When Janice Roundtree, 58, first enrolled in the Pandemic Unemployment Assistance program, she called it “a miracle.”
Roundtree lives with three children and two grandchildren in her Strawberry Mansion home. She had been scraping by running a small catering and takeout business when the pandemic hit. The federal unemployment system provided a lifeline for her family amid shutdown orders and the tanking economy.
Last summer, in what came as a surprise, she received several thousand dollars in unemployment compensation at once. Confused, she went looking for answers.
“I tried to call PUA, but it was impossible. I tried to call them 1,000 times a day,” she said. Her granddaughter had helped her download an autodialing app.
Like many people who were struggling before the pandemic, she owed money for utilities and needed to make home repairs. She figured the state knew what it was doing and decided to spend the money.
But that payment turned out to be a mistake, one that affected tens of thousands of others across the state. Officials in Gov. Tom Wolf’s administration attributed the error to the state’s benefits provider, Geographic Solutions, Inc. (GSI).
As the overpayments came to light, Roundtree and the others began to see their weekly payments slashed dramatically to recoup the money. What started as a mistake wound up reducing the assistance they got going forward, compounding the struggles of out-of-work Pennsylvanians trying to make ends meet.
“I’m really glad there was a moratorium on the utilities because I don’t know how we would have survived if they hadn’t done that,” said Roundtree. “We would have had to be in some shelter or something.”
Advocates say these instances highlight significant problems stemming from Pennsylvania’s decision to award GSI a no-bid contract worth more than $4 million to create and administer Pandemic Unemployment Assistance last April.
A Keystone Crossroads investigation found that the site GSI built for the state, which has been used to issue billions in emergency aid, has bungled payments and failed to provide timely information about delays and rejections to claimants. Legal aid workers allege such mistakes violated federal law and could disproportionately affect low-income, Black and Latino applicants.
“It was kind of shocking as PUA rolled out how many problems were connected to GSI,” said Sharon Dietrich, litigation director with Community Legal Services. That group threatened to sue the state and the company in September, saying they ran the program in an “unconstitutional and illegal manner” by cutting off benefits without notice.
For Roundtree, the real-world effects of the systemic errors have been mind-numbingly frustrating.
In November, Roundtree started receiving only $1 dollar a week from the state while unemployed, then nothing at all. Unemployment attorneys say they have seen dozens of clients with payment issues flowing from the overpayment error.
“My main thing is I have this 14-year-old granddaughter that I can’t take care of because I literally have no money,” said Roundtree.
‘It was a disaster’
Pandemic Unemployment Assistance was supposed to provide a safety net for the hundreds of thousands of Pennsylvanians who were normally invisible to the unemployment system: gig workers, temps, and the self-employed.
The CARES Act created the program, but it had to be built from scratch by individual states. Pennsylvania officials said they decided to piggyback on an existing, $35 million contract with GSI to be able to move quickly.
“It was significantly more cost effective and expeditious to leverage GSI’s existing benefits modernization contract to create a system to handle PUA claims,” said Sarah DiSantis, spokesperson for the Pennsylvania Department of Labor and Industry.
GSI, which is headquartered in Florida, was already several years into its existing agreement with the state to build a new unemployment compensation portal to replace a decades-old system that runs on COBOL, a coding language created in 1959.
Prior to working with GSI, Pennsylvania had already tried to update its aging computer systems once, and wound up suing IBM for $170 million, alleging that the company went over time and over budget. The update was not adopted.
Pennsylvania next selected GSI, which according to the company’s application materials has “provided workforce development solutions to more than 30 state level workforce development and unemployment agencies,” to try again in 2017.
At the time, Pennsylvania House Labor and Industry Committee Chairman Jim Cox (R-Berks) questioned the choice of vendor during a committee hearing, noting that Louisiana, another state that had worked with GSI, had received a system “replete with errors.”
“It seems like we’re not hiring the best people,” said Cox.
Brenda Warburton, with the governor’s budget office, responded that early issues in Louisiana and Tennessee were fixed, and state officials there were satisfied. A report by WTAE in Pittsburgh last year uncovered how Tennessee and Louisiana both audited their benefits programs after GSI updated them, finding “improper benefit payments, noncompliance with federal regulations and weak security controls” as well as “undue hardship” for benefits recipients. The company responded that those issues were fixed.
