Before launching a new unemployment benefits system in September that has faced criticism from users, the Arizona Department of Economic Security delayed the tool’s rollout by nearly a year.
According to a report on the agency by the Arizona Auditor General’s Office, DES began developing the new system, now called CACTUS, in December 2022 and planned to launch it in October 2024.
In a meeting last year with a state-level regulatory committee that oversees new technology systems, a DES representative said the project was designed to upgrade the existing 35-year-old unemployment system.
At that meeting, the Information Technology Authorization Committee approved the agency’s request to delay the launch until September of this year for a number of reasons “including issues with data conversion and the amount of changes needed to bring the new IT system into compliance with State laws and regulations.”
ABC 15 first reported on the auditor’s report, which was published on Sept. 30.
After the CACTUS system went live on Sept. 7, users began complaining on social media about glitches, delayed payments and other issues they blamed on the new portal.
Several Arizonans told KJZZ News about their experiences, including a Tolleson resident who says she lost her car after going without benefits for weeks.
Following multiple requests to comment on issues with CACTUS and complaints from users, the agency never mentioned the audit report or delayed implementation of the systems.
A DES spokesman instead claimed CACTUS is largely working as it should — though he acknowledged an overpayment error that the agency claims is affecting “a very limited number of claimants.”
“In the first two benefit weeks, over 60,000 claims were filed, and more than $13.3 million in UI (unemployment insurance) benefits was paid to claimants,” DES spokesman Brett Bezio said. “This is consistent with the number of claimants filing before CACTUS was implemented, indicating that the majority of individuals are able to successfully file and receive payment without complication.”
And Gov. Katie Hobbs repeatedly told KJZZ News she had no knowledge of problems with the system.
Help is hard to find
In the meantime, users continue to complain about the new system and say it is difficult, if not impossible, to get ahold of the Department of Economic Security for help.
“If you want to try and make a phone call and talk to somebody, good luck,” said Jeff Richards, a resident who says state lawmakers had to intervene on his behalf to help clear up issues with his unemployment benefits. “Because you’ll probably be on there for 40, 45 minutes, and then they’ll cut you off after about a half hour.”
According to the September audit report, that’s a longstanding issue.
“We found that the Department provided some UI claimants with accurate and quality phone customer service in calendar year 2023 but provided other claimants with poor-quality customer service and inaccurate information, and some claimants experienced long wait times to reach Department call center staff, potentially causing claimant hardships and frustration,” the report said.
The Auditor General also found DES has routinely taken too long to respond to Arizonans who appeal the agency’s decisions about their unemployment claims and other benefits, including food assistance.
According to the Auditor General, federal and state regulations set timeframes by which an administrative law judge is supposed to rule on those appeals.
For unemployment insurance, 80% of those decisions are supposed to be issued within 45 days after an appeal, but the agency failed to meet that deadline in 99.6% of cases in 2024, according to the audit.
“The Department is under corrective action plans by both the U.S. Department of Labor (DOL) and the U.S. Department of Agriculture’s Food and Nutrition Service (FNS) related to the untimeliness of issued unemployment insurance and nutrition assistance appeals, respectively,” auditors revealed.
Staffing struggles
Bezio, the DES spokesman, said the agency is coping with layoffs due to federal budget cuts earlier this year.
“This reduction has impacted our capacity to serve Arizonans, and individuals who need additional review on unemployment insurance claims or need to contact our call center may experience longer wait times,” Bezio said. “We appreciate the public’s patience at this time.”
Richards, one of the residents experiencing issues, questioned why the agency would move forward with rolling out a complicated new system after dealing with layoffs affecting hundreds of employees.
“Why do you want to put a new system in that’s going to affect thousands upon thousands of people when you’re going to have 500 people laid off, and you’re going to take quite a few of them from the unemployment insurance agency department?” Richards said.
Complaints
Some affected Arizonans said they’ve reached out to the Arizona Ombudsman Citizens’ Aide for help. That’s an independent state office that assists citizens who believe they are being treated unfairly by state agencies or regulators.
According to the ombudsman’s office, it received 131 complaints between Sept. 7 and Oct. 17 about DES’ Division of Employment and Rehabilitation Services, which administers the unemployment benefits program. That’s a 31% increase over the 101 complaints it received about the division between Aug. 1 and Sept. 6, before CACTUS launched.
According to the ombudsman, those complaints cover all areas administered by the division, including unemployment benefits, vocational rehabilitation and child care.
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