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GDOL’s Unemployment Insurance Pandemic Response: Many factors contributed to payment delays (Georgia Special Examination Report No. 21-15, February 2022)

Summary

Georgia’s Performance Audit Division (State Auditor Greg S. Griffin) issued this special examination, Report No. 21-15 of February 2022, at the request of the House and Senate Appropriations Committees, which asked for an evaluation of unemployment insurance (UI) benefits administered by the Georgia Department of Labor (GDOL) during the COVID-19 pandemic. It found that the unprecedented volume of claims made delays inevitable, but that GDOL’s claims management and customer service systems were also factors. In most periods reviewed, half of initial payments took less than three weeks, but approximately 37,400 initial payments were made more than 120 days after initial eligibility. New initial claims spiked to approximately 716,000 within two months, and GDOL paid approximately $14.6 billion in benefits in fiscal year 2021, up from $302.3 million in fiscal year 2019.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

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SPECIAL EXAMINATION • REPORT NUMBER 21-15 • FEBRUARY 2022




GDOL’s Unemployment Insurance Pandemic Response
Many factors contributed to payment delays




Greg S. Griffin | State Auditor
Leslie McGuire | Director
                                                                                                              February 2022
Special Examination Report No. 21-15



              Performance Audit Division
              Greg S. Griffin, State Auditor
              Leslie McGuire, Director


                                                 Unemployment Insurance Pandemic Response
Why we did this review
                                                 Many factors contributed to payment delays
The House and Senate Appropriations
Committees requested an evaluation of            What we found
the unemployment insurance (UI)                  During the COVID-19 pandemic, claims for unemployment
benefits administered by the Georgia             insurance (UI) benefits increased significantly, and many
Department of Labor (GDOL). The                  claimants experienced lengthy delays in receiving payments.
committees were specifically interested          The unprecedented volume of claims made delays inevitable,
in the timeliness of benefits during the         but the Georgia Department of Labor’s (GDOL) claims
COVID-19 pandemic, as well as staff              management and customer service systems were also factors.
hiring and training.                             GDOL should continue planned improvements to both.
Based on the request, we evaluated how
long it took GDOL to process claims and          Many claimants experienced significant delays in
                                                 their UI benefit payments.
respond to claimant contacts, whether
                                                 Georgia UI claimants experienced significant delays during the
GDOL took reasonable steps to adjust
                                                 pandemic. Half of UI payments were made in less than three
staffing, whether technology challenges
                                                 weeks of the first week the claimant was eligible for benefits;
impacted timeliness, and whether
                                                 however, approximately 37,400 initial payments were made
claimants had access to clear and
sufficient GDOL communication.
                                                 more than 120 days after initial eligibility.
                                                 Claimants nationwide experienced payment delays due to the
About Unemployment
                                                 unprecedented increase in UI claims. During the pandemic,
Insurance
                                                 Georgia’s new initial claims spiked to approximately 716,000
Unemployment insurance provides                  within two months and remained elevated for more than a year.
payments to eligible individuals who             By contrast, claims rose gradually during the Great Recession
become unemployed through no fault               to a high of 76,000 over 14 months.
of their own. The program is
administered by GDOL and overseen                Delays were driven by several underlying causes.
by the U.S. Department of Labor.                 GDOL could not provide reliable data that would allow an
                                                 evaluation of all factors contributing to processing and
In fiscal year 2021—the first full year          payment delays. However, our review identified several
of the pandemic—GDOL paid
                                                 underlying issues, as described below.
approximately $14.6 billion in
benefits. This represented a significant        •    Limited Automation of Claims – GDOL’s process for
increase from the $302.3 million in                  determining eligibility and communicating with claimants
fiscal year 2019. Most benefits were                 requires significant staff involvement. In the years before
associated with federally funded                     the pandemic, the number of staff devoted to UI benefits
programs (approximately $12 billion),                decreased by 32%, so fewer employees were available to
though regular state UI benefits also                address the claim surge. GDOL increased UI hours by
increased—from nearly $300 million                   diverting staff, encouraging overtime, and hiring
in 2019 to $2.7 billion in 2021. In                  contractors and retirees. However, departures hindered
2021, these benefits were funded by                  efforts to increase staff numbers.
employer taxes and federal dollars.
                                                •    New Federal Programs – Several new programs were
                                                     created to expand payment eligibility, which required GDOL


             270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone 404.656.2180 | audits.ga.gov
        to create policies, train staff, and update IT systems. One prominent program—the Pandemic
        Unemployment Assistance program—was particularly difficult to implement because it applied to
        those not typically eligible for UI (e.g., self-employed).
   •   Risk of Fraud – UI fraud increased significantly during the pandemic. According to GDOL, the
       controls to prevent fraud also catch unintended mistakes (e.g., incorrect Social Security Number),
       causing delays in legitimate claims.
   •   Claimant and Employer Errors – The claim surge included many first-time filers who were
       unfamiliar with UI, and errors were more likely because key communications were unclear and
       claimants could not reach GDOL for assistance. Additionally, while GDOL’s requirement for
       employers to file claims reduced processing times, delays occurred when employers failed to
       timely certify unemployment.

GDOL was unable to adequately respond to claimants’ customer service needs.
Claimant inquiries to GDOL increased significantly during the pandemic, and many claimants’ attempts
were unsuccessful. For example, call volume in March 2020 (635,000) was six times higher than the
prior month and further increased to more than nine million in April and May. However, only 4% of calls
were answered; most were not connected due to limited phone system capacity. Data limitations
prevented us from analyzing additional call performance and from analyzing responsiveness to emails or
web inquiries, which also increased significantly.
Many calls and inquiries were directed to staff in the career centers and other GDOL divisions, who also
assisted with processing claims. In April 2021, GDOL expanded its dedicated customer service unit to 16
staff, who exclusively answer calls. While GDOL hired contract personnel to assist with various aspects of
the claims process, it contends that contract personnel would not have the experience required to
respond directly to claimants.

GDOL needs better data to manage the UI program, particularly when claims increase.
GDOL has significant information in its claims management system but does not produce sufficient
reporting to help evaluate performance, identify areas for improvement, or set priorities. We found that
the agency is not able to produce timely, reliable reports from the system.
Additionally, GDOL does not have sufficient information to manage customer service operations. For
example, it lacks information about call volume or typical metrics, such as answer rate. GDOL also has
no system to track and ensure that claimant emails and voicemails are addressed. Instead, staff must
review notes in the claims management system to determine whether a claimant has been contacted. In
some cases, this resulted in follow-ups from multiple staff, while other claimants received no response.
What we recommend
In addition to the information provided, we recommend GDOL collect additional, reliable information to
manage the UI program, particularly related to customer service. We also recommend GDOL increase
automation of its claims processing and improve its claimant communications regarding status and
document submission. We recommend GDOL incorporate lessons learned from the pandemic into a
formal recession plan to prepare for future increases in claim volume. See Appendix A for a detailed list
of recommendations.

Agency Response: GDOL stated that timeliness delays largely resulted from unprecedented claim
volume, new programs, and limited funding but disagreed that limited automation was a factor.
Regarding customer service, GDOL is using federal funding for a new customer service system. GDOL
agreed that additional information would assist UI management and said it is currently upgrading its
information and reporting systems. GDOL’s response included additional details and several points of
disagreement. These are included throughout the report, along with auditor responses.



           270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone 404.656.2180 | audits.ga.gov
GDOL’s Unemployment Insurance Pandemic Response




Table of Contents

Purpose of the Special Examination                                                                           1


Background                                                                                                   1

COVID-19 Impact on Unemployment                                                                              1
Unemployment Insurance                                                                                      2
GDOL Staffing                                                                                               8
Financials                                                                                                  9

Timeliness of Payments                                                                                     12

Finding 1:        Benefit payment delays were driven by unprecedented volume, limited automation of
                  claims processing, and other factors.                                                    12

Management Information and Planning                                                                       20

Finding 2:        GDOL lacks information that would assist UI program management with planning and
                  decision making.                                                                 20
Finding 3:        A documented plan would help GDOL better manage future increases in claim volume. 24

IT System                                                                                                 28

Finding 4:        While GDOL has made key updates to its claims management system, the system could
                  better facilitate claims processing and communication with claimants.             28

Staffing                                                                                                   34

Finding 5:        The number of GDOL employees has declined over time, resulting in fewer employees
                  to address the surge in claims.                                                          34
Finding 6:        GDOL’s staffing actions to address the claims increase were similar to strategies used by
                  other state UI programs.                                                                  35

Communications                                                                                             43

Finding 7:        Information available to claimants was not always clear and accurate, which
                  contributed to application errors, processing delays, and increased calls and emails
                  from claimants.                                                                          43

Policy Changes                                                                                            48

Finding 8:        GDOL adjusted policies to reduce claims processing times but could have considered
                  additional steps.                                                                        48
GDOL’s Unemployment Insurance Pandemic Response
Finding 9:        GDOL’s requirement that employers file claims on behalf of certain claimants led to
                  faster processing of many claims but to delays or overpayments in some cases.         51
Finding 10:       Career center closures allowed staff to focus on claims processing but increased
                  challenges for claimants.                                                             54

Customer Service                                                                                        56

Finding 11:       The need for claimant assistance grew exponentially during the pandemic, but many
                  claimants were unable to obtain a response.                                           56
Finding 12:       GDOL does not have systems in place to track claimant inquiries, which leads to
                  unfulfilled requests, delays in claims processing, and additional inquiries.          61

Appendices                                                                                              64

Appendix A: Table of Recommendations                                                                    64
Appendix B: Objectives, Scope, and Methodology                                                          66
Appendix C: Career Center Map                                                                           69
Appendix D: Timeliness                                                                                  70
Appendix E: Staffing                                                                                    72
GDOL’s Unemployment Insurance Pandemic Response                                                                     1




              Purpose of the Special Examination
                                This review of the administration of Unemployment Insurance (UI) by the
                                Georgia Department of Labor (GDOL) during the COVID-19 pandemic was
                                conducted at the request of the House and Senate Appropriations Committees.
                                Our review focuses on the following questions:

                                        •   How long did GDOL take to process claims for each UI program?
                                        •   Did GDOL take reasonable steps to adjust staffing and training in
                                            response to the high volume of UI claims during the pandemic?
                                        •   Did technological challenges impact GDOL’s timeliness of claims
                                            processing?
                                        •   Did claimants have access to clear and sufficient communications
                                            from GDOL?
                                        •   Did GDOL respond to contacts from claimants in a timely manner?

                                A description of the objectives, scope, and methodology used in this review is
                                included in Appendix B. A draft of the report was provided to GDOL for its
                                review, and pertinent responses were incorporated into the report.

              Background
                                COVID-19 Impact on Unemployment
                                In early 2020, the COVID-19 pandemic significantly impacted unemployment
                                across the U.S. and in Georgia. The governor declared a statewide public health
                                state of emergency on March 14, and public schools were closed on March 16.
                                Some types of businesses were temporarily closed or capacity limited. On April 2,
                                a statewide shelter-in-place was issued that limited large gatherings and closed
                                non-essential businesses.

                                As shown in Exhibit 1, unemployment increased substantially and rapidly; by
                                April, Georgia’s statewide unemployment rate—as reported by the U.S.
                                Department of Labor (U.S. DOL)—rose to 12.5%, more than three times
                                February’s unemployment rate of 3.5%. The rate quickly declined from its peak
                                but remained higher than the pre-pandemic rate for 17 consecutive months.
GDOL’s Unemployment Insurance Pandemic Response                                                                             2




                                Exhibit 1
                                Statewide Unemployment Increased Sharply During the Pandemic,
                                January 2020 - June 2021

                                              716K, 12.5%
                                                                                              New Initial Claims 1


                                                                                              Unemployment Rate



                                                                                                                     4.0%
                                       3.5%

                                        17K                                                                          45K

                                   Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

                                                            2020                                        2021
                                   1 Estimated new initial claims, excludes federal pandemic programs


                                   Source: U.S. DOL Bureau of Labor Statistics, U.S. DOL Employment and Training
                                   Administration, and GDOL claims data



                                Unemployment Insurance
                                Unemployment insurance (UI) helps address economic insecurity by providing
                                payments to eligible individuals who become unemployed through no fault of
                                their own. The Social Security Act of 1935 first established UI in the United
                                States, and Georgia’s state program was enacted by the Employment Security
                                Law of 1937.

                                UI is a joint state and federal program administered at the state level by the
                                Georgia Department of Labor (GDOL). The U.S. DOL provides oversight by
                                issuing operational guidance, establishing program standards, and conducting
                                audits. It also provides grants to states to assist with UI program administration.
                                State law establishes parameters for the state UI program, such as benefit
                                amounts and maximum weeks. However, during periods of economic recession,
                                the federal government has supplemented state UI with temporary programs that
                                extend and increase benefit payments.

                                In addition to the existing state UI program, GDOL began administering multiple
                                temporary federal programs created to combat the economic effects of the COVID
                                pandemic. Georgia discontinued the temporary federal programs in June 2021.

                                Georgia’s UI Provisions
                                To be eligible for Georgia state UI benefits, a claimant must be a legal U.S.
                                resident who:

                                        •     Became unemployed due to no fault of their own;
GDOL’s Unemployment Insurance Pandemic Response                                                                             3




                                         •   Earned sufficient wages within the last four or five quarters of
    Claimant – An                            employment;
    individual seeking
    unemployment                         •   Received wages from an eligible employer that pays UI payroll taxes;
    benefits                                 and
                                         •   Worked or earned wages in Georgia for the past two years.1

                                In Georgia, weekly benefit amounts for regular (state) UI range from $55 to
                                $365, based on the claimant’s wages received during their last four or five
                                quarters of employment. Benefits generally last up to 14 weeks but are extended
                                to up to 26 weeks during periods of high unemployment.

                                To continue receiving benefits, claimants must comply with certain requirements.
                                They must report earnings to GDOL, be available for and actively search for work,
                                and register for work with EmployGeorgia.com. Claimants can work less than
                                full-time while receiving benefits. However, benefits are reduced if they earn
                                more than a set amount per week. During the pandemic, GDOL suspended or
                                altered some provisions.

