Kentucky contracts with global accounting giant to clear out backlog of unemployment claims

Gov. Beshear announces contract to help process unemployment claims

FRANKFORT, Ky. (FOX19) - Gov. Andy Beshear announced a contract Tuesday with global accounting giant Ernst and Young to help Kentucky deal with its backlog of unemployment insurance claims.

The governor made the announcement during his weekly update on COVID-19 in Kentucky. He begins speaking about the announcement in the 33rd minute of the video attached above.

According to Beshear, the state has round 56,000 un-processed claims from March, April and May, representing thousands of Kentuckians who lost their jobs during the pandemic’s early days but still have not seen state benefits.

The state will spend $7 million in CARES Act money on the EY contract, which will begin July 1 and last four weeks, according to Beshear.

Around 100 EY workers already trained in claims processing from a similar project with the state of Colorado will begin processing claims in Kentucky immediately. They will eventually be joined by another 100 workers, tripling Kentucky’s unemployment work force by Monday.

The total commitment is for 300 EY workers, bringing the total number of people processing claims in Kentucky to 400 by July 13.

“What it means is help is on the way, and we are spending what it takes to get it done,” the governor said.

Beshear put the cost of doing the same project in-house at $30 million and said it would take 4-6 months to complete. Conversely, the goal with the EY contract, Beshear said, is to clear out the claims backlog by the end of July without having to hire and train government workers that would then be out of the job themselves as the pandemic’s temporary surge in claims dwindles.

As he has done previously, Beshear described the state’s unemployment system as “starved” following 2017 cuts that closed 22 of 51 local unemployment offices and terminated 95 employees. Meanwhile, the unemployment office budget, he said, went from $41 million in 2010 to $25 million in 2018.

Beshear also faulted a computer system he says has not been meaningfully updated in 20 years. That, he explained last week, leads to situations where an applicant might accidentally or negligently check the wrong box, but the system won’t notify them.

“It accepts it, it thanks you for it, and then it rejects you,” Beshear said last Tuesday.

In the same press conference Beshear expressed frustration that the system could not fulfill simple requests, such as when the governor asked for a list of the first applicants to file a claim in March whose claims remain unprocessed.

“if you design a system to tell people ‘no,' and then you starve that system over and over, you’re going to be unprepared for what we’re seeing now,” the governor said.

He continued: “Now, that’s in the past. Just because it explains where we are right now doesn’t mean I don’t have a duty to fix it. I’m going to. What I hope is we have bi-partisan support through every branch of government to make sure this doesn’t happen again.”

Actions Gov. Beshear says his administration has taken to improve the state's "starved" unemployment system during the pandemic.
Actions Gov. Beshear says his administration has taken to improve the state's "starved" unemployment system during the pandemic. (Source: Commonwealth of Kentucky)

No masks mandate (yet)

Beshear declined Tuesday to issue a statewide mask mandate as has been issued in other states were cases are rising, like North Carolina and Kansas.

“It’s because of where our numbers are,” Beshear explained, though he added he remains worried about the number of people he sees not wearing masks and called masks “the best way to show you care about other people.”

“This may be the biggest test and the most difficult test we ever face,” he said. “Let’s make sure we pass it.”

The governor reminded Kentucky businesses that the state retains the power to shut them down if their employees are not wearing masks: “That is mandatory.”

He also encouraged businesses, such as bars and gyms, to encourage social distancing as much as possible, explaining it is in their best interest to do so lest a case spike requires them to shut down again.

Beshear said if Kentucky experiences a “significant increase” in cases, he will look at mandating masks, but that mandate would likely only apply within closed spaces where social distancing is not possible.

But the governor added a case surge likely would prompt “surgical” action by the state and might not require the broad mandates imposed earlier in the pandemic.

COVID-19 Update

The governor reported 282 new COVID-19 cases in Kentucky for a total of 15,624 cases since the onset of the pandemic. He said the new cases maintain Kentucky’s case-curve plateau.

“We are in the middle of one of the greatest success stories in the history of the commonwealth, about how we have stood up and protected each other,” Beshear said.

Some 408 Kentuckians are currently hospitalized with the virus, and 75 are in the ICU.

Kentucky’s positivity rate is also faring well. Of all patients tested prior to undergoing elective procedures, fewer than 1 percent come back positive for the virus, the governor reported.

The positivity rate for all drive-thru testing and all testing in nursing homes and prisons remains under 3 percent.

Five new deaths were also reported Tuesday for a total of 565 deaths in the state.

More information on Kentucky’s COVID-19 numbers can be found here.

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