Unemployment Insurance Information Technology: States Face Challenges in Modernization Efforts Page: 2 of 12
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Highlights of GAO-13-859T, a testimony
before the Subcommittee on Human
Resources, Committee on Ways and Means,
House of Representatives
Why GAO Did This Study
The joint federal-state unemployment
insurance program is the Department
of Labor's largest income maintenance
program, and its benefits provide a
critical source of income for millions of
unemployed Americans. The program
is overseen by Labor and administered
by the states. To administer their UI
programs, states rely heavily on IT
systems-both to collect and process
revenue from taxes and to determine
eligibility and administer benefits.
However, many of these systems are
aging and were developed using
outdated computer programming
languages, making them costly and
difficult to support and incapable of
efficiently handling increasing
workloads. Given the importance of IT
to state agencies' ability to process
and administer benefits, GAO was
asked to provide testimony
summarizing aspects of its September
2012 report on UI modernization,
including key challenges states have
encountered in modernizing their tax
and benefit systems. To develop this
statement, GAO relied on its previously
What GAO Recommends
In its prior report on states' UI system
modernization efforts, GAO
recommended that the Department of
Labor conduct an assessment of
lessons learned and distribute the
analysis to states through an
information-sharing platform such as a
website. Labor agreed with the first
recommendation; it neither agreed nor
disagreed with the second
recommendation, but stated that it was
committed to sharing lessons learned.
View GAO-13-859T. For more information,
contact Valerie C. Melvin at (202) 512-6304 or
UNEMPLOYMENT INSURANCE INFORMATION
States Face Challenges in Modernization Efforts
What GAO Found
As GAO reported in September 2012, nine selected states had made varying
degrees of progress in modernizing the information technology (IT) systems
supporting their unemployment insurance (UI) programs. Specifically, the states'
modernization efforts were at various stages-three were in early phases of
defining business needs and requirements, two were in the process of building
systems based on identified requirements, two were in a "mixed" phase of having
a system that was partly operational and partly in development, and two had
systems that were completely operational. The enhancements provided by these
systems included supporting web-based technologies with more modern
databases and replacing outdated programming languages, among others.
Nevertheless, while taking steps to modernize their systems, the selected states
reported encountering a number of challenges, including the following:
* Limited funding and the increasing cost of UI systems. The recent
economic downturn resulted in smaller state budgets, limiting what could be
spent on UI system modernization. In addition, competing demands and
fluctuating budgets made planning for system development, which can take
several years, more difficult.
* A lack of sufficient expertise among staff. Selected states reported that
they had insufficient staff with expertise in UI program rules and
requirements, the ability to maintain IT systems developed by vendors, and
knowledge of current programming languages needed to maintain
* A need to continue to operate legacy systems while simultaneously
implementing new systems. This required states to balance scarce
resources between these two efforts.
In addition, a separate set of challenges arose for states participating in
multistate consortiums, which were established to pool resources for developing
joint systems that could be used by all member states:
* Differences in state laws and business processes impacted the effort to
design and develop a common system.
* States within a consortium differed on the best approach for developing and
modernizing systems and found it difficult to reach consensus.
* Decision making by consortium leadership raised concerns about liability for
outcomes that could negatively affect member states.
* Consortiums found it difficult to obtain a qualified leader for a multistate effort
who was unbiased and independent.
Both consortium and individual state officials had taken steps intended to
mitigate challenges. GAO also noted that a comprehensive assessment of
lessons learned could further assist states' efforts. In addition, the states in
GAO's review had established certain IT management controls that can help
successfully guide modernization efforts. These controls include establishing a
project management office, using industry-standard project management
guidance, and employing IT investment management standards, among others.
United States Government Accountability Office
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United States. Government Accountability Office. Unemployment Insurance Information Technology: States Face Challenges in Modernization Efforts, text, September 11, 2013; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc299732/m1/2/: accessed November 13, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.