                                Georgia’s UI Claims Process
                                Most UI claims are filed by claimants, though employers can file on a claimant’s
                                behalf in limited circumstances. Regardless of the filer, GDOL must determine
                                whether the claimant is eligible prior to paying benefits. Each week, claimants (or
                                employers in some cases) must certify that they still meet eligibility
                                requirements.

                                GDOL officials indicated that before the pandemic claimants typically received a
                                benefit payment about three weeks after the initial filing, but the time frame was
                                shorter when the employer filed. The U.S. DOL has a timeliness standard that
                                87% of initial payments be made within that 21-day period.

                                Individual Claims
                                GDOL conducts two separate reviews to determine a claimant’s initial eligibility,
                                as shown in Exhibit 2. The monetary determination assesses whether the
                                claimant has enough wages to qualify for benefits, while the nonmonetary
                                determination assesses whether the claimant meets other eligibility
                                requirements, such as being unemployed through no fault of their own. Claimants
                                apply for benefits by filing an initial claim online, by phone, or in person at a local
                                career center.




      1 Georgia residents who have only worked in another state must file UI claims in the state where they earned wages.
GDOL’s Unemployment Insurance Pandemic Response                                                                                                        4




                                Exhibit 2
                                Regular State UI Claims Process Typically Requires Two Determinations Prior to
                                Payment (Claimant Filings)1

                                                                                    Claimant files a claim.




                                                                                                                       GDOL mails UI Benefit




                                          Determination
                                                                                       Are past wages                (monetary) Determination


                                 Monetary
                                                              NO                         sufficient?
                                                                                                              YES    letter indicating potential
                                                                                                                          benefit amount.




                                    Benefits are not allowed.
                                                                                   Other potential issues
                                   GDOL notifies the claimant
                                    via mailed determination
                                                                                   identified (e.g., reason                       NO
                                                                                      for separation)?
                                              letter.




                                                                                             YES




                                          Determination
                                 Nonmonetary
                                                                                                                         Benefits allowed. GDOL
                                                                                      Claims examiner
                                                              NO                                                    notifies the claimant via mailed
                                                                                         investigates.        YES    letter. Payments released in
                                                                                      Claimant eligible?
                                                                                                                              24-48 hours.




                                                                                     Claimant certifies
                                                                                                                    Claimant continues to receive
                                                                                    weekly and submits
                                          Benefit payments stop.             NO        work search
                                                                                                              YES       weekly benefit amount
                                                                                                                              payment.
                                                                                      documentation




                                   1
                                       This is an overview for claims filed by individuals.

                                   Source: GDOL interviews and documents


                                                          •   Monetary Determination – A UI service specialist reviews each
                                                              claim to determine whether the claimant had sufficient wages to
                                                              qualify for benefits and to identify other potential eligibility issues.
                                                              Following initial review, GDOL mails the claimant a monetary
                                                              determination letter, known as the UI Benefits Determination letter,
                                                              which shows the claimant’s potential weekly benefit amount and the
                                                              maximum number of weeks benefits can be received. The letter does
                                                              not state whether the claimant has received final approval for benefits.
                                                              If eligibility issues are found during the initial review, the specialist
                                                              schedules a claims examiner review (nonmonetary determination).
GDOL’s Unemployment Insurance Pandemic Response                                                                          5




                                            The specialist may also contact the claimant for missing information
                                            or to address discrepancies in the application. The specialist also
                                            sends the claimant’s most recent employer a fact-finding
                                            questionnaire, which must be returned within 10 days.
                                        •   Nonmonetary Determination – After monetary review, a claims
                                            examiner conducts a nonmonetary determination if GDOL cannot
                                            verify separation is due to lack of work or if there are other eligibility
        Lack of work – A                    issues (e.g., a severance package from the most recent employer, the
        decrease in                         claimant’s unwillingness to accept a job similar to their prior job). The
        workload that                       claims examiner reviews documentation, such as the employer’s
        leads to a reduced                  completed questionnaire, and may call the claimant or employer for
        staffing level                      more information. The claims examiner issues nonmonetary
                                            determination letters that communicate the eligibility decision for
                                            each issue reviewed. If benefits are allowed, payments should be
                                            released 24 to 48 hours after the final determination is mailed.

                                To continue receiving benefit payments, claimants must certify eligibility weekly.
                                After issuing the monetary determination letter, GDOL notifies the claimant to
                                begin weekly certifications online or by phone. Claimants must certify for at least
                                one week before a claims examiner will conduct a nonmonetary determination.
                                During the certification, claimants attest that they have not refused suitable work
                                and report any wages earned. Claimants must also submit a form to confirm they
                                are available for and are actively searching for work. During the pandemic, the
                                work search requirement was waived, but the weekly certification was required.

                                Employer-Filed Claims
                                Employers may file the claim and certify weekly on the claimant’s behalf if the
                                claimant becomes partially unemployed (reduced hours or temporary layoff due
                                to lack of work). GDOL reported employer-filed claims generally require less staff
                                review because the employer has confirmed lack of work as the reason for the
                                claim. GDOL staff only need to ensure the employee has sufficient wages to
                                qualify for benefits. Partial unemployment benefits typically last up to six weeks
                                for a temporary layoff (the limit was extended during the pandemic). After the six
                                weeks, employers can convert the claim to an individual claim (discussed above),
                                and the employee is considered permanently laid off.

                                Beginning in March 2020, GDOL required employers to file partial
                                unemployment claims on behalf of their employees to speed claims processing.

                                Appeals
                                Claimants or employers not satisfied with GDOL’s determination can appeal
                                within 15 days of either determination. Appeals must be submitted in writing
                                online; by email, fax, or mail; or in person. There are three levels of appeals:
                                        •   Administrative Hearing Officer – The first appeal is heard by one
                                            or more GDOL administrative hearing officers. The officer considers
                                            testimony and evidence presented by each party. Hearings are
GDOL’s Unemployment Insurance Pandemic Response                                                                                                                      6




                                                                  generally held over the phone but may be conducted in person. After
                                                                  the hearing, the officer mails the claimant and employer the decision
                                                                  that affirms, reverses, or modifies the original determination.
                                                           •      Board of Review – Either party can appeal the hearing officer’s
                                                                  decision to GDOL’s board of review within 15 days of the decision
                                                                  notice. The board consists of three governor-appointed panel
                                                                  members. The board issues decisions based solely on evidence from
                                                                  the initial appeals hearing, but it may agree to hear oral arguments.
                                                           •      Judicial Appeal – Once all other appeals have been exhausted,
                                                                  either party can file a petition for judicial review by the superior court
                                                                  in the county where they were employed.

                                                 COVID-19 Federal UI Programs
                                                 Federal legislation and executive orders created new programs and benefits to
                                                 help mitigate the pandemic’s economic impact. As shown in Exhibit 3, multiple
                                                 programs were created or extended by law or a presidential order between March
                                                 2020 and March 2021.2 The Coronavirus Aid, Relief, and Economic Security
                                                 (CARES) Act created UI benefit programs (see Exhibit 4). In August 2020, a
                                                 presidential memorandum authorized a temporary supplement program to
                                                 replace one that had expired. The Continued Assistance Act (CAA) extended all
                                                 original federal programs for three months and created Mixed Earner
                                                 Unemployment Compensation (MEUC). Finally, the American Rescue Plan Act
                                                 (ARP) extended all federal pandemic programs from March 2021 until September
                                                 6, 2021. Georgia ended its participation in federal UI programs on June 27, 2021.

        Exhibit 3
        Timeline of Federal Programs and Georgia Implementation, March 2020 - June 2021
                                                                                                    December 27, 2020
                                March 27, 2020
                                                                                               CAA extends federal programs




            Federal Programs
                               CARES Act creates                          August 8, 2020
                                                                                                    and creates MEUC
                               three pandemic UI                     Presidential memorandum                             March 10, 2021
                                   programs                                    creates LWA                        ARP extends federal programs




            Georgia                              April 24, 2020
                                              First PUA payment

         Implementation
                                                                                                                                              June 27, 2021
                                                                                                                                              Georgia ends
                                                                                                                                          participation in federal
                                     April 11, 2020            June 11, 2020
                                                                                                                                                 programs
                                  First FPUC payment     First PEUC payment
            Source: Federal laws and agency documents



      2 The high unemployment rate also triggered the State Extended Benefits (SEB) program, an existing federal-state program

      activated in periods of high unemployment. The program provided an additional 13-20 weeks of UI benefits between weeks
      ending July 4, 2020, to February 6, 2021. Eligible claimants were moved to SEB after exhausting regular (state) UI and
      federal PEUC. During the pandemic, SEB was fully funded by the federal government.
GDOL’s Unemployment Insurance Pandemic Response                                                                                             7




                                   As shown in Exhibit 4, the programs created by the federal legislation and
                                   presidential memorandum served three purposes. Pandemic Unemployment
                                   Assistance (PUA) was a base benefit payment for individuals who do not typically
                                   qualify for regular state UI, such as contract and gig workers. Other programs
                                   extended the state UI for additional weeks or added a weekly supplement as long
                                   as the claimant was eligible for the base benefit program.

     Exhibit 4
     Federal Actions Created Temporary Pandemic Assistance UI Programs
                                                                                                         Weekly           Maximum # of
          Benefit Type                 Eligibility                           Process
                                                                                                         Benefit               Weeks

                                                     CARES Act (extended by CAA & ARP)
                                                                   Claimants first submitted an
        Pandemic                 Individuals who did not
                                                                    initial claim. After denial for
      Unemployment            otherwise qualify for state UI                                          Base benefit of        79 weeks2
                                                                     regular state UI, they were
        Assistance          (i.e., self-employed; gig workers;                                          $149 - $365      Ended June 27, 2021
                                                                  emailed a link to apply for PUA
          (PUA)1             1099 independent contractors)
                                                                              benefits.

        Pandemic                                                  Claimants were transferred into
                              Individuals who qualified but                                                              24 weeks added to
       Emergency                                                     PEUC automatically after          Extension of
                                                                                                                          regular UI benefit
                              were not currently eligible for
      Unemployment                                                 exhausting regular UI benefit      Regular UI claim
                                                                                                                               period
                              regular state UI and who had
      Compensation                                                weeks. In some cases, claimants         amount
         (PEUC)                    exhausted benefits                                                                    Ended June 27, 2021
                                                                      had to file a new claim.

         Federal                                                                                                            As long as UI
        Pandemic                                                       FPUC payments were
                                                                                                                            benefits are
                              Individuals who received any                                            Supplement of
      Unemployment                                                 automatically added to all UI
                                                                                                                              received3
                                   type of UI benefits                                                     $300   3
      Compensation                                                       benefit payments.
         (FPUC)                                                                                                          Ended June 27, 2021

                                                              Presidential Memorandum

           Lost Wages                                                Claimants attested to the
                                                                                                                              6 weeks
                               Individuals who received at                                            Supplement of
            Assistance                                            reason for their unemployment
                             least $100 in weekly UI benefits                                              $300          Ended Sept. 5, 2020
              (LWA)                                                 through the My UI portal.4

                                                Continued Assistance Act (extended by ARP)

       Mixed Earner           Same as regular UI if claimant
      Unemployment            also earned self-employment          Claimants filed on the My UI       Supplement of        Ended June 27,
      Compensation                       income                                 portal                     $100                 20215
          (MEUC)                (PUA recipients ineligible)
      1
       Although claimants could receive PUA and FPUC payments at the same time, they could not receive PUA payments at the same
      time as regular UI, PEUC, or MEUC payments.
      2
       The CARES Act set the PUA maximum benefit period at 39 weeks; the Continued Assistance Act extended the maximum benefit
      to 50 weeks, and the American Rescue Plan Act further extended it to 79 weeks.
      3
       The FPUC weekly benefit amount was initially $600 from April to July 2020 when the program expired. In January 2021, CAA
      reinstated FPUC and lowered the weekly benefit amount to $300.
      4
          Claimants receiving PUA benefits did not need to attest to their reason for unemployment.
      5
        MEUC was implemented October 29, 2021, and eligible claimants were paid retroactively for weeks ending January 2 through
      June 26, 2021.
      Source: Federal laws and agency documents
GDOL’s Unemployment Insurance Pandemic Response                                                                                                8




                                   GDOL Staffing
                                   Under the direction of the Commissioner of Labor, GDOL administers the UI
                                   program and also works to reduce and prevent unemployment. Through job
                                   training and placement, GDOL assists those seeking employment, as well as
                                   employers needing qualified workers.

                                   As shown in Exhibit 5, GDOL employed 1,080 staff across 13 divisions,3 with
                                   staff in two divisions working on UI in June 2021. The UI division had 318
                                   employees (29% of total staff) who process claims, collect employer taxes, and
                                   provide customer service to claimants and employers. The largest division,
                                   Statewide Operations, had 462 employees (43% of total staff), across 41 career
                                   centers throughout the state (see Appendix C for a map of career centers).
                                   Career center staff provide re-employment services, including services for
                                   veterans, and process UI claims. GDOL indicated Statewide Operations staff
                                   worked almost exclusively on UI claims during the pandemic. Across the two
                                   divisions, there are approximately 375 service specialists, 65 claims examiners,
                                   and 30 administrative hearing officers.

                            Exhibit 5
                            GDOL Employed 1,080 Staff Across 13 Divisions in June 2021


                                                                               Commissioner of
                                                                                  Labor




                                                                                Chief of Staff




                                                             Economic &
                                   Office of the General                       Unemployment
                                                              Workforce                           Statewide Operations   Workforce Solutions
                                          Counsel                                Insurance
                                                             Development                                462 staff             62 staff
                                           9 staff                                318 staff
                                                               7 staff



                                      Labor Market         Business Services                                                 Information
                                                                               Communications      Financial Services
                                       Information                Unit                                                       Technology
                                                                                  7 staff               39 staff
                                         25 staff               47 staff                                                       65 staff


                                                                               Training & Staff    Facilities & Admin
                                                           Human Resources
                                                                                Development             Services
                                                               11 staff
                                                                                    5 staff              21 staff




                                Source: Agency documents




      3
          Approximately 40 of the 1,080 staff are part-time.
GDOL’s Unemployment Insurance Pandemic Response                                                                                            9




                                 Financials
                                 As claims increased during the pandemic, the cost of UI administration increased
                                 as well. As shown in Exhibit 6, UI administration costs grew from $48.6 million
                                 in fiscal year 2019 to $111.9 million in fiscal year 2021, an increase of 130%.
                                 Personal services—which represent the majority of costs each year—increased by
                                 nearly 110%. The largest percentage increases were computer charges (due to
                                 software and equipment purchases) and contracts (primarily for temporary
                                 staffing). These amounts are not limited to the UI Program as identified in the
                                 Appropriations Act. They are associated with UI-related projects supported by
                                 other programs (e.g., administration program contains IT.)

