular unemployment insurance claims?
“When I accepted this job we had around 26,000 backlogged claims within the regular UI system. Part of what I’ve been working on is to increase our bandwidth. We’ve done that in part by bringing in additional resources from Accenture and others. With their help we’ve been able to cut that number of backlogged claims down to 12,000. We expect we’re going to be able to reduce that even further, if not eliminate it, by the end of this month.”
How much new staff has been added to deal with phone bank issues?
“At the height of this, when the agency was getting 1.5 million call attempts a day, there were around 25 employees answering phones. Now, we’re at around 100 KDOL employees. We’ve got 150 Accenture folks on the phones. Last week, I think the longest anybody was on hold in our call system was 20 minutes.”
How are you doing with the Lost Wages Assistance program offering $300 per week in supplemental aid for people who received jobless benefits from Aug. 1 to Sept. 5?
“Because there are so many programs and so many acronyms floating around, it’s caused a ton of confusion. We proactively reached out to everybody who received a benefit from us in the time that fit into that critieria. We paid out right away $6.7 million to 25,000 people. We’ve had, since we opened that, 110,000 Kansans certify that they lost their jobs due to COVID.”
The labor department wants to upgrade the IT system. What’s the latest?
“The agency had actually started this process before the pandemic hit. We’re finishing up that modernization plan. We will have that ready to present to the Legislature … by the end of the year. We’re trying to be smart about this so what we’re doing now to stabilize the system hopefully will be transferable when we move to a new system.”
What about the cost estimate of $30 million or more?
“I’m thinking what will happen is that you’ll have some phased in with X amount of dollars in the first three years and X amount of dollars in the out years. We’re hoping that when the stimulus package passes Congress there will be money.”
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