Editor’s note: Due to a reporter’s error, a previous version of this story said that Governor Laura Kelly in 2019 canceled a no-bid contract with CGI, an IT company based in Canada, which would have upgraded the antiquated Kansas Unemployment computer systems. In fact, the contract was only to upgrade Kansas Department of Revenue systems, and did not include the Kansas Department of Labor.  The Sentinel regrets the error.

Even members of Kansas Governor Laura Kelly’s own party are starting to question her handling of the state’s unemployment system.

Tens of thousands of Kansans are still struggling to get the benefits to which they are entitled, even as Kansas ranks second in the nation in fraudulent claims — thanks in part to an antiquated computer system Kelly isn’t planning to let bids on until July.

Rep. Sharice Davids, the only Democrat in the state congressional delegation, sent a letter late last week demanding action by Kelly.

“It has been nearly a year since this pandemic began and much more needs to be done to get Kansans the unemployment assistance they need right now. We need immediate action to address the problems plaguing KDOL and to get relief into the pockets of Kansans,” the Kansas City Star reports Davids wrote. “Many have been unable to file their weekly claims or even speak with a KDOL representative on the phone.

“To make matters worse, numerous cases of fraudulent claims have been filed under the names of innocent Kansans — taking away vital resources from our already overburdened unemployment system.”

Indeed, as much as half of all Kansas UI claims have been fraudulent, the Sentinel reported earlier this year. And an audit found that the state had paid out nearly $600 million in fraudulent claims.

Moreover, Kelly has been deflecting blame for the failures of the system, despite being warned a year ago that massive fraud was imminent.

At a news conference late last month, Kelly blamed the federal government and the legislature for the issues.

“That’s what we’re up against: A once-in-a-century crisis, curveballs from our federal partners instead of coordination and help, stone-age computer technology,” Kelly said in a press conference late last month.

Kelly also blamed Republicans for not upgrading the state’s 44-year-old computer system, disregarding the fact that Democrat governors Kathleen Sebelius, Mark Parkinson, Joan Finney, and others would be equally to blame.

 Republican leaders blasted Kelly’s remarks.

“No amount of blame-shifting can change the fact that Governor Kelly is ultimately the one responsible for fraud occurring under her watch,” Kansas House Majority Leader Dan Hawkins said through a spokesperson. “Governor Kelly was entrusted with taxpayer money to help those truly in need, and she broke that trust.

“The Governor has missed no opportunity in sharing estimates of the amount of fraud her administration has stopped since instituting new security measures in recent days, but she has been far less forthright in providing the legislature and public with even the roughest estimate on how much fraud occurred before her administration finally took action. The secrets must stop. Kansans are on the hook for potentially hundreds of millions of dollars in fraudulent unemployment claims and they deserve to know what that number is. The Governor’s refusal to share such basic information shows a concerning lack of transparency that must come to an end.”

Kansas Senate President Ty Masterson concurred.

“The buck clearly does not stop with the governor, who is now engaged in a political blame game rather than taking responsibility for her administration’s failings,” he said, in a statement emailed to the Sentinel. “She has been in office for over two years and has had multiple opportunities to address the issues with the IT system, and did not do so. For the longest time, they did not even acknowledge there was a problem at the Department of Labor, despite clear warnings along the way.  Now her long-term proposals to fix it won’t even take effect until the end of 2021. 

“Meanwhile, Kansas families are struggling and have not gotten the help they need. A legislative audit indicates she was off by over $300 million in her estimates of how many fraudulent claims were paid out in 2020 and her own administration admits a backlog of 12,000 real claims remains.”

Brownback no-bid contracts are bad, but Kelly’s are OK

A Sentinel Open Records investigation showed Governor Laura Kelly’s administration paid Accenture $48 per hour to provide call center staff between early July and the end of November of last year.  Accenture was also paid about $3.9 million for operational management fees, training fees, and the virtual assistant chat on top of $7.4 million for the call center staff.

But that’s not all.  

The Kelly administration also paid Accenture about $10 million in consulting fees for more than a dozen projects, including pandemic unemployment assistance (PUA) system and technology upgrades, fraud support, outbound correspondence, IT documentation, and IT skills and resource assessment.

All together, Accenture was paid almost $22 million over those five months, and yet a massive backlog continues to persist.

By the way, the deal Kelly’s administration struck with Accenture is a no-bid contract.  How’s that for irony?  She cancels a Brownback no-bid deal to fix the system and then makes one of her own — with full cover for her hypocrisy from mainstream media.

Moreover, KDOL insists it doesn’t have data showing how many claims were fraudulent.

In late November, the Sentinel sent a Kansas Open Records Request asking for:

  • Total number of unemployment claims for the dates July 1, 2020, through Nov. 19, 2020. 
  • Total number of attempted fraudulent claims for the same dates.
  • Total number of fraudulent claims paid out for the same dates.
  • Total dollar figure of fraudulent unemployment claims paid out.
  • Any documentation detailing how residents whose identity was compromised as part of a fraudulent claim were notified.

After nearly two weeks of back and forth, the Sentinel was told there were no records responsive to that request.

Meanwhile, the fraudulent claims have continued to mount, and apparently, KDOL has no idea how bad the problem might be, nor any way to tell Kansans if they’ve had their identity stolen for unemployment fraud — even after an “accidental hack” revealed a massive security hole in the system.

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