             Exhibit 6
             UI Expenditures Increased Significantly During the Pandemic, FY 2019 - FY 2021
                                                              Administration of UI1
               Expenditures                      FY 2019                FY 2020                  FY 2021           Change FY19-21
               Personal Services                  $34,833,097             $44,010,442              $72,205,557            107%
               Regular Operating                   $4,997,679               $5,635,931             $16,482,967            230%
               Contracts                           $3,432,347              $4,399,945               $14,016,194           308%
               Real Estate Rentals                  $2,405,205              $2,341,094              $3,004,019              25%
               Telecommunications                   $1,046,326                $769,098               $1,246,952             19%
               Computer Charges                       $810,688               $1,456,514             $4,509,988             456%
               Equipment                              $391,299                $169,399                $466,846              19%
               Transfers                              $713,840                       $0                      $0             N/A
               Total Expenditures                  $48,630,481             $58,773,422             $111,932,523            130%


               Revenue2
               State Funds                          $8,325,897              $5,108,923             $4,996,338              -40%
               Federal Funds                       $39,726,119             $50,732,149            $109,315,274             175%
               Other Funds                                 $24              $1,557,209                      $28             14%
               Total Revenue                      $48,052,040              $57,398,281             $114,311,639            138%


                                                                      Benefits
                                                 FY 2019                FY 2020                  FY 2021               % of FY 21
               State UI Benefits3               $296,786,513            $2,030,576,394        $2,700,746,403               18%
               Federal Benefits4                  $5,528,676            $6,346,938,369        $11,899,972,557              82%
               Benefits Paid                     $302,315,189            $8,377,514,763       $14,600,718,960
               1
                 Administration expenditures include charges related to UI taxes. It also includes all charges to UI-related project
               codes, regardless of the GDOL unit. This typically includes charges within UI, Statewide Operations, and Department
               Administration.
               2
                 Revenue associated with the UI-related project codes.
               3
                 Regular (state) UI benefits. Georgia repaid $1.1 billion in federal advances for regular UI benefits with federal CARES
               Act funding.
               4
                 Includes federal UI programs, as well as State Extended Benefits (SEB), which were fully funded by the federal
               government during the pandemic. SEB costs are normally split between the federal and state governments.

               Source: TeamWorks Financials


                                 Federal funds comprised an increasing majority of revenue for UI administration,
                                 representing nearly all administration funding in fiscal year 2021. A small portion
                                 of administration costs are funded by state appropriations.
GDOL’s Unemployment Insurance Pandemic Response                                                                                10




                                UI benefit payments also increased exponentially—from approximately $302.3
                                million in fiscal year 2019 to approximately $14.6 billion in fiscal year 2021.
                                Georgia’s UI benefits are typically funded by state employer payroll taxes, which
                                are collected by GDOL and deposited into the state unemployment insurance
                                trust fund. With the creation of federal programs during the pandemic, federal
                                dollars became the primary source of payments. In fiscal year 2019, nearly all
                                benefits were paid using the state employer payroll taxes collected by GDOL. In
                                contrast, approximately 82% of benefit payments in fiscal year 2021 were
                                associated with federally funded programs—increasing from $5.5 million to
                                nearly $12 billion. Regular state benefits also increased significantly (from nearly
                                $300 million to $2.7 billion). Many of these benefits were ultimately paid with
                                federal dollars due to the trust fund being exhausted and federal advances of $1.1
                                billion being repaid by a portion of the state’s CARES Act funds.

                                Recent History of Funding
                                In the years preceding the pandemic, funding to GDOL had steadily declined
                                before increasing slightly in fiscal year 2020 and significantly in fiscal year 2021
                                (see Exhibit 7). As shown below, federal funding represents the vast majority of
                                GDOL funding and was the primary driver of variation over the period. Funding
                                to the UI program (not shown) followed a similar trend, with the change largely
                                driven by federal fund changes. Federal funding for UI program administration is
                                primarily driven by claim volume, so funding fell in the years after the Great
                                Recession when unemployment rates were lower. (As noted above, funding and
                                expenditures related to UI are not limited to the UI program.)

                                Exhibit 7
                                GDOL Funding Declined Prior to Pandemic, FY 2013 – FY 20211
                                            $200
                                                   $181

                                 Millions
                                                                                                                      $171
                                            $175
                                                                           Total
                                                                             $148Funding
                                            $150

                                            $125                                                     $114              $146
                                                   $129
                                            $100
                                                                           Federal
                                             $75                                                     $89

                                             $50
                                                    $30
                                                                  State
                                             $25                                                                      $14
                                                   Other
                                              $0
                                                   2013    2014     2015     2016    2017   2018     2019    2020     2021
                                      1 The fiscal year 2013 budget included a state fund transfer of $16.8 million from the

                                      Governor's Emergency Fund to pay interest on a loan to the Unemployment Trust
                                      Fund.
                                      Source: Budgetary Compliance Reports; Governor's Executive Order
GDOL’s Unemployment Insurance Pandemic Response                                                                 11




                                State funding to GDOL was more stable over much of the period. It exceeded $20
                                million in fiscal years 2013 and 2014 but was between $13.0 million and $14.6
                                million the last seven years. State funding to GDOL is supported by an
                                administrative assessment paid by employers (in addition to the payroll tax). The
                                funding is deposited into the state treasury and subject to appropriations two
                                years later. Appropriations in fiscal years 2015-2018 were $11.3 to $14.4 million
                                below the corresponding collections each year. In fiscal years 2019-2021, they
                                were $6.3 to $7.6 million below collections.
GDOL’s Unemployment Insurance Pandemic Response                                                                                      12




               Timeliness of Payments
               Finding 1:        Benefit payment delays were driven by unprecedented volume, limited
                                 automation of claims processing, and other factors.

                                 UI claimants experienced significant delays during the pandemic in Georgia and
                                 nationwide. Efforts to slow the spread of COVID-19 led to higher unemployment
                                 and an unprecedented surge in UI claim volume. New federal programs required
                                 state resources and added claimants not typically eligible for UI. In Georgia,
                                 limited automation and the requirement for significant staff involvement in
                                 claims processing also contributed to delays. While underlying causes could be
                                 identified, GDOL could not provide detailed claims data that would have allowed
                                 us to evaluate all factors that resulted in determination and payment delays.

                                 Many claimants experienced increasing wait times before receiving their first
                                 benefit payment during the pandemic.4 As shown in Exhibit 8, some claimants
                                 received their first payment within a few days of their initial eligibility, and half of
                                 the initial payments took less than three weeks in most periods reviewed.
                                 However, after the pandemic began, the last 5% of claims paid (as of September
                                 2021) took three to almost five months or more.5 Over the period reviewed,
                                 approximately 127,000 claimants’ first payment occurred more than 60 days
                                 after initial eligibility; approximately 37,400 claimants waited more than 120
                                 days.6 The longest payment delays may be due to appeals that overturn an initial
                                 denial. Additional details regarding first payment timeliness are shown in
                                 Appendix D.

                                 While first payment delays began with the surge of claims in April 2020,
                                 claimants experienced longer first payment delays starting in the third quarter of
                                 2020. GDOL staff indicated claims were more complex after the early surge,
                                 when most claims resulted from lack of work. Later claims were reportedly more
                                 likely to involve resignations or firings, which require a claims examiner’s review.
                                 It should be noted that the largest claim volume occurred in April-June 2020, so
                                 the final 5% of payments in this quarter represents approximately 35,300
                                 claimants with payment times greater than 94 days. Other quarters had
                                 significantly lower claim volume; therefore, the number of claimants waiting
                                 declined despite the longer time frames.




      4 As discussed in greater detail on pages 16 and 23, GDOL was unable to provide data that would allow us to evaluate the

      timeliness of all claims (paid and denied), the time between other milestone dates (e.g., filing, monetary and nonmonetary
      determinations), or the differences in performance across all UI programs. This analysis only includes paid claims and the
      difference between the ending date of the first week the claimant was eligible for benefits and the check date for the first
      payment.
      5 It should be noted that these payment times may grow longer as additional claims are paid and more appeals are heard.
      6 Our analysis excluded PUA claims with a first eligible week in the first quarter of 2020 because the CARES Act (passed

      March 27) allowed claims to be backdated to weeks ending February 2.
GDOL’s Unemployment Insurance Pandemic Response                                                                                    13




                                Exhibit 8
                                Half of Payments Took a Few Weeks, Others Took Several Months
                                January 2020 - June 2021
                                                                                                          95% of Pymts Made
                                     All UI Programs
                                                                                                          50% of Pymts Made
                                      Days from eligibility to first payment1
                                                                                                          First Pymt Made


                                                                       137             143
                                                                                                       124
                                                      94                                                               102

                                      55
                                       15              13               17              17               18              24

                                      Jan-Mar         Apr-Jun          July-Sep        Oct-Dec          Jan-Mar         Apr-Jun
                                       (357K)          (727K)           (91K)            (32K)            (31K)           (12K)

                                                   2020 Claims with Payments                         2021 Claims with Payments


                                   1 Difference between first week ending date for benefits and check date. Data as of September

                                   2021. Ongoing claims processing and appeals could lead to additional payments that would
                                   increase the 50% and 95% levels, especially for recent quarters.
                                   Source: GDOL benefit payment data



                                Time to first payment varied by program, as shown in Exhibit 9. For regular
                                (state) UI, half of first payments were made in less than three weeks throughout
                                the pandemic, and 95% of payments were made within two and four months,
                                depending on the quarter reviewed. Approximately 26,000 claimants (paid as of
                                September 2021) waited more than 120 days.

                                PUA payments generally took longer, in part because claimants had to first apply
                                and be denied for regular UI before applying for PUA. GDOL officials were
                                unable to explain the reason for the trend in 2020, though timeliness improved
                                over the course of the year. After the Continued Assistance Act was passed in
                                December 2020, PUA claimants were required to verify their identities and
                                provide documentation to support their pre-pandemic earnings, which likely
                                delayed initial payments for some claims filed in 2021. Approximately 15,100
                                claimants paid through September 2021 waited more than 120 days for their first
                                payment.
GDOL’s Unemployment Insurance Pandemic Response                                                                                                    14




  Exhibit 9
  PUA Payments Generally Took Longer than Regular UI, January 2020 - June 2021
                                                                                                                                     2
        Regular Unemployment Insurance (State)                                       Pandemic Unemployment Assistance
                                                                                                                                     95% of Pymts Made
        Days from eligibility to first payment1                                        220
                                                                                                                                     50% of Pymts Made
                                                                                                                                     First Pymt Made
                                             143                                                     150
                                130                       123                                                                 122
                                                                      102                                                                    100
                    66                                                                                             75
       55                                                                              59
                                                                        24                               23                                   20
       15            12          13           17            18                                                      17           6

       Jan-Mar      Apr-Jun      Jul-Sep     Oct-Dec       Jan-Mar      Apr-Jun        Apr-Jun           Jul-Sep   Oct-Dec     Jan-Mar       Apr-Jun
       (357K)        (639K)       (81K)        (31K)        (30K)        (14K)           (96K)            (11K)     (500)        (7K)         (400)

                 2020 Claims with Payments                  2021 Claims with                 2020 Claims with Payments       2021 Claims with Payments
                                                                 Payments
     1 Difference between first week ending date for benefits and check date. Data as of September 2021. Ongoing claims processing and appeals could

     lead to additional payments that would increase the 50% and 95% levels, especially for recent quarters.
     2 PUA effective dates in the first quarter were excluded because the CARES Act (passed March 27) allowed these claims to be backdated,, so time

     between initial eligibility and first payment could be significantly longer than processing time.
     Source: GDOL benefit payment data



                                      Delayed benefit payments caused financial hardships and frustration for many
                                      claimants. Media reports and thousands of web inquiry comments showed that
                                      claimants risked eviction, foreclosure, and food insecurity. Others reported that
                                      they were unable to pay utility bills or afford necessities. The frequency of
                                      repeated calls and inquiries shows the desperation of some claimants. More than
                                      225,000 claimants sent multiple web inquiries between January 2020 and May
                                      2021; almost 11,000 sent more than 10 inquiries. Between January and May
                                      2020, nearly 270,000 people placed 10 or more calls to GDOL.

                                      Our review identified several issues contributing to the delays in processing
                                      claims and issuing benefit payments. Additional details and areas for
                                      improvement are discussed throughout the report.

                                                •      Unprecedented claim volume – The economic shutdowns in early
                                                       2020 led to historically high UI claims in an unusually short time.
                                                       New UI claims increased to approximately 716,000 in April,7 40 times
                                                       the 17,000 new claims filed in February 2020. The claim volume in
                                                       April alone was more than three times the number of claims in all of
                                                       2019 (approximately 218,000).
                                                       During a typical recession, unemployment rates rise over several
                                                       months, giving state labor departments time to respond. However, the
                                                       suddenness of the pandemic caused claims to surge more quickly,
                                                       straining states’ unemployment processing systems and leading to

      7 We estimated new initial claim volume during the pandemic, using unduplicated counts from GDOL claim data. GDOL’s

      reporting included approximately 1.2 million duplicate claims and 1.4 million additional claims during the pandemic, which
      would have involved a significantly lower level of review.
GDOL’s Unemployment Insurance Pandemic Response                                                                                      15




                                             delays. Exhibit 10 shows monthly volume for new initial UI claims
                                             for two time periods—the months around both the Great Recession
                                             (began December 2007) and the pandemic recession (began February
                                             2020). During the pandemic, unemployment claims spiked over a
                                             two-month period and then remained elevated for more than a year.
                                             In contrast, claims rose gradually over 14 months during the Great
                                             Recession, peaking at approximately 76,000 in January 2009.

