Virginia unemployment call centers look worse than at pandemic’s peak, auditor said

As the Virginia Employment Commission rushes to pay out claims after a federal class-action settlement, it continues to face challenges with its call center and an ongoing upgrade to its IT systems, a state auditor told lawmakers Tuesday.

The state benefits agency, which was ordered in May to resolve 95% of its 92,000 unpaid claims by Sept. 6, is continuing to answer only “a small minority” of the new calls to its call center, said Lauren Axselle, a project leader for the Virginia Joint Legislative Audit and Review Committee. When pressed by lawmakers for statistics on the call center’s performance, Axselle didn’t provide exact numbers but said they look “a little bit worse currently than they did during the peak of the pandemic.”

The Virginia Employment Commission said last week it is making headway on paying out claims, adjudicating more than 52,000 of its 92,000 cases since the settlement. But Axselle warned lawmakers that this progress could have “some negative downstream effects” for both the agency and its constituents, including a reduction in the accuracy with which claims are assessed. A growing number of bad actors have capitalized on states’ disorganization, and unemployment insurance fraud exploded during the health crisis.

Following a suggestion by Virginia legislators earlier this year that auditors investigate a successful call center established by the Virginia Department of Health to field questions about COVID-19, Axselle said she recommended the employment agency follow a similar model. She told lawmakers the employment commission has since begun working with the same contractor that operates VDH’s call center, which could provide “several hundred new call center operators,” but noted the center has also struggled with employee turnover.

The work follows a May 18 order by Gov. Ralph Northam for the employment agency to spend $20 million to “dramatically” expand its ability to process complex claims. This directive came with an Oct. 1 deadline for the agency to modernize its 41-year-old benefits system. Axselle said she was recently given a preview of the system and that she believes it “has the potential to offer a significantly improved claimant experience.” But, she added, VEC does not plan on meeting the Oct. 1 deadline, and that only the second phase of the three-phase project will be completed.

“We do have some concerns that even if VEC and the contractor are able to turn on the new system by Oct 1, there may be user problems,” Axselle said. “There were several problems with the phase two of this three-phase [user interface] modernization project that remain unresolved to this day.”

Among the concerns, she cited “a fairly limited focus” on end-user testing and little training for staff on how to use the new system. She also said there will likely be a three- or four-day “blackout period” in which neither the new or old system will be available, which could further frustrate people seeking benefits. Among the struggles the agency is facing, Axselle said, is a shortage of staff with the technical skills to migrate data from the old system to the new one.

“We do not usually recommend anything to agencies while the study is ongoing, however during this study we have recommended to VEC leaders they take specific actions where we have felt confident the actions will lead to near-term improvements,” she said.

Auditors plan to release an interim report on the employment agency’s IT system and staffing issues in September, followed by a final report in November.