Tuesday, February 28, 2012

Whistle Blowers Say Mismanagement At Department Of Workforce Development Contributed To $2 Billion Debt

The state of Indiana's unemployment trust fund that is used to pay the benefits of unemployed workers is $2 billion in debt to the federal government. While the worst economic downturn since the Great Depression contributed greatly to the fund's insolvency, current and former employees of Indiana's Department of Workforce Development say management decisions exacerbated the problem. WISH-TV's Deanna Dewberry had an excellent report last night discussing how management encouraged workers to resolve claims in favor of employees to speed up processing of unemployment claims, leading to many errors. One of the key managers responsible for the bad decision, according to Dewberry's report, was actually honored by Gov. Daniels for a job well done.

Inefficient. Poorly managed. Sloppy. These strong words are being used to describe the agency that pays Indiana's unemployed. Whistleblowers came exclusively to I-Team 8 to expose this story years in the making.
One of those whistleblowers is a former DWD employee who we'll call Ken. He knows the Department of Workforce Development well. He worked there as one of the people who decides whether you're eligible for unemployment. When asked whether the unemployed can be assured their cases will be decided fairly and accurately he answered, "I would not have faith, no. And I don't think a lot of people do."
Ken doesn't want us to identify him for fear of state retaliation. But another former DWD worker, Andrew Gray, shared his story openly.
"It's a poorly run department," said Gray.
The state's unemployment rate skyrocketed from 4.7 percent in January of 2008 to a record high 10.9 percent just a year and a half later. As unemployment reached its peak, internal e-mails obtained by I-Team 8 detail how the Department of Workforce Development - drowning in claims, calls and appeals - may have resorted to questionable tactics that contributed to a $2 billion debt.
He points to an October 2009 e-mail from Ronnie Miller, then the Unemployment Insurance Director of Benefits and Appeals. In it, Miller told DWD employees to get the number of appeals to a "more manageable number" that week. He instructed them to "correct every case based on information provided by the claimant, fix what they say is wrong." He goes on to say, "I understand that this might create some error on these cases, and we are willing to accept that in exchange for getting the case count reduced."
When asked whether he believed some unemployed claimants were paid who shouldn't have been and vice versa, Ken replied, "Oh, I can guarantee that, yeah."
I-Team 8 uncovered memos even more disturbing. An e-mail with DELETE DOCUMENT WORK in the subject line tells employees to delete documents older than 150 days. It went to DWD workers who deal with reports from the public about problems, errors and fraud in the system.
"Remove from your inbox," the e-mail reads. "You do not need to do anything else with them." That means hundreds of people who wrote DWD about problems and waited for a response are likely still waiting. No one ever read your letter or e-mail. It was likely deleted.
"He wanted the number down so he sent an e-mail out department-wide to delete 50 a day," said Gray.
For reducing the caseload, Ronnie Miller was honored by the governor with the prestigious public service achievement award. Miller, who now works in the private sector as an attorney specializing in ethics, refused our request for an interview.
Workers allege it wasn't quality, but quantity and quotas that mattered.
Ken says there was a motto in the department that decided whether unemployed Hoosiers are eligible for unemployment.
"Read it and write it, or read and write for short," said Ken . . .
DWD Commissioner Mark Everson refused to be interviewed by Dewberry for the story. She finally attempted to ask questions of him at a monthly meeting where he made a presentation. He left the room quickly to avoid answering her questions. A spokesperson for the agency told Dewberry to submit her questions via e-mail. She got a response with a general denial and nothing more.

Imagine if Gov. Daniels was running for president right now. The Obama administration would have the national media all over the Department asking questions about why it has the worst error rates in the country. The reporters would also be packed in Judge David Dreyer's courtroom in downtown Indianapolis where the state and IBM are suing each other trying to learn all they could about how badly Daniels privatization of the Family & Social Services Administration failed, costing taxpayers more than $500 million. With no national campaign, it's up to the local news media to scrutinize the Daniels administration, which generally treats it with kid gloves.


Concerned Taxpayer said...

So, nobody knows how much, if any, was OVERPAID, as well as UNDERPAID, or if the debt has been caused by the MASSIVE blows to the economy caused by the Obama Regime's policies over the last 3 years.
So, maybe we shouldn't automatically blame Daniels or the Indiana system for trying hard to keep up with paying unemployment to people.

Gary R. Welsh said...

There were a lot of odd decisions being made. I had a client who fired an employee for stealing and DWD paid him unemployment benefits over the employer's objections. The fired employee then filed for worker's comp benefits. When the client complained to DWD, they finally agreed he shouldn't have been getting benefits. I also have heard about how the telephone hearings work. They tell the employer and employee to be prepared for a telephonic hearing at a certain time. You wait by the phone. It never rings. You call later. They claim you didn't answer the phone and tell you they've already decided the case in favor of the employee.

Bradley said...

Deanna's story was very well done, and from what I understand, this will be a continuing series. In fact, she's doing another story tonight during the 6 PM news on Channel 8.

Gary -- what you describe is a typical day at the office at DWD, and that's disgusting it happened that way. Unfortunately, that's a common, recurring story, as is what happens with appeals (that's a WHOLE other bad issue there).

I understand the need to blame the Obama administration, and you will (and it deserves it often), but this was PURELY of the Daniels administration's doing. Their modernized system was to be done in April 2008 (Bush II admin), the first federal extension of benefits was done in July 08 (Bush admin), the UI Trust Fund went bankrupt in November 2008 (Bush admin), Indiana's DWD was responsible for overpaying more claimants than any other state agency in 2008 (Bush admin). The problems, as Gary noted, have been numerous. And they started 7 1/2 years ago, during the Daniels' administration's first year.

I don't understand why people keep defending Mitch as if he was the second coming of Christ on Earth when he's nothing but a Fiscal Fraud. Obama (and Bush II) have done much to destroy our federal government, but Daniels has devastated Indiana and always seems to get a pass. Not much longer, though.