                                     Exhibit 10
                                     New UI Claims Surged Sharply During the Pandemic
                                                        Pandemic Peak
                                                              716K
                                                             (2020)




                                                                                                      Great Recession Peak
                                                                                                                 76K
                                                                                                                (2009)




                                            January           April             July          October          January       April
                                       Source: U.S. DOL Employment and Training Administration and GDOL claims data




                                        •    Staff-intensive claims process – Manual processes hindered
                                             GDOL’s management of the claim surge. GDOL’s system for
                                             processing claims requires a high level of staff involvement, with
                                             limited automation, as discussed on page 28. Additionally, certain
                                             eligibility decisions (e.g., assessing a claimant’s reason for quitting)
                                             must be made by an employee and cannot be automated. As a result,
                                             GDOL needed to significantly increase UI staff to address the claim
                                             surge. GDOL shifted many non-UI staff to claims processing and hired
                                             contractors to provide support, as discussed on page 35. GDOL did
                                             not significantly increase the number of agency employees, partly due
                                             to the challenges of hiring and retaining employees.
                                        •    New federal programs – Implementing several new federal
                                             pandemic programs took time and required a redirection of staff
                                             resources for creation of policies, training, or IT requirements. To
                                             begin implementation, GDOL needed guidance from U.S. DOL, which
                                             typically took one to two weeks to issue. GDOL’s UI and IT staff then
                                             worked to develop new programming to ensure adherence to federal
                                             guidance. Additional programming changes were necessary later as
GDOL’s Unemployment Insurance Pandemic Response                                                                            16




                                GDOL could not provide data for a comprehensive evaluation
        While the broad underlying causes of delays are known, GDOL could not provide the data necessary for us to
        evaluate the extent to which specific claim types or agency processes contributed to delays. We were told that
        our original request for comprehensive data on all claims submitted would take several weeks for each program,
        or a total of three to four months. Given the report timeline, we agreed to use a smaller data set GDOL was
        providing to the U.S. DOL Inspector General, despite it allowing only a more limited analysis. However, the data
        GDOL provided contained errors such as blank fields and claims paid before they were filed (as discussed on
        page 23). Any analysis based on this data would not have accurately represented processing times.
        Ultimately, we were limited to the payment data GDOL provided to our financial auditors. This data allows an
        analysis of the time to first payment by program but does not permit an analysis of pending claims, denied claims,
        the characteristics of claims processed more slowly, or the types of claims most frequently appealed.
        We also considered using data that GDOL regularly reports to U.S. DOL to evaluate the timeliness of claims
        processing compared to other states. However, as discussed on pages 20 and 22, this reporting is limited and
        had reliability issues, such as including duplicate claims and underreporting the number of appeals filed. Other
        states also experienced data issues, making comparisons between states problematic.


                                            Congress passed subsequent legislation and U.S. DOL issued new or
                                            revised guidance. Staff also needed training on the new programs to
                                            process claims and answer claimant questions. GDOL reported that
                                            PUA was especially difficult to implement because it covered groups
                                            not typically eligible for UI in Georgia (e.g., self-employed, gig
                                            workers). PUA claims were also prone to delays because claimants had
                                            to file for regular state UI and be denied before filing for PUA.
                                        •   Mistakes by claimants and employers – Mistakes during the
                                            application and weekly certification processes delayed processing,
                                            caused missed payments, and likely led to denials. The claim surge
                                            included many first-time filers who were unfamiliar with UI, and
                                            errors were more likely because claimants could not reach GDOL with
                                            questions. As discussed on page 43, claimants frequently
                                            misunderstand communications from GDOL, including application
                                            questions and determination letters. Additionally, GDOL required
                                            employers to take responsibility for filing and certifying partial
                                            unemployment for their workers, and many were not equipped to do
                                            so (discussed on page 51).
                                        •   Increased fraud – Fraudulent claims increased during the
                                            pandemic nationwide, and some legitimate claims were delayed or
                                            denied as a result. News reports indicated that organized crime
                                            targeted UI programs using stolen identities to file fraudulent claims.
                                            When individuals later attempted to file a legitimate claim, the system
                                            would identify the earlier claim using their identity, leading to denial
                                            or delays while the issue was addressed. GDOL employs a number of
                                            controls in an attempt to prevent fraud, but these controls may also
                                            catch unintended mistakes. For example, a claimant may enter their
                                            Social Security Number incorrectly, causing their claim to be flagged,
                                            requiring manual staff review and additional claimant action.
GDOL’s Unemployment Insurance Pandemic Response                                                                     17




                                        •   Inadequate customer service – Unanswered inquiries increased
                                            GDOL’s workload and led to payment delays. Career center staff split
                                            time between processing claims and answering inquiries during the
                                            pandemic, and staff from other divisions also provided assistance.
                                            However, GDOL has only a small unit (16 staff in April 2021) that
                                            exclusively answers phone calls. As discussed on page 56, many
                                            claimants were unable to reach GDOL staff for information on their
                                            claim status. As a result, some claimants filed duplicate claims or
                                            invalid appeals in an attempt to obtain benefits, creating more work
                                            for GDOL staff. Other claimants were unable to reach GDOL to
                                            provide information necessary to process their claims, resulting in
                                            delays or incorrectly denied claims.

                                    Agency Response: GDOL generally agreed with the factors that
                                    contributed to delays, though it emphasized several and disagreed that
                                    automation was a significant factor.
                                     GDOL considered the primary factors to be unprecedented claim volume,
                                    new and changing federal programs, and inadequate administrative
                                    funding between the Great Recession and the pandemic.
                                        •   GDOL noted the increase in claims was “unprecedented and
                                            unforeseeable,” indicating it had paid out more in UI benefits during
                                            the pandemic than in its entire 84-year history.
                                        •   GDOL stated that Congress created “poorly designed programs” it
                                            knew states would struggle to implement, especially PUA, which
                                            significantly increased both claims and identity fraud. Additionally,
                                            U.S. DOL “was slow in issuing guidance and repeatedly changed it,
                                            causing delays to state implementation.”
                                        •   GDOL noted the negative impact of insufficient funding prior to the
                                            recession. It stated that “Commissioner Butler repeatedly warned the
                                            legislature that if the full administrative assessment was not restored
                                            to match the amounts being collected, the next recession would have
                                            a devastating impact on Georgia. The state repeatedly ignored
                                            Commissioner Butler’s many requests for additional funding.”
                                    GDOL said that “increased fraud, mistakes by claimants & employers, and
                                    staffing challenges also contributed to delays.” It indicated that claimants
                                    who submitted all the necessary information in their application “generally
                                    saw their claims processed promptly.” It pointed to identity verification
                                    requirements to address PUA fraud and noted that if claimants “delayed in
                                    verifying their identities, payments could not be released.” Additionally, it
                                    noted the difficulty of maintaining adequate staffing with insufficient
                                    funding.
                                    GDOL disagreed that lack of automation was a primary cause for delays. It
                                    argued that it had “utilized automation where permitted” by U.S. DOL and
                                    noted that electronic filing in bulk by employers was an innovation
                                    recognized as a success by U.S. DOL. It stated that a majority of claims were
                                    automated in early 2020 due to the nature of the job separations.
                                    Furthermore, it contended that states with more automation than Georgia
GDOL’s Unemployment Insurance Pandemic Response                                                                      18




                                    did not have better results. However, it did agree that “opportunities exist
                                    for increased automation of claims processes.”
                                            Auditor’s Response: While GDOL stated that it had already
                                            automated processes where permitted, it also acknowledged
                                            additional automation was in place in other states and was planned
                                            in Georgia. As discussed in the report, we identified tasks that could
                                            be automated to reduce the need for staff involvement during initial
                                            processing, which would have helped GDOL handle the pandemic
                                            claim surge with fewer staff. Several years ago, Minnesota
                                            determined that increasing staffing to deal with its significant
                                            seasonal fluctuations in UI claims was impractical. It increased
                                            automation of the UI process, allowing easier scale up for higher
                                            volume, and consistently ranks highly in first payment timeliness.
                                    Agency Response: GDOL contended that the data provided to the audit
                                    team and publicly available data should have allowed for a thorough
                                    evaluation of timeliness. It also stated that the audit work duplicated U.S.
                                    DOL’s auditing efforts and the data requests were overly burdensome. It
                                    suggested that the audit team’s request demonstrated a lack of
                                    understanding of complex process because claims data does not fit into a
                                    neat chronology easily produced and analyzed in the manner desired.
                                    Regarding the reported problems with claims data, GDOL said that U.S.
                                    DOL OIG did not indicate there were problems with the data.
                                            Auditor’s Response: As noted in the report, we identified
                                            inconsistencies and inaccuracies in GDOL’s claims data and federal
                                            reporting that prevented us from using these sources to report on
                                            timeliness. Results based on inaccurate data would not have
                                            presented an accurate portrayal of timeliness. When we reviewed a
                                            sample of claims with senior GDOL staff, the dates and amounts
                                            shown in the data set did not always reflect what was shown in the
                                            claim record, and the official was unable to explain the information
                                            in the dataset.
                                            After discussing the time needed to fulfill our initial data request and
                                            the types of analyses we wanted to perform, GDOL proposed that we
                                            utilize data being provided to the U.S. DOL OIG for the timeliness
                                            analysis. This dataset, recommended by GDOL, was not reliable for
                                            assessing timeliness. Months after suggesting the dataset (and after
                                            receiving a report draft), GDOL determined that the attempted use of
                                            the data it provided signified the auditors’ lack of understanding of
                                            the program’s complexities.
                                            Finally, we spoke with the U.S. DOL OIG after receiving GDOL’s
                                            response and determined that the data GDOL provided to the audit
                                            team was not used to analyze timeliness.
                                    Agency Response: GDOL also stated the audit timeliness metrics used in
                                    the report were “novel” and that they reflected DOAA auditors’ lack of
                                    understanding about complex UI processes. GDOL believes that the analysis
                                    also does not appropriately distinguish appeals that reverse earlier
                                    disqualifications from other paid claims and that the limitations of the
                                    analysis are not explained.
GDOL’s Unemployment Insurance Pandemic Response                                                                      19




                                            Auditor’s Response: Without claims data to assess timeliness, we
                                            used the payment data as a last resort to answer the questions posed
                                            by the Georgia House and Senate Appropriations Committees. The
                                            data reported is simply the time between the first week the claimant
                                            was eligible for benefits and the first payment, using a similar
                                            calculation to what is used for the federal first-payment timeliness
                                            measure GDOL referenced in its response (see below), and using
                                            data that GDOL provides to the financial auditors every year. When
                                            we notified GDOL that we planned to use this data to report on
                                            timeliness, as well as the method and data points we planned to use,
                                            it did not express concerns.
                                    Agency Response: Finally, GDOL stated the audit should have used
                                    federal timeliness standards and compared Georgia to other states using the
                                    data states reported to U.S. DOL, as other auditors had done. It pointed to
                                    U.S. DOL first-payment timeliness measures showing that during the
                                    pandemic, Georgia frequently ranked in the top three of eight states in the
                                    South region and in the top three of ten large states.
                                            Auditor’s Response: As noted in the finding, we identified issues
                                            with the reliability of key data points in the U.S. DOL reports that
                                            prevented us from using it for analysis. More importantly, auditors
                                            frequently obtain the underlying data to ensure that agencies’
                                            reports are accurate.
                                            Additionally, it should be noted that federal timeliness reporting
                                            reflects only regular UI (no federal programs) and that Georgia
                                            failed validation testing for payment data. Additionally, other states
                                            experienced similar data reliability issues during the pandemic,
                                            making such comparisons problematic. While some audits may
                                            include these comparisons, we spoke with performance auditors in
                                            other states who had reached the same conclusion and avoided
                                            reporting on the federal data for this reason.
GDOL’s Unemployment Insurance Pandemic Response                                                                                   20




               Management Information and Planning
               Finding 2:        GDOL lacks information that would assist UI program management with
                                 planning and decision making.

                                 GDOL needs additional and reliable information to better manage the UI claims
                                 and customer service processes. Despite the UI program’s size and complexity,
                                 management primarily relies on informal information gathering (rather than
                                 data-driven reporting), and available data may be inaccurate. During the
                                 pandemic, additional information regarding claim workload status, processing
                                 challenges, inquiry volume, and the reasons for claimants’ inquiries would have
                                 better informed GDOL’s staffing and communication strategies.

                                 Timely and accurate analysis of program data can help management evaluate
                                 performance, identify areas for improvement, and set priorities. With the right
                                 information, management can better understand the issues the program faces
                                 and the impacts of options being considered, which improves decision making.

                                 Instead of using data-driven reports, GDOL often relies on informal processes
                                 and discussions for decision making. The agency does not have sufficient
                                 reporting in place, and new reports cannot be provided in a timely manner.
                                 Additionally, in some available reports, key data are not sufficiently reliable for
                                 management use.

                                 Limited Information Available for Program Management
                                 GDOL needs additional information to systematically manage its claims process
                                 and customer service operations. Informal information gathering may alert
                                 management to some issues that staff have observed, but other problems may be
                                 overlooked.