GSI’s update to Pennsylvania’s system was supposed to be nearing completion when the coronavirus pandemic struck. State officials put that project on hold in order to field thousands of new applicants to traditional unemployment, and to create new programs, like PUA.
Using a purchase order dated April 22, 2020, the state tacked the program onto the existing contract with GSI, adding an additional $4.1 million, funded by the federal stimulus.
From the start, there were technical problems with the site, according to people working on all sides of it.
When the PUA portal launched, Department of Labor and Industry (DLI) claims examiner Shawn Domenico, an employee who helps shepherd claims through the system and resolve problems, said it was not fully functional.
“You know what you want to do, you go and you click on where you’re supposed to, and you type in the information, but it doesn’t actually work,” he said. For example, Domenico saw someone enrolled in the wrong benefits program who was eligible for a different one. Though he could identify the problem, the system wouldn’t let him fix it.
At the outset, the site could also not issue what’s called a financial determination, an assessment of the benefits you can receive, said several people familiar with the system. Crucially, that document is the basis for an appeal.
Unemployment compensation attorneys noticed the same things.
“Overall, it was a disaster,” said Dietrich, with Community Legal Services. After waiting weeks for the program to launch, the number of people clamoring for help crashed the site. But even people who could get through had trouble completing the application.
CLS surveyed more than 100 PUA applicants after the rollout, and more than half of people who responded said they were unable to complete their applications, citing problems getting stuck in “an endless loop” on the website or a stream of error messages.
State officials have emphasized just how large the task they faced in starting the program.
“GSI and L&I are both committed to identifying and resolving technical errors as quickly as possible, and we get to work on them immediately after we are made aware of them,” said DiSantis. “Since the PUA program began, L&I has paid out more than 44 million claim weeks totaling more than $7.9 billion.”
Pennsylvania’s struggles were not unique, she said. Some states were slower to open PUA portals and still faced problems.
“It is important to note that PUA claimants in other states that do not use GSI as its PUA vendor are also experiencing these frustrations,” said DiSantis.
Computer errors compounded over time
Many claimants, however, said the experience was punishing. Errors, once created, could linger for months as applicants battled to get through on the phone and online for help resolving their issues.
In July 2020, the issues took center stage.
Pennsylvania officials shared that GSI had accidentally double-paid some claimants. The state later confirmed that the company accidentally overpaid around 30,000 people, totalling $280 million in federal dollars. As the state attempted to claw back that money, it left some people, like Janice Roundtree, scrambling.
A month after receiving $10,125 in double payments, Roundtree got a letter explaining that there had been an error, and then her payments dropped by half — then to $1 — as the state tried to recoup its mistake.
At this point, according to state records, Roundtree has paid back about a quarter of the overpayments based on the cuts to her weekly benefits.
But not being able to depend on regular unemployment payments has put her family in a tough position. She now relies on food banks and has no money to fix a broken heater.
“They feel as though we don’t deserve good treatment … ‘Self-employed people, you’re on the fringes or whatever,’” she said. “I don’t think they give us any respect at all.”
There is also a legal question as to how much the state is allowed to claw back. Under state statute, if someone receiving benefits is overpaid through no fault of their own, the maximum amount it can take from future payments is one-third. The state has argued federal law allows them to take back as much as one-half from people on PUA. The state could not say why some people saw much more drastic cuts before publication time.
Around the same time as the overpayment errors, PUA programs around the country faced another issue: fraud. The new federal program was more permissive than previous forms of unemployment, and required less documentation, making it an easier target.
The Department of Labor and Industry has shared few details about the mechanisms of fraud, citing ongoing investigations. In August, the U.S. Attorney for Pennsylvania’s western district charged 33 people, including more than a dozen people incarcerated in state prisons, with defrauding the program.
In order to try to weed out fake users from people qualified to receive aid, the state gave GSI $352,350 for “additional anti-fraud measures,” said DiSantis.
But by automating some of its attempts to combat fraud, attorneys said innocent people were cut off from benefits, and faced barriers to reopening their claims.
Community Legal Services attorney Sharon Dietrich said many of her clients started seeing a common error message when using the PUA system: “IP – Investigation Case Special Project Scheme System.”
She learned from the state the messages were the result of an automated anti-fraud program. In an effort to crack down on fraud, GSI was pausing — and sometimes closing — accounts associated with what they believed were fraudulent IP addresses. The tool, however, was “just not thoughtful about city life” where many people could be filing from the same address or area, said Dietrich.
