Some ethnic groups waited longer for unemployment assistance in Oregon, audit says

Clunky business processes, antiquated computer systems and staffing shortages led some Oregon residents to wait more than a year before their unemployment insurance claims were resolved during the COVID-19 pandemic, according to an audit published Wednesday.

The report from Oregon Secretary of State Shemia Fagan found that the outdated computer systems used by the state’s unemployment department, which was also the target of audits in 2012, 2015 and 2020, were quickly overwhelmed when the pandemic landed. A backlog of roughly 4,200 claims before the pandemic spiked to 62,000 by April 2020, just one month into the health crisis, according to state records.

The report outlines a range of errors and anomalies created by the decades-old computers, including impossible dates for some claims, such as an adjudication issue being detected before its claim was created. More than 1,000 claims took more than one year to process, which may have been caused by the faulty date information, the report found. About 300 of those cases began in 2019, indicating the pandemic had exacerbated some of the department’s longstanding technical problems in administering unemployment assistance.

“With decisions in the data we analyzed taking an average of over three months during the pandemic, an extra two-week delay in receiving benefits can have a major impact on the lives of those eligible to receive UI,” the report reads.

The auditor’s analysis also found that some demographic groups’ claims took longer to process than others. Claims by those who identified as Asian took on average 16 days longer to process than those who did not identify their ethnicity. Native Hawaiians and Pacific Islanders took 10 days longer. White, Black and Hispanic groups, meanwhile, each took four days longer than those who didn’t identify ethnicity.

Claims for larger amounts of money, typically made by those with relatively lower incomes, were also processed slower, another inequity for which Fagan’s office said it was unable to trace the cause but that the Oregon Employment Department should further investigate.

“Oregon was one of the first states to be granted a federal UI equity access grant, in the amount of just over $4.5 million, in early 2022,” the report reads. “OED plans to stand up an Equitable Access to Unemployment Insurance Business Unit to conduct outreach at the community level and assess UI equity access through routine data analysis to identify disparities and gaps.”

Auditors also found more than 45,000 duplicate records, some of which may be illegitimate, though the state’s outdated and “rigid IT systems” make it difficult and “extremely time-consuming” to validate their legitimacy through cross-referencing with other departments.

The state is currently updating its unemployment systems, which Fagan’s office said should help resolve some of the problems found in the report. It additionally recommended the Employment Department monitor data to ensure claims are resolved quickly, use multiple communication channels — like texting — to stay in contact with residents and to consider creating an “ombuds office” that helps people navigate the process of applying for unemployment assistance.

“Real people were hurt by these delays,” Fagan said in a press release. “Without an ombuds office, people struggling to navigate a complex system had no one to advocate for them. Creating an ombuds office is a practical recommendation to fix a gap in services and help build trust in state government. Ombuds programs currently fill important roles in state government, such as the Office of Small Business Assistance here at the Secretary of State’s office.”