                                          •   Claims – GDOL’s claims management system contains dozens of
                                              data points that could provide valuable information for UI
                                              management, but this data is not fully utilized. Regular reporting on
                                              UI claims is limited to summary data required by U.S. DOL, such as
                                              claim volume and first payment timeliness.8 These reports do not
                                              provide other information that would be useful for UI management.
                                              For example, the reports do not include data on staff productivity, the
                                              timeliness of monetary determinations, or performance measures for
                                              programs other than state UI (e.g., PUA, PEUC). The reports also omit
                                              claim characteristics (e. g., non-English speakers, employer-filed
                                              versus claimant-filed) that could impact denial rates or processing
                                              times.
                                              Up-to-date information is difficult to obtain. UI management can
                                              request reports from IT when they identify an issue. However, GDOL


      8 GDOL also has real-time data about the total number of pending claims, but this does not provide the type of reporting that

      can be used for trend analysis or process evaluations.
GDOL’s Unemployment Insurance Pandemic Response                                                                                   21




                                                IT stated it takes a minimum of four to six weeks to generate the
                                                reports, which limits their usefulness.
                                           •    Customer service – While analysis of performance trends and
                                                workloads could help improve customer service, GDOL does not use
                                                regular reporting or performance metrics to manage its operations.
                                                Currently, staff may obtain reports on the number of calls answered or
                                                sent to voice mail, but no reporting is currently available on common
                                                metrics, such as total volume, answer rate, or caller hold times.
                                                Finally, GDOL does not track performance information related to web
                                                inquiries, emails, or voice mails, including whether or how quickly
                                                staff responded. Without this information, GDOL cannot properly
                                                evaluate its responsiveness to claimant inquiries.
                                                GDOL also does not track why many individuals contact the agency,
                                                which could help improve its communications. Currently, no data is
                                                collected for why claimants call career centers or send emails. Broad
                                                topics are collected for a limited number of calls, but these fields are
                                                either not required or not reliable for analysis.9 With more and better
                                                data, GDOL could improve the information it provides to claimants
                                                and staff. For example, claimant questions could suggest new
                                                information for the website’s Frequently Asked Questions or
                                                additional clarification to include in letters or application questions.
                                                (GDOL staff indicated they did alter the FAQs using data from a
                                                chatbot added during the pandemic.) These types of changes can
                                                reduce the need for claimants to request assistance. GDOL could also
                                                use this data to adjust training and ensure staff have the information
                                                they need to help claimants.

                                  Additional management information would help GDOL better plan for future
                                  claim surges. As discussed on page 24, a recession plan outlines predetermined
                                  strategies to quickly implement when UI claims increase. Better information and
                                  ongoing analysis could help GDOL identify whether changes are needed and
                                  which strategies to implement. For example, GDOL needs additional staff when
                                  claim volume rises, and productivity information would help management
                                  understand how many claims and inquiries staff in each role can handle. This
                                  would inform decisions about whether to hire new staff, shift work to other staff,
                                  or use contractors for particular roles (e.g., claims processing, customer service).

                                  Current Information Not Always Reliable
                                  To improve decision making, management information must be based on
                                  accurate and complete data. Some data currently available from GDOL is not
                                  reliable enough to be used by management. We attempted to use two sources—
                                  GDOL’s reports to U.S. DOL and data extracts GDOL produced for this special
                                  examination—to answer questions about claims processing timeliness and
                                  responsiveness to claimants. However, the issues described below prevented us

      9 The central customer service line had general topic data for 5% of calls. The dynamic scheduler appointment system also

      included general topics, but staff indicated the fields were not reliable.
GDOL’s Unemployment Insurance Pandemic Response                                                                                 22




                                from completing the planned analyses and indicate UI management may not
                                always receive accurate information.

                                         •   Inaccurate reporting to U.S. DOL during the pandemic – Key
                                             data points in GDOL’s federal reporting were inaccurate, including the
                                             number of claims and appeals filed. As a result, neither GDOL nor the
                                             public had an accurate picture of the pandemic workload and
                                             resulting backlogs. The system issues that led to the discrepancies
                                             were not caused by the pandemic, but they were likely exacerbated by
                                             the increased claim volume. It should be noted that GDOL failed 8 of
                                             11 data validation tests for UI benefits that were required by U.S. DOL
                                             in 2021. Many states also failed validation tests during the pandemic.
                                                  o   Claims filed – GDOL reported significantly higher claims
                                                      filed than it actually received. Federal reporting shows
                                                      approximately 3.9 million initial claims were filed during the
                                                      pandemic but only 2.7 million went through initial processing,
                                                      a difference of 1.2 million (40%). Staff indicated the difference
                                                      occurred because the reporting system counted duplicate
                                                      claims as new claims. Pandemic conditions likely increased the
                                                      number of duplicates due to employer-filed claims (e.g.,
                                                      multiple employers filing for one person) and processing
                                                      delays that led claimants to file multiple claims.10
                                                  o   Pending appeals – GDOL reported significantly fewer
                                                      pending appeals than the actual number awaiting decisions.
                                                      Federal reporting showed 2,393 appeals pending in October
                                                      2021; however, GDOL staff indicated there were
                                                      approximately 61,000 appeals awaiting processing at that
                                                      time, a difference of approximately 59,000 (96%).11 Staff
                                                      indicated that the remaining appeals had been received but
                                                      were not yet processed and entered into the system. The
                                                      pandemic volume increased the number of appeals, which
                                                      meant a large number had not yet been entered.
                                                  o   Other data – Other data in the federal reports also showed
                                                      discrepancies, indicating underlying problems. For example,
                                                      PUA reporting showed that less than 1% of claimants found
                                                      eligible in the fall of 2020 received a first payment, which staff
                                                      indicated was not accurate. Reporting for state extended
                                                      benefits and federal PEUC show appeal decisions were made
                                                      but no appeals were filed. Data quality issues also affected the
                                                      performance measure for nonmonetary determination



      10 An analysis performed in July 2020 by the University of Tennessee Boyd Center for Business and Economic Research

      noted that “industry-level claims data from Georgia suggests that 163% of leisure and hospitality workers have filed initial
      claims since the pandemic began.” (Understanding the Accuracy of Unemployment Insurance Data, by Marianne Wanamaker
      and Evan Newell)
      11 Some portion of these will be determined to be invalid, meaning the claimant did not yet have a determination to appeal.
GDOL’s Unemployment Insurance Pandemic Response                                                                     23




                                                      timeliness. This issue was included in GDOL’s corrective
                                                      action plan prior to the pandemic.
                                        •    Inaccurate data provided for the special examination –
                                             Problems with data GDOL produced for the special examination
                                             indicate there would likely be problems with ad hoc reports produced
                                             for UI management.
                                                  o   Claims data – GDOL had difficulty providing complete and
                                                      accurate information for the audit team to evaluate the
                                                      timeliness of claims processing and payments. As discussed on
                                                      page 16, we had to significantly reduce our data request to
                                                      obtain claims data within the necessary time frame. When the
                                                      dataset was obtained, problems included missing records,
                                                      blank filing dates, and inaccurate benefit amounts.
                                                      Additionally, thousands of records had illogical date orders—
                                                      for example, first payment dates that occurred before the
                                                      claimant filed or before GDOL staff had reviewed the claim.
                                                      (This does not necessarily indicate problems with claims
                                                      processing but with the ability to pull system information into
                                                      reports.) Over the next three months, GDOL provided revised
                                                      data three more times. While these data sets improved, they
                                                      still exhibited similar problems.
                                                  o   Customer service data – Some data related to claimant
                                                      communications also suggested reliability problems. For
                                                      example, the call data showed calls that appear to be answered
                                                      in the middle of night or that lasted a few seconds. GDOL
                                                      stated the “data cannot be assumed to be accurate or
                                                      complete.” Additionally, while the Dynamic Scheduler data
                                                      included general call topics, staff indicated these fields were
                                                      not reliable.

                                    RECOMMENDATION
                                            1.    To manage the UI program more systematically, GDOL should
                                                  collect additional information and ensure all information is
                                                  reliable and accurate.

                                    Agency Response: “GDOL agrees that having more information available
                                    during the pandemic would have greatly assisted UI management with
                                    planning and decision making” but indicated that reduced federal and state
                                    funding after the Great Recession had prevented expansion of system
                                    reporting capabilities. It noted that, while federal funding declined over the
                                    past decade, it had applied for federal administrative grant money to make
                                    UI system improvements. GDOL further declared that the state had diverted
                                    $100 million in administrative assessment funding from the agency between
                                    2010 and 2020, which it contends is inconsistent with O.C.G.A. 34-8-182(b).
                                    It stated that the additional funds would have resulted in fewer deferred
                                    improvements to reporting and information systems, as well as additional
GDOL’s Unemployment Insurance Pandemic Response                                                                     24




                                    staffing. GDOL indicated that the agency consistently asked for the full
                                    assessment collections to be provided but that the commissioner’s “requests
                                    and warnings were consistently ignored” by the legislature. Finally, GDOL
                                    stated that the special examination ignores the loss of federal and state
                                    funding as a key factor in the pandemic response.
                                    Additionally, GDOL agreed that available data is limited to the data and
                                    metrics required by U.S. DOL but disagreed that additional data and
                                    metrics noted in the finding, such as claimant characteristics and timeliness
                                    of monetary determinations, were necessary. It stated claimant
                                    characteristics (e.g., non-English speakers) are not relevant for reporting
                                    because they play no role in processing times. GDOL added that decisions
                                    are “informed by leaders with decades of experience analyzing workforce
                                    and economic data and trends.”
                                        Auditor’s Response: During the audit, GDOL officials made various
                                        assertions but could not provide requested data to allow for evaluation
                                        of these statements (e.g., delays caused by incomplete applications or
                                        missing wages). These assertions may be accurate, but as the finding
                                        points out, additional data can provide a better understanding of the
                                        issues to facilitate process improvement and resource prioritization. For
                                        claims that take longer to process than others, detailed claim data may
                                        indicate the characteristics or factors impacting timeliness.

                                    Recommendation: GDOL noted that it is currently using federal
                                    pandemic grant funding “to upgrade information and reporting systems”
                                    but some improvements would require ongoing funding (e.g., licensing fees).
                                    These upgrades will include “a customer relations management system and
                                    a virtual agent to improve customer inquiry tracking and resolution as well
                                    as enhanced reporting and monitoring.”



              Finding 3:        A documented plan would help GDOL better manage future increases in
                                claim volume.

                                While the pandemic led to an unprecedented increase in claims, UI programs
                                regularly experience fluctuations due to economic expansions and contractions.
                                GDOL does not have a documented plan to address such fluctuations. Developing
                                a plan would help GDOL prepare for future claim surges, reduce the need to
                                quickly develop strategies during a crisis, and ensure that lessons learned are
                                available for future GDOL managers.

                                The cyclical nature of UI requires proactive planning to address changing claim
                                volume. The UI program is closely tied to economic conditions—unemployment
                                claims are expected to fall during expansions and rise during recessions. The
                                changing claim volume necessitates different approaches based on varying
                                economic conditions. In particular, the increased workload during recessions that
                                occur every several years is likely to strain an unemployment agency’s capacity
                                without proper planning.

                                GDOL does not have a documented recession plan for expected increases in claim
                                volume. Because the pandemic claim surge was unprecedented in its size and
GDOL’s Unemployment Insurance Pandemic Response                                                                    25




                                speed, it is unrealistic to expect that a plan would have prevented all delays.
                                However, a predetermined plan requires evaluating and selecting strategies that
                                can be more quickly implemented once conditions warrant. GDOL staff indicated
                                that advance planning is not possible because the federal government creates new
                                programs for each recession. While new applications and training cannot be
                                developed before new federal programs are passed, GDOL can prepare for
                                operational changes that may be necessary for any recession or claim surge. For
                                example, a plan could outline when and how to ensure sufficient phone
                                capacity—at the beginning of the pandemic, 78% of calls (approximately 15.1
                                million) were dropped before May 2020, when GDOL indicated they increased
                                call capacity.

                                Without a formal plan, GDOL had to rapidly develop strategies to address the
                                claim surge, which prevented comprehensive evaluation of the options. UI staff
                                indicated they did not have time to conduct analyses or research other states’
                                strategies, instead relying on informal decision making and limited formal data.
                                For example, GDOL could not significantly increase its ability to respond to
                                claimant calls without using individuals that would otherwise assist with claims
                                processing. Many months after the initial claims surge, GDOL modified its
                                training program to allow new employees to begin answering claimant calls.

                                Lessons learned during the pandemic should be incorporated into the recession
                                plan. These lessons could include:

                                        •   Documenting Effective Strategies – The plan should document
                                            strategies GDOL used that were effective and specify preparation or
                                            improvements that should be made. For example, GDOL was able to
                                            incorporate additional staff quickly by hiring prior UI employees (i.e.,
                                            retirees) and using cross-trained career center employees who
                                            typically worked on re-employment services. GDOL can prepare to use
                                            these strategies by ensuring the necessary support (e.g., refresher
                                            training) is already in place and updated regularly.
                                        •   Identifying Areas for Improvement – A review of pandemic
                                            strategies should also identify areas for improvement. For example,
                                            employer-filed claims helped speed claims processing but led to
                                            problems for some claimants, as discussed on page 51. GDOL should
                                            determine the best methods to address these issues and incorporate
                                            those methods into its planning.
                                        •   Researching Alternative Strategies – As noted throughout the
                                            report, other states took different approaches to the claims surge or
                                            used different methods for regular operations. Agency staff may also
                                            provide alternatives for consideration. GDOL should gather
                                            information from other states and its staff and evaluate whether other
                                            strategies may be effective in Georgia.
GDOL’s Unemployment Insurance Pandemic Response                                                                           26




                                                  UI Recession Plan Components
        A recession plan should provide guidance to agency staff on how to address challenges that typically occur during
        a recession. An effective plan should consider the following:

            •   Areas affected – Recession workloads may require the agency to make changes in multiple areas,
                including staffing, technology, communications, and policies.
            •   Regular updates – Management should review the plan on a regular basis (e.g., quarterly) and edit the
                plan as needed or prepare for operational changes based on economic conditions.
            •   Task assignments – To ensure clarity and speed in implementation, tasks should be assigned to specific
                roles. For example, an IT project manager may be tasked with assessing phone capacity.
            •   Economic indicators – Monitoring economic indicators can help detect an approaching recession and
                trigger early action. Staff should review leading indicators, such as durable goods orders and consumer
                purchases, as well as labor market information, such as layoffs and UI claim volume.
            •   Decision parameters – Data can help guide agency actions. For example, the plan could recommend
                when to begin the hiring process and how many staff to hire based on pre-determined thresholds in
                economic indicators and claim volume.
            •   Preparation – Some actions should occur before the recession begins. For example, human resources
                may maintain regular contact with law schools so that it can quickly reach out to identify students who
                could help with appeals.
            •   Task prioritization – Management should identify less critical tasks that can be paused during a crisis and
                then develop a process for stopping, and later restarting, these tasks.


