Kentucky picks Deloitte for new unemployment system

Kentucky is spending $55.5 million on a new unemployment insurance system to replace a decades-old system that proved unstable during the COVID-19 pandemic.
Andy Beshear
Kentucky Gov. Andy Beshear (Flickr / University of Kentucky)

Kentucky’s Education and Labor Cabinet on Friday awarded a contract to Deloitte Consulting to implement an unemployment insurance system to replace one that’s about 40 years old, the Associated Press reported. 

The new system replaces an unemployment insurance system that was scrutinized due to “external pressure” during the COVID-19 pandemic, resulting in employees overriding system controls and paying claimants erroneously, according to a 2021 state audit.

“This new system will help us better meet the needs of Kentuckians by improving accessibility and claims processing times, as well as safeguarding against potential unemployment insurance fraud,” Gov. Andy Beshear told the AP. 

The Education and Labor Cabinet awarded a six-year contract to create the replacement system for $55.5 million. The cost of the new system’s operations and maintenance expenses will be supported by $85 million in funding approved by lawmakers, the AP reported. Officials anticipated the new system will be completed by 2028. 


Kentucky, like other states, was overwhelmed by record numbers of unemployment insurance claims following business shutdowns during the public health crisis. In April 2021, Kentucky State Auditor Mike Harmon, a Republican who last year fell out of the gubernatorial race during the primary, reported that human-led errors caused some claimants to receive too much or too little assistance. Harmon’s audit found that the state’s unemployment office had more than 400,000 unread emails between March 19 and April 19 of 2020.

A second state audit in 2021 found that at least 10 unemployment office staff improperly filed for benefits and accessed their own unemployment accounts using their state credentials.

Harmon’s office published another report in 2022 on the shortcomings of the state’s unemployment insurance system that highlighted nine examples of how the unemployment office had failed to implement measures that might have prevented millions of dollars in fraudulent payments.

Skylar Rispens

Written by Skylar Rispens

Skylar Rispens is a reporter for StateScoop and EdScoop. She previously worked as a reporter specializing in education coverage for daily and weekly newspapers across Montana, where she currently resides.

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