“One of my clients was a Temple student” living in a dorm, she said. Other people that CLS worked with filed on a single computer with the help of a caseworker at Broad Street Ministry, a social service organization in South Philadelphia.
At least one person who had received services from the group lost his home after his PUA payments stopped due to the glitch, according to caseworker Crossley Simmons.
“Because he did not have access to these funds, he became unhoused and lost what was his life,” she said. “A lot of folks viewed it as a lifeline, and [glitches] created a lot of urgency in our building,” continued Crossley.
Domenico, the claims examiner inside the Pennsylvania DLI, said it’s not uncommon to try to automate some fixes. “How do you look at a million claims? You don’t,” he said.
Claims would stop until a human being could assess them, said Domenico, but after years of low staffing, DLI employees have struggled to keep up with demand. The state eventually hired another company, ID.me, to provide identification verification services.
Domenico said it can take months or years to learn the ins and outs of a new program, and that claims examiners must become experts in the laws they interpret when weighing a case.
“It’s too complicated, there’s no computer program that can fix that,” he said.
A question of due process
In September 2020, CLS threatened a class action lawsuit against the state on behalf of PUA claimants in a letter sent to Pennsylvania’s general counsel, Gregory G. Schwab, as well as top officials with the Department of Labor and Industry, and Geographic Solutions, Inc. President Paul Toomey.
Federal standards for due process and timeliness, meant to protect claimants, had been violated by the way the state and its vendor administered the program, wrote CLS attorneys Dietrich and Jamie Gullen, with University of Pennsylvania law professor Seth Kreimer. Attorneys with Philadelphia Legal Assistance and Legal Aid of Southeastern Pennsylvania, though not involved, corroborated the critiques described in the demand letter.
Specifically, CLS sought fixes to the state system including: continuing payments while claims were under investigation, explaining to people why their benefits stopped, and allowing them a chance to appeal. The group also called on the state to “reconsider the role of GSI.”
The letter described how fraud cutoffs could disproportionately fall on Philadelphians and low-income people, particularly Black and Latino claimants living in dense urban areas or utilizing social services. People without secure housing, or experiencing other forms of instability may also have a harder time coming up with needed documentation on short notice, they wrote, “But this does not mean that they are committing fraud.”
“DLI staff have generally acknowledged the merits of our positions and told us that they have asked GSI to make the necessary changes to bring the State into compliance,” reads the letter from the unemployment attorneys. “However, they report, their requests often are refused or are postponed into the indefinite future.”
Through a PR firm, GSI President Paul Toomey said his company was a software developer that could not comment on the topic, directing questions to the state.
After the letter, the state made some changes, such as adding more information to claimant’s dashboards, so they could see which issues had halted their claims.
“L&I continues to work with Community Legal Services to address their concerns when possible,” said DiSantis. “L&I cannot provide unemployment payments to individuals who are not eligible because this would be in violation of federal law.”
‘They don’t care’
The federal government authorized an extension of the PUA program on December 27, 2020. It provided for another 11 weeks of payments. Claimants and attorneys found some of the issues from the first rollout have reemerged.
“The system is saying strange things, like it didn’t recognize [the claimants] from 2020. They have to reprove their claim all over again,” said attorney Deborah Steeves, attorney with LegalAid of Southeastern Pennsylvania.
“Many people with the [overpayment] issue are not receiving any benefits whatsoever now,” said Julia Simon-Mishel, supervising attorney with Philadelphia Legal Assistance. They are still considered to have run out of benefits, even though the federal government renewed them, said Simon-Mishel.
DiSantis said while there were some glitches when the most recent extension began, “all PUA system issues have been resolved.”
Nearly a year since the program was first authorized by Congress, as yet another stimulus bill is being debated, many claimants report ongoing frustrations.
The Philadelphia Unemployment Project, a nonprofit which helps people navigate state benefits such as PUA, recently launched an online petition calling for improved claim-handling across all programs. It demands “accountability now,” including better customer service and on-time payment.
For Roundree, the experience has only heightened her sense that the system isn’t supposed to work — at least not for her.
“I’m African American … [on PUA, there are] people of color, self-employed, gig workers, nominal people. We just don’t mean anything to them. We don’t make a great amount of money,” she said. “So they don’t care.”
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