                                A documented recession plan would also help reduce knowledge loss resulting
                                from staff turnover. Current UI management has significant experience in the
                                nuances of a complex program, and they gained additional, valuable insight
                                during the pandemic. Incorporating current management’s experience into a
                                formal plan would allow them to transfer this knowledge to future management.
                                This element of succession planning is particularly important due to UI’s staffing
                                challenges, which include the percentage of employees eligible to retire
                                (approximately 25%) and high turnover in some positions.

                                As discussed on page 20, GDOL must collect additional information to allow for
                                more analysis and to manage the program systematically. This information
                                should be used to help develop a recession plan.


                                    RECOMMENDATION
                                           1.     To prepare for future increases in claim volume, GDOL should
                                                  create a formal recession plan that considers lessons learned
                                                  during the pandemic.

                                    Agency Response: “GDOL agrees that compiling a list of ‘lessons learned’
                                    could assist in agency planning.” However, it did not believe that any
                                    planning would have prepared GDOL for the pandemic. Furthermore, it
                                    stated that it “implemented several innovative strategies in record timing
                                    during the pandemic to increase response time.”
GDOL’s Unemployment Insurance Pandemic Response                                                                   27




                                    GDOL said the state “should also implement a statewide pandemic/recession
                                    plan” that includes reallocating staff between agencies. It stated that lessons
                                    have been learned and will be applied to future plans. It noted that
                                    recessions are typically more gradual and that events such as the pandemic
                                    “are impossible to predict and plan for by their very nature.”
                                    GDOL stated that it made numerous improvements over the course of the
                                    pandemic to better serve customers. It pointed to employer-filed claims,
                                    waiving in-person visits, automated ID verification, waiving of work search
                                    requirements, deployment of the claimant portal, and use of virtual agents
                                    and chat bots. It also noted that due to “timely system capacity upgrades,”
                                    the GDOL system did not crash when those of many other states did.
                                    GDOL also noted that, in recent preliminary audit findings, a U.S. DOL OIG
                                    contractor concluded that it was prepared for a future similar situation.
                                    Recommendation: “GDOL agrees that a formal recession plan is a good
                                    idea, but it would not have prepared GDOL for this pandemic and the
                                    unforeseeable volume of claims.” With recent and planned improvements,
                                    “GDOL will be more prepared to respond to a future recession.”
GDOL’s Unemployment Insurance Pandemic Response                                                                                   28




              IT System
              Finding 4:               While GDOL has made key updates to its claims management system, the
                                       system could better facilitate claims processing and communication with
                                       claimants.

                                       GDOL’s claims management system lacks features of more modern UI systems—
                                       more efficient claims processing, automated communication with claimants, and
                                       better data reporting capabilities. These features reduce the amount of staff
                                       needed and can help direct management decisions, which is especially important
                                       when claim volume rapidly increases.

                                       GDOL’s claims management system was initially created in the 1970s. The agency
                                       has incrementally added features to benefit both staff and claimants. In contrast
                                       to a full system replacement chosen by some states, an incremental approach
                                       results in smaller improvements over time without a large change to UI
                                       operations. While GDOL also has more control over short-term expenditures, the
                                       state does not benefit from some of the features of a fully modernized system. As
                                       shown in Exhibit 11, GDOL’s system does not yet provide many of the benefits
                                       expected from a modern system.

                  Exhibit 11
                  Additional Work is Needed on Key System Features
                                  Automated             Automated           Sufficient        Ability to           Reporting
                                     Claims          Communications         Capacity         Implement             Capability

                   Feature
                                  Processing                                                  Changes




                                                      Claimant portal
                                   Process is        shows information                                             Insufficient
                                                                             Needed         Implementing
                                 largely manual,      such as benefit                                              reporting is


                   Description
                                                                          upgrades were   federal programs
                                 though lack of         amount and                                              available due to
                                                                         made to server was difficult due to
                                 work claims are       payments, but                                           lengthy turnaround
                                                                           and storage       insufficient
                                     partly             automated                                              times and reliability
                                                                             capacity         resources
                                   automated        communications are                                              concerns
                                                          limited


                                       Key features of modernized UI systems include the following:

                                                •   Automated claims processing – A high degree of automation can
                                                    make the claims process more efficient, improve accuracy, and
                                                    minimize staff involvement, which reduces the need for additional
                                                    staff when claim volume rises. For example, Minnesota’s system uses
                                                    extensive automation to obtain necessary information from claimants
                                                    while they are completing the application and then flags eligibility
                                                    issues. It will then send additional questions to employers to reconcile
GDOL’s Unemployment Insurance Pandemic Response                                                                               29




                                              claimant information when necessary. The degree of automation
                                              enabled Minnesota to eliminate the claims processor position entirely.
                                              In contrast, GDOL’s process for determining eligibility is very manual.
                                              Staff must perform a search for each claimant’s wage history, check
                                              for claims in other states, and manually review application questions,
                                              which could be automated. For example, to ensure claimants are
                                              willing to accept similar job conditions as their previous job, GDOL
                                              staff manually check whether the miles the claimant is willing to travel
                                              are greater than or equal to the miles traveled to their previous job.
                                              When issues are identified, staff must call the claimant—and
                                              potentially the employer—for more information, which can cause
                                              additional delays. Eligibility reviews also require staff to repeatedly
                                              switch between computer programs12 and manually type the
                                              claimant’s Social Security Number into each.
                                              Staff also reported numerous claimants attempted to force an
                                              eligibility decision by filing appeals before receiving a determination
                                              that could be appealed. These invalid appeals contributed to the
                                              current backlog. To reduce these types of errors that increase
                                              workloads, GDOL could incorporate new system rules, such as only
                                              allowing claimants to file appeals after receiving a determination.
                                              During the pandemic, Georgia partially automated certain lack-of-
                                              work claims. Staff perform the initial review and request separation
                                              information from the employer. If the employer indicates the
                                              separation reason is lack of work (i. e., no work is available for the
                                              employee), the system can match their response with the claimant-
                                              reported reason in the application and process the claim for payment.
                                         •    Automated communications – Greater use of automated
                                              communications helps reduce the need for staff resources while


                                   GDOL made significant IT upgrades during the pandemic
        GDOL has made other upgrades not directly tied to the five key capabilities discussed in this finding. These
        upgrades likely improved performance and helped address fraud during the pandemic. Examples include:

            •   Multi-claimant upload capability for employer-filed claims – This feature allows for easier filing of bulk
                claims. Employers can file online for multiple employees simultaneously instead of submitting a separate
                form for each employee or mailing a disk with multiple employee claims.
            •   PIN resets – Claimants can use a self-service feature to reset their PINs online. Previously, claimants had
                to call GDOL and ask staff to reset the PIN.
            •   Fraud detection – GDOL created checks for duplication in claimant-provided information (e.g., phone
                numbers) to help identify fraud.
            •   ID.me implementation – ID.me is a third-party vendor that allows most claimants to verify their identities
                online instead of providing documents to GDOL.


      12 These programs include different applications within the claims management system, the wage database, and ICON, an

      interface with other states’ unemployment agencies, where staff check for wages and claims in other states.
GDOL’s Unemployment Insurance Pandemic Response                                                                      30




                                            providing claimants more timely information. Automating requests
                                            for documentation and allowing claimants to upload it directly would
                                            reduce staff intervention and improve efficiency. Automated status
                                            information also helps claimants understand the steps they need to
                                            take and reduces the need to contact the agency for updates. For
                                            example, Maryland has a claim tracker with information such as
                                            upcoming hearings and open items the claimant needs to complete.
                                            Maryland’s claimant portal also allows claimants to upload
                                            documentation for adjudication and appeals.
                                            Currently, GDOL staff call the claimant if additional information is
                                            needed after the application is submitted. For example, staff may ask
                                            the claimant to mail, email, or fax a copy of the separation form
                                            provided by their employer. Staff then link the document to the
                                            correct claim and resume the claim process. Additionally, if claimants
                                            want to know the status of their claim (e. g., awaiting a claims
                                            examiner review), they must call GDOL for updates. This issue
                                            contributed significantly to the increase in claimant inquiries during
                                            the pandemic (discussed on page 56).
                                            GDOL has taken steps to automate some communications. In spring
                                            2020, GDOL implemented a claimant portal providing information
                                            such as payment history and remaining benefit balance. Staff
                                            indicated plans for additional upgrades to allow greater use of the
                                            portal for communications and uploads, which would also improve
                                            the security of confidential information in claimant documents.
                                        •   Sufficient capacity – A UI claims management system should be
                                            able to handle incoming claim volume without significant
                                            performance issues. In 2017, GDOL began to upgrade its server and
                                            storage capacity, which was completed in spring 2020. These
                                            upgrades helped prevent the system from being overloaded and
                                            crashing under increased traffic. Other states experienced capacity
                                            issues such as website and claim system outages, particularly early in
                                            the pandemic when claims surged suddenly.
                                            To avoid maintaining the necessary capacity internally, many states
                                            have moved to the cloud to use vendor capacity accessible over the
                                            internet. The cloud allows agencies to scale capacity up or down as
                                            needed and avoid maintaining excess capacity. While cloud security
                                            has been a concern in the past, GDOL indicated it would likely move
                                            to the cloud in the future, noting it would help decrease costs and
                                            improve efficiency.
                                        •   Ability to implement changes and new programs – A
                                            modernized UI system can help states more readily accommodate law
                                            changes and new UI programs, which became especially important
                                            during the pandemic. Once U.S. DOL issued guidelines for its new
                                            programs, each state had to develop programming to ensure
                                            guidelines were followed. Although there was some variation, states
GDOL’s Unemployment Insurance Pandemic Response                                                                         31




                                             with fully modernized systems implemented the federal programs
                                             more quickly than other states, which meant claimants received their
                                             benefits more quickly.
                                             GDOL IT officials stated that implementing new federal programs
                                             required significant time and resources, though data was unavailable
                                             to isolate costs. Georgia issued its first PUA13 payments 28 days after
                                             the passage of the CARES Act, 10 days faster than the national
                                             average. However, Georgia did not issue its first PEUC payments for
                                             76 days, 26 days slower than average. Additionally, Georgia
                                             implemented MEUC (a $100 a week supplement for non-PUA
                                             claimants with significant income from self-employment) after the
                                             program ended. The program was effective in Georgia for the weeks
                                             ending January 2 through June 26, 2021, so claimants applied and
                                             were paid retroactively, with the first payments issued November 12.
                                             It should be noted that the IT system is one factor in the speed of
                                             program implementation, and some states with more modernized
                                             systems also experienced delays in implementing federal programs.
                                             While system improvements are planned, GDOL staff indicated that
                                             none would specifically help reduce the resources needed to
                                             implement statutory changes and new programs.
                                        •    Reporting capability – A state’s UI system should efficiently and
                                             accurately produce reporting to inform management decision making.
                                             As discussed on page 20, timely analysis of accurate program data can
                                             help management better understand the issues the program faces. For
                                             example, Alabama DOL officials stated that staff can generate reports
                                             to inform management decisions more quickly than before
                                             modernization. The system allows the creation of reports without an
                                             IT programmer writing and running the query, a process that took up
                                             to three days prior to modernization.
                                             GDOL cannot provide new, reliable reports in a timely manner.
        GDOL needs four to                   Regular reporting on UI claims is limited to data points that U.S. DOL
        six weeks to generate                requires. Any additional reporting must be programmed by IT staff
        new reports                          upon request, which can take four to six weeks per program. This
                                             means it would take months to provide any new reporting on regular
                                             (state) UI, PEUC, and PUA during the pandemic. As a result, UI
                                             management could not use the reports to inform decision making.
                                             Additionally, we found significant errors in the data GDOL provided
                                             to the audit team and in the regular reporting to U.S. DOL. The data
                                             we received contained obvious errors such as blank fields and claims
                                             that were paid before they were approved. Data reported to U.S. DOL
                                             included duplicate claims and underreported the number of appeals
                                             filed. Like many other states, Georgia failed federal data validation


      13 Staff noted that PUA required more resources to implement than the other programs because GDOL created a new

      application and process for requirements that differed from previous UI programs.
GDOL’s Unemployment Insurance Pandemic Response                                                                                      32




                                              tests during the pandemic, indicating the data was not reliable for
                                              analysis or management use.

                                 GDOL indicated its modernization efforts have been hampered by limited
                                 funding. Federal funding for UI program administration generally follows the
                                 volume of claims, with funds increasing during recessions and decreasing during
                                 periods of economic growth. As a result, continued low unemployment rates after
                                 the Great Recession in 2009 led to lower federal funding for the program. In
                                 addition to federal funding, GDOL indicated that a state administrative
                                 assessment14 on wages was intended to supplement federal funding and support
                                 GDOL program administration. GDOL collects the assessment from employers
                                 and transmits it to the state treasury, and funding from the assessment is
                                 appropriated annually by the General Assembly. GDOL has requested the full
                                 amount of the assessment collected, with a significant portion dedicated to IT
                                 projects in several years. In fiscal years 2018-2020, the appropriation was
                                 approximately $7.3 to $11.3 million below the assessment collected.15

                                 Additionally, the underlying programming for much of GDOL’s system is old and
                                 contributes to GDOL’s technological challenges. GDOL uses COBOL16 program
                                 language as the basis of its claims management system, and staff indicated that
                                 code for some components was written in the 1970s. GDOL reported that these
                                 components function as intended; however, it is difficult to hire COBOL
                                 programmers to make system changes and generate new reporting. While still in
                                 use in many industries, COBOL is no longer used for new programming and most
                                 students do not learn it. GDOL must compete with other organizations for a
                                 declining number of COBOL programmers, who continually become more
                                 expensive. GDOL indicated it is replacing COBOL language with newer
                                 programming languages (such as Java) as it updates components of the system.


