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Outdated computer system made wait times longer for Oregon unemployment during pandemic, audit finds

The audit from the Oregon Secretary of State's office faults the Oregon Employment Department for not modernizing its systems and processes sooner.

SALEM, Ore. — The Oregon Employment Department (OED) struggled with an unprecedented surge in unemployment claims when the pandemic began, leaving some beneficiaries waiting weeks or months for their checks, but a new audit says the department's outdated systems exacerbated the problem.

The audit from the Oregon Secretary of State's office, released Wednesday, faults the department for failing to update systems and procedures that had been highlighted as outdated or inefficient in multiple previous audits, which limited its ability to pay out benefits quickly during the crunch.

The agency also did not have enough staff or physical phone lines to deal with the overwhelming number of calls, the audit found, and its antiquated computer system couldn't be customized to adapt to new federal aid programs.

"If they would've adopted a modern system several years ago, it's likely that would have more flexibility to re-code that system to enable those programs to be operated efficiently," audit manager Ian Green said during a press conference Wednesday.

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Some unemployment insurance claims go through an adjudication process to verify whether an applicant is eligible for benefits. The department was already struggling to complete adjudications in a timely manner, according to the audit, and the pandemic made the wait times much worse.

"One thing Oregon did better than others states, or at least did relatively well in comparison, was a lower rate of fraud," Secretary of State Shemia Fagan said. "But there's a trade-off. The more fraud protections you have, the slower the controls for being anti-fraud make those processes."

The audit also found that the adjudication process appeared to take longer for some racial and income-level groups.

"We weren't able to identify any particular cause for why certain races and certain income levels had longer adjudications, but it was a concerning trend to us that we felt that OED should be monitoring going forward," Green said.

Those demographic groups didn't show significant differences in wait times before the pandemic, he added, but during the pandemic some of them had to wait an extra two weeks on top of the already long adjudication process.

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The audit recommends that the department modernize its computer system, monitor data to detect when claims get stuck in adjudication and study creating an ombuds office to help applicants navigate the system. 

The report credits the Oregon Unemployment Department for already moving to address some of the issues outlined in the audit, and pledging to act on the rest.

The report also acknowledges that every state struggled to keep up because the scale of the surge was completely unprecedented — Oregon's unemployment rate nearly tripled from February to April 2020 — but it still faults Oregon's outdated system as a contributing factor.

"(Oregon Employment Department staff) care about Oregonians and they did work under very adverse circumstances to the best that they could," audits director Kip Memmott said during the press conference. "But we do need to improve it, and this report is a map to go forward with that."

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