                                     RECOMMENDATIONS
                                             1.    GDOL should increase automation of its claim processing.
                                             2.    GDOL should continue to improve its communications with
                                                   claimants through the portal—particularly with regard to status
                                                   updates and document submission.
                                             3.    The General Assembly should consider additional funding to
                                                   upgrade/modernize GDOL’s UI systems. The General Assembly
                                                   could require a list of planned projects and periodic status reports
                                                   for the additional funds provided, similar to oversight reports
                                                   found in O.C.G.A. 50-25-7.1 (d).

                                     Agency Response: “GDOL agrees that it has made a number of key
                                     improvements to its case management system during the Pandemic,”

      14 The assessment is currently scheduled to expire on January 1, 2023.
      15 These amounts indicate the difference between the appropriation for a given fiscal year and the collections for two years

      earlier. This delay allows time for GDOL to collect and submit the assessment and the General Assembly to appropriate it.
      16 COBOL is used by other states’ unemployment agencies, other Georgia state agencies, and the private industry.
GDOL’s Unemployment Insurance Pandemic Response                                                                   33




                                    largely paid for with federal pandemic funding. GDOL indicated that
                                    additional upgrades to reporting and information systems would have
                                    occurred if the full administrative assessment had been appropriated. It also
                                    stated it had implemented the suggestion regarding limiting appeals to
                                    those with a determination. Regarding COBOL, GDOL said it has converted
                                    parts of its system into more modern languages like Java.
                                    GDOL disagreed that other states with more modernized systems were able
                                    to implement federal programs faster than Georgia. It stated that while the
                                    U.S. DOL OIG had found that states with “ostensibly more modernized IT
                                    systems generally implemented federal programs faster,” that was not true
                                    with respect to GDOL. It added that some states with these modernized
                                    systems had recently decided to replace those systems.
                                        Auditor’s Response: Additional IT modernization helps states
                                        implement required changes more quickly and/or with fewer resources.
                                        The May 2021 U.S. DOL OIG report cited older IT systems as a key
                                        factor in states’ struggles to implement the CARES Act programs. It
                                        found that states with more modernized systems implemented PEUC 15
                                        days faster and PUA 8 days faster, on average, than other states. The
                                        report did not include the IT resources (hours and funding) required to
                                        implement a new program.
                                    Agency Response: GDOL stated that not all additional reports would take
                                    four to six weeks, noting that the audit request was very complex. It stated
                                    that ad hoc reports take programming, and the amount of time depends on
                                    the request and the volume of other pending requests.
                                        Auditor’s Response: The audit team specifically asked whether a
                                        reduced request could be pulled more quickly; GDOL offered no
                                        suggestions for expediting the data extract. (This data request was
                                        similar to what we would request from other state agencies for
                                        performance audits.) The length of time to produce ad hoc reports for
                                        management is also lengthy. GDOL staff indicated they sometimes must
                                        identify work arounds to avoid asking IT to run a query for them.
                                        Finally, the U.S. DOL OIG’s May 2021 report noted that Georgia’s
                                        required reporting was delayed for the new programs. Georgia was one
                                        of five states that had not reported any PUA or PEUC claims through
                                        August 2020, although it had already begun to pay these claims.

                                    Recommendation 1: GDOL agreed that additional automation is possible
                                    as funding allows but noted there are limits on what can be automated.
                                    Recommendation 2: “GDOL agrees that opportunities exist to offer
                                    additional services to customers through the claimant portal. GDOL has
                                    numerous improvements under development.” It cited improvements made
                                    to the claimant portal during the pandemic. It also noted plans for
                                    additional improvements for more automated communications, which will
                                    include a visual progress bar to show claim status and greater access to
                                    claim documents.
                                    Recommendation 3: “GDOL agrees that the General Assembly should
                                    consider allocating additional funding to upgrade and modernize GDOL’s
                                    UI IT system,” noting that new improvements would require ongoing
                                    funding for maintenance and licensing fees, especially when federal funding
                                    falls.
GDOL’s Unemployment Insurance Pandemic Response                                                                                    34




               Staffing
               Finding 5:        The number of GDOL employees has declined over time, resulting in fewer
                                 employees to address the surge in claims.

                                 The number of GDOL personnel assigned to the UI benefit unit and the statewide
                                 operations division declined in the years preceding the pandemic. With fewer
                                 staff, the two units responsible for processing unemployment claims had less
                                 capacity to respond to the pandemic surge in claims. The IT division, which is
                                 also integral to UI claims processing, also experienced a decline in personnel.
                                 However, the effect of the decline is less clear because the division’s significant
                                 use of contractors predates the pandemic.

                                 Records from the Department of Administrative Services indicate that the
                                 number of GDOL personnel significantly declined in the years before the
                                 pandemic. Overall, GDOL had 1,719 employees at the end of fiscal year 201317 but
                                 just 1,042 at the end of fiscal year 2019, about eight months before the pandemic.

                                 As shown in Exhibit 12, the units with primary responsibility for processing UI
                                 claims—statewide operations and UI benefits—had fewer employees in 2019 than
                                 2013. Statewide operations staff, which includes career center personnel,18
                                 declined 41% from 2013 to 2019. UI benefits staff declined 32% over the same
                                 period. Both units attempted to add staff during the pandemic with mixed
                                 success (see page 41).

                                 Exhibit 12
                                 Primary Units Supporting UI Had Staff Declines Prior to the Pandemic,
                                 FY 2013 – FY 2021

                                        823                                                         Pandemic Begins
                                                Statewide Operations
                                                                               657


                                                                                                  484        531      505



                                        285     UI Benefits                    258
                                                                                                                      226
                                                                                                   194      194
                                         113    IT
                                                                                76                 65        65        65


                                        2013      2014     2015      2016      2017     2018      2019     2020       2021

                                     Source: GDOL documents




      17 All years include full- and part-time personnel, as well as those classified as temporary. In addition, GDOL had over 3,000

      employees prior to the fiscal year 2013 transfer of Vocational Rehabilitation employees into a separate agency.
      18 Career center personnel are typically responsible for UI claims and re-employment services. They have directed more time

      to UI claims since the beginning of the pandemic.
GDOL’s Unemployment Insurance Pandemic Response                                                                                  35




                                The decline in staffing coincides with a decline in funding to GDOL. From 2013 to
                                2019, GDOL’s budget dropped from $180.7 million19 to $113.8 million, with $40.1
                                million of the decline being a reduction of federal funds. GDOL officials indicated
                                that federal funds for various services decline in periods of low unemployment,
                                such as the one experienced in the years between the Great Recession and the
                                pandemic.

                                In addition to the units discussed above, GDOL’s IT unit is vital to claims
                                processing. It is responsible for maintaining and updating the information
                                systems used by claimants, employers, and GDOL employees. As shown in
                                Exhibit 12, IT personnel declined by approximately 42% during the 2013-2019
                                period, but the impact of the decline is less clear. Unlike UI benefits and
                                statewide operations, IT was already supported by outside staffing agencies prior
                                to the pandemic. As a result, a decline in agency employees does not necessarily
                                mean an equal decline in staff supporting the function (i.e., staff declines could be
                                offset by increased contractors). As discussed on page 40, IT significantly
                                increased its use of contractors when the pandemic began.


                                    Agency Response: “GDOL agrees that the number of its employees
                                    declined over time beginning in 2012, consistent with other state agencies
                                    due to budget cuts, lack of raises for a number of years, and reduced
                                    retirement benefits.” GDOL stated that it “had less than half the number of
                                    employees during the pandemic as during the Great Recession.” It indicated
                                    that additional administrative funding in the period after the Great
                                    Recession would have helped maintain “administrative staffing levels to
                                    better meet the challenges of the Pandemic.” GDOL also noted that, during
                                    the pandemic, many UI staff were paid less than what many claimants
                                    received in UI benefits.




              Finding 6:        GDOL’s staffing actions to address the claims increase were similar to
                                strategies used by other state UI programs.

                                In response to the increase in UI claims, GDOL took several actions to increase
                                the number of work hours devoted to UI, including redirecting staff, encouraging
                                overtime, hiring contractors, and rehiring retired employees. Staffing strategies
                                alone were unlikely to significantly improve claims processing times because of
                                the manual processing and training required for many aspects of the work.

                                Every state UI program faced a historic increase in claims at the beginning of the
                                pandemic. The increase was larger and quicker than those of a cyclical recession,
                                when an agency can increase staffing over a longer period. Rapidly increasing
                                staff was more challenging due to the amount of training for new employees who
                                make claim determinations. GDOL did not modify the training to accelerate

      19 The fiscal year 2013 budget included a state fund transfer of $16.8 million from the Governor’s Emergency Fund to pay

      interest on a loan to the Unemployment Trust Fund.
GDOL’s Unemployment Insurance Pandemic Response                                                                                         36




                                employees’ ability to process claims. Instead, strategies focused on using existing
                                or former staff with UI experience and hiring contractors in support roles.

                                Over the course of the pandemic, GDOL increased the number of hours devoted
                                to UI claims processing significantly (see Exhibit 13). Prior to the pandemic,
                                GDOL staff spent less than 65,000 hours per month on UI claims. After a
                                moderate increase in the pandemic’s first month (March 2020), staff hours for UI
                                increased to approximately 110,000 in April. Hours typically remained between
                                100,000 and 125,000 in subsequent months, peaking above 140,000 on two
                                occasions. In June 2021, GDOL hours dedicated to UI claims were still double the
                                number in the months before the pandemic. Nearly 2.1 million hours were spent
                                on UI claims between January 2020 and June 2021.

                                Exhibit 13
                                Staff Hours1 for UI Claims Processing More than Doubled During the Pandemic,
                                January 2020 – June 2021




                                1
                                 Chart includes regular hours for claims processing staff, as well as additional hours resulting from
                                the staffing actions discussed below.
                                Source: TeamWorks HCM, GDOL contractor records



                                To increase staff hours for claims processing, GDOL used many of the strategies
                                common in other states (Exhibit 14). We also found a limited number of
                                differences in how the strategies were implemented. Each strategy is discussed
                                below the exhibit.
GDOL’s Unemployment Insurance Pandemic Response                                                                                 37




                Exhibit 14
                GDOL Employed Most Strategies Used by Other States
                                                                                        Use of Retired         Significant
                              Redirect Staff         Use of               Use of
                                                                                             GDOL           Increase of GDOL
                               to UI Work           Overtime           Contractors
                Action
                                                                                          Employees            Employees




                                                                     By August 2020,                         GDOL attempted
                              More than 20K



                Georgia Use
                                                 More than 20K      15K-20K hours per   51 retirees hired     but could not
                                 hours per
                                                 hours per month       month for UI      between April       greatly expand
                              month (before
                                                  across GDOL        8K-15K hours per   2020 and mid-        staff due to new
                                 overtime)
                                                   spent on UI          month for IT          2021          hires being offset
                              redirected to UI
                                                                       No call center                         by departures


                                      Redirecting Staff to UI
                                      GDOL officials stated the increase in claims required an “all-hands-on-deck”
                                      approach. Prior to the pandemic, UI benefits staff processed claims with support
                                      from career center staff who also provided re-employment services. In March
                                      2020, career center staff re-directed significant hours to UI. Staff in other units
                                      were also redirected to UI tasks. Those with UI experience helped with claim
                                      determinations; others answered phones or helped gather supporting documents.

                                      As shown in Exhibit 15, redirected time to UI totaled approximately 375,000
                                      hours (not including overtime) between March 2020 and June 2021. This
                                      represents 18% of the total UI hours during the 18-month period reviewed.
                                      Beginning in April 2020, the redirection of staff time from their normal duties
                                      routinely contributed more than 20,000 additional hours each month.

                                      Exhibit 15
                                      GDOL Redirected Over 20,000 Hours Monthly to UI, Jan. 2020 – June 2021




                                      Source: TeamWorks HCM, GDOL contractor records
GDOL’s Unemployment Insurance Pandemic Response                                                                              38




                                The redirection of staff time occurred throughout GDOL, though most occurred
                                in statewide operations’ career centers. Career center staff already devoted a
                                portion of their time to UI but redirected re-employment time to UI when the
                                pandemic began. In February 2020, career center staff charged 22,700 hours to
                                UI. Beginning in April, they typically redirected an additional 15,000 to 25,000
                                hours to UI each month (before overtime). UI tax personnel were also spending
                                approximately 4,500 monthly hours to administer federal UI programs by fall
                                2020. See Appendix E for total UI hours by program.

                                Use of Overtime
                                According to GDOL, employees were “strongly encouraged” to work overtime to
                                address the increase in claims. The agency recently began limiting the practice by
                                reinstating its practice of requiring division directors to obtain approval before
                                allowing overtime. For our analysis, overtime includes any extra time worked and
                                recorded by salaried or hourly employees. The time may have been compensated
                                or non-compensated.20

                                After working approximately 2,000 UI overtime hours in the two months prior to
                                the pandemic, GDOL employees logged an additional 358,000 overtime hours
                                between March 2020 and June 2021 (Exhibit 16). Beginning in April 2020,
                                overtime frequently exceeded 20,000 hours a month and reached nearly 36,000
                                in October 2020.

                                Exhibit 16
                                UI Overtime Hours Immediately Increased and Remained Above 20,000 in Most
                                Months Reviewed, Jan. 2020 – June 2021




                                  Source: TeamWorks HCM, GDOL contractor records



      20 Most employees in Fair Labor Standards Act (FLSA) non-exempt roles were permitted to work overtime. Non-exempt

      employees must be compensated for overtime, either through additional pay or the granting of compensatory time. FLSA
      does not require that exempt employees be granted compensation, but compensatory time may be provided.
GDOL’s Unemployment Insurance Pandemic Response                                                                      39




                                Career center staff and UI benefits staff accounted for most overtime hours
                                (approximately 288,000); however, more than 70,000 overtime hours were
                                logged by department administration and UI tax personnel. See Appendix E for
                                total UI hours by program.

                                Use of Contractors
                                Between May 2020 and June 2021, GDOL hired six contract staffing companies
                                to assist with initial claim processing, benefit payments, appeals, and integrity
                                efforts (i.e., combatting fraud). Because contract staff are not permitted to make
                                the actual claim determinations, they served in various support roles. This
                                included data entry, imaging documents, scheduling appeals, fact-finding to
                                resolve discrepancies, and investigating overpayments.

                                As shown in Exhibit 17, UI contractors worked approximately 215,000 hours
                                between May 2020 and June 2021. Contractor hours were approximately 1,600
                                in May 2020 but are estimated at 15,000 to 20,000 for all months after August
                                2020. The number of contractors working each month is unknown given the
                                format of GDOL’s records.

                                Exhibit 17
                                Contractors Began Supporting UI in May 2020 but Hours Peaked in September,
                                Jan. 2020 – June 2021




                                   Source: TeamWorks HCM, GDOL contractor records


                                While GDOL hired contractors for several UI tasks, it did not contract for call
                                center services. The agency noted a negative experience with a contract call
                                center in the past and stated the program’s complexity limits the ability of less-
                                experienced staff to address claimant questions. (See page 41 for more
                                information on customer service staffing.)
GDOL’s Unemployment Insurance Pandemic Response                                                                                   40




                                While not included in the hours spent on processing claims, GDOL’s IT unit also
                                greatly increased its use of contractors during the pandemic. Contracted staff
                                supported the rollout of the new federal programs and other changes made
                                during the pandemic (e.g., ID.me identify verification). In the two months prior
                                to the pandemic, IT contracted for an average of approximately 5,600 hours
                                monthly. Average contractor hours increased to approximately 9,100 for the rest
                                of 2020 and 12,400 for the first six months of 2021. The number of contract
                                employees more than doubled from 37 in January 2020 to 87 in June 2021.

                                Use of Retired GDOL Employees
                                To eliminate the need to provide extensive training to new staff, GDOL officials
                                hired retired employees with UI claims processing experience. Statute limits the
                                number of hours that a state retiree can work in an agency covered by the
                                Employees’ Retirement System (ERS). The retiree loses retirement benefits for
                                the remainder of the calendar year if their work hours exceed 1,040.21 Unlike
                                some other states, Georgia did not waive the statutory work limit for retirees.

                                GDOL hired 47 retirees between April 2020 and early 2021, most within the first
                                three months of the pandemic.22 As shown in Exhibit 18, rehired retirees
                                worked approximately 72,600 hours on UI projects between January 2020 and
                                June 2021. Eight employees worked more than 1,040 hours in 2020 (one
                                exceeded the limit in December), suggesting that the employees continued to
                                work after temporarily losing retirement benefits. As a group, rehired retirees
                                typically worked between 4,000 and 5,000 hours in most months.

                               Exhibit 18
                               Rehired Retirees Often Worked 4,000-5,000 Hours a Month, Jan. 2020 – June 2021




                                Source: TeamWorks HCM, GDOL contractor records

      21 ERS limits do not restrict the number of hours worked in a week or month; therefore, an employee hired on July 1 could

      work 40 hours per week through the end of the year.
      22 Four retirees were working before March 2020. A total of 51 retirees worked at some point during the 18-month period.
GDOL’s Unemployment Insurance Pandemic Response                                                                           41




                                GDOL did not add significant dedicated customer service staff
        GDOL did not significantly expand its UI customer service unit or contract for call center services at the beginning
        of the pandemic. During the period with the highest volume of contacts, responding to calls, emails, and web
        inquiries was primarily assigned to staff throughout the department, including many with other UI duties, such as
        claims processing. Officials stated that a decision to expand its customer service unit was made in May or June
        2020. While recruiting began in August, GDOL indicated it did not receive enough qualified applicants. A staff of
        16, many hired in April 2021, began taking phone calls after a modified three-week training program.

        GDOL indicated that it did not contract for call center services due to a negative experience with a contract call
        center, as well as the program’s complexity, which limits the ability of inexperienced staff to address claimant
        questions. As such, contract staff would not be able to answer the complex questions posed by many claimants.

        We found that strategies such as hiring additional agency customer service personnel or contracting for call center
        services were common among other states we reviewed. Wisconsin increased its customer service unit from 90 to
        approximately 800 in the first four months of the pandemic by hiring staff and contracting for call services.
        California, Kansas, and Virginia also added hundreds of staff during 2020. The responsibilities of the contractors
        may have varied, with some answering basic questions about programs (instead of individual claims) and others
        answering phone lines dedicated to the new federal programs.



                                Hiring of New Employees
                                GDOL hired additional staff in UI benefits and statewide operations during the
                                pandemic. However, employee departures resulted in limited growth in the
                                number of agency employees.

                                To reduce the impact of recruiting on program staff, the hiring process for UI
                                benefits and statewide operations was changed to decrease program employees’
                                required time. For example, HR personnel conducted interviews on behalf of
                                statewide operations for career center positions. Statewide operations
                                management only needed to approve those selected.

                                GDOL officials stated that recruiting efforts were challenging due to pay and
                                COVID-19. Specifically, agency officials had difficulty obtaining qualified
                                personnel for a planned customer service center to handle phone calls and staff
                                (or even interns) with a legal background to assist with the appeals process.

                                TeamWorks HCM data indicates that 137 employees were hired or rehired in
                                those programs between April 2020 and June 2021. However, as shown in
                                Exhibit 12 on page 34, UI benefits grew by 32 employees between the end of
                                fiscal years 2019 and 2021; statewide operations had 21 more employees. Agency
                                officials stated that employees continued to depart during the pandemic, blunting
                                attempts to increase staffing.


                                    RECOMMENDATIONS
                                           1.     GDOL should work with the General Assembly to create an
                                                  exception to the retiree work limit during periods of high
                                                  unemployment. In future situations like the public health
                                                  emergency, GDOL could work with the Office of the Governor to
                                                  include a waiver in any related executive order.
GDOL’s Unemployment Insurance Pandemic Response                                                                     42




                                    Agency Response: “GDOL used all available resources in a similar
                                    manner that other state UI services did. The most experienced staff were
                                    utilized to do claims examining, adjudication, and appeals; retirees were
                                    rehired; staff were repurposed; overtime hours approved; and contractors
                                    were engaged to fill in the gaps.”
                                    GDOL disagreed with the report’s discussion of the customer service unit. It
                                    wanted to clarify that employees throughout the department contribute to
                                    customer service, not only the dedicated customer service unit. “At no time
                                    did GDOL have only 16 employees dedicated to answering customer calls or
                                    providing customer service.” GDOL stated that customer service “has
                                    always been and continues to be an agency wide collaborative effort…Each
                                    unit and career center continue to have dedicated staff assigned to assist
                                    with customer calls.”
                                    GDOL noted that the agency requested funding for additional call centers in
                                    2020 but did not receive it and that federal funding made available during
                                    the pandemic was what allowed the eventual expansion of the customer
                                    service unit. GDOL reiterated its contention that contract call centers are
                                    ineffective, based on a prior unsuccessful experience and conversations with
                                    other states that utilized them during the pandemic. They noted that
                                    seasoned GDOL employees would be needed to support a contract call
                                    center.
                                    GDOL stated it has made a “concerted effort to ‘right-size’ the agency’s
                                    statewide operations and align services more efficiently. As part of a larger
                                    strategic effort to realize cost savings and make UI more accessible to
                                    customers, GDOL is shifting to call centers as the primary point of contact to
                                    obtain UI Services rather than physical locations like career centers. This
                                    strategic effort preceded the pandemic.” GDOL further stated that, during
                                    the pandemic, it “focused on utilizing technology to better assist our
                                    customers,” which included use of a dynamic scheduler for scheduling calls
                                    with career center staff, a chat bot on the website, online tutorials, and
                                    enhanced social media presence.

                                    Recommendation: GDOL agreed with the recommendation and noted
                                    that it requested an exception to the retiree work limit through an executive
                                    order since the General Assembly was not in session.
GDOL’s Unemployment Insurance Pandemic Response                                                                  43




              Communications
              Finding 7:        Information available to claimants was not always clear and accurate, which
                                contributed to application errors, processing delays, and increased calls
                                and emails from claimants.

                                While GDOL expanded communications during the pandemic, some information
                                provided to UI claimants has been unclear or even contradictory. This has
                                resulted in claimants answering application questions incorrectly,
                                misunderstanding actions they need to take, or failing to understand their claim’s
                                status. Addressing these issues led to delays in the proper processing of
                                claimants’ applications and receipt of benefits. It also requires additional staff
                                resources for increased claimant calls and emails, as well as increased appeals.

                                Because the UI program is complex, clear and accurate instructions are critical to
                                ensure claimants provide the information necessary to process a claim. This
                                became more important during the pandemic because new federal programs
                                were added and many individuals were filing for UI for the first time. When there
                                are misunderstandings, claimants may answer questions incorrectly or fail to
                                provide required documentation, which typically requires GDOL staff to contact
                                the claimant. Incorrect or incomplete information may cause a claim to be
                                incorrectly denied, resulting in an appeal and benefit delays. Additionally, when
                                communications are unclear, claimants may attempt to contact GDOL for
                                clarification, which requires additional GDOL resources to respond.

                                During the pandemic, GDOL increased its communications to claimants. The
                                agency added several pages to its website, including a general COVID-19
                                information page and Frequently Asked Questions pages for COVID-19 eligibility,
                                PUA, and PEUC. A chatbot was also added to automatically answer pre-
                                programmed questions. Additionally, GDOL created a video tutorial that
                                provided claimants information such as how to locate the claim application and a
                                description of initial emails sent after application submission. Finally, GDOL
                                used social and traditional media to provide guidance on claims, including
                                common claimant mistakes and reasons for delays.

                                The additional communications did not address all issues. Claimants reported
                                that they did not have needed information and could not reach GDOL staff for
                                assistance. In reviewing GDOL’s correspondence to claimants, we identified
                                language that was unclear and/or out of date, as discussed below.

                                Key Communications Are Not Clear
                                While UI is a complex program, claimant communications should explain the
                                process using non-technical, easy-to-understand language. Best practices for
                                readability suggest an 8th grade level for communications to the public. However,
                                GDOL’s UI communications are frequently written at a 12th grade reading level or
                                higher. GDOL has not surveyed claimants or analyzed common errors made by
                                claimants to identify and address areas of confusion.
GDOL’s Unemployment Insurance Pandemic Response                                                                                    44




                                Additionally, we identified instances of unclear language in key communications,
                                such as the UI application and determination letters, as described below.

                                         •   Application Questions – GDOL staff report that claimants often
                                             misunderstand certain application questions. For example, GDOL
                                             staff indicated claimants frequently misunderstand the work history
                                             question23 at the beginning of the UI application. If the claimant
                                             indicates they have no work history to report, the remainder of the
                                             application is skipped. Staff must then call the claimant, verify the
                                             error, and complete all remaining application questions based on
                                             responses given by phone. In addition, some application questions
                                             may be answered illogically (e.g., claimants indicating they are
                                             unwilling to work any day of the week). These instances must also be
                                             verified with the claimant. If GDOL staff cannot reach the claimant to
                                             get accurate information, the claims examiner must decide eligibility
                                             based on the information available, which may result in a denial.
                                             During the pandemic, the PUA application included confusing
                                             questions related to income verification, as shown in Exhibit 19. The
                                             first option indicates the claimant agrees to provide proof of earnings
                                             after confirming they have no proof of earnings. Additionally, the use
                                             of check boxes allows for more than one selection, but the choices
                                             conflict and it is not clear what happens if the claimant does not
                                             submit supporting documents. When asked, GDOL staff could not
                                             clarify the intent of the language used.

                                 Exhibit 19
                                 Unclear Language Used in PUA Application

                                                                                                         Agrees to provide proof
                                                                                                         of earnings after
                                                                                                         confirming they have
                                                                                                         no proof of earnings




                                    Choices conflict, but
                                    the use of check
                                    boxes allows for more
                                    than one choice

                                                       Conflicting
                                                       consequences of
                                                       failure to provide
                                                       proof




                                   Source: Application screenshots provided by GDOL


      23 The work history question reads, “Have you worked for any employer(s) in the past 18 months?”
GDOL’s Unemployment Insurance Pandemic Response                                                                        45




                                        •   Determination Letters – GDOL letters to communicate monetary
                                            and nonmonetary determination decisions do not clearly state
                                            whether the individual’s claim has received overall approval and what
                                            steps remain in the process. While GDOL provides clarification on its
                                            website or in the handbook, the letters that communicate eligibility
                                            decisions do not provide the claimant with adequate information.
                                                  o   Monetary – Monetary determination letters do not specify
                                                      that this first step is to determine whether the individual has
                                                      sufficient wages to establish a claim. Instead of a clear “yes” or
                                                      “no”, the letter only shows a weekly benefit amount that
                                                      represents what the claimant would receive if later determined
                                                      eligible. Absent additional language, claimants with a weekly
                                                      benefit amount of $0 do not always understand that this
                                                      means their claim has been denied due to lack of wages.
                                                      Similarly, some claimants with a positive weekly benefit
                                                      amount do not understand this is the first determination and a
                                                      nonmonetary determination may be necessary. Instead, they
                                                      believe this is a final approval and expect to begin receiving
                                                      payments within days. During the pandemic, some claimants
                                                      expressed frustration at payment delays when in fact their
                                                      claim was still awaiting a claims examiner’s nonmonetary
                                                      determination. The claimant handbook describes the steps
                                                      GDOL takes prior to final approval, but this information is not
                                                      clearly disclosed in the letter.
                                                  o   Nonmonetary – Claimants may receive conflicting
                                                      information when separate nonmonetary determination letters
                                                      are sent for each eligibility issue identified. Each nonmonetary
                                                      determination letter addresses a single issue, and the number
                                                      of issues varies by claimant. For example, the claims examiner
                                                      could determine the claimant quit their job for good cause
                                                      (eligible) and determine that they are not available to work
                                                      because they need to care for a child (ineligible). The second
                                                      determination supersedes the first, making the claimant
                                                      ineligible for benefits. However, no letter communicates an
                                                      overall approval or denial decision, and the claimant could
                                                      receive the conflicting letters at different times. Clarification
                                                      about conflicting letters is provided on the website and in the
                                                      handbook but not in the letters themselves.
                                        •   Claimant Handbook – GDOL’s claimant handbook provides
                                            detailed information about the claims process but may be difficult for
                                            claimants to follow. The handbook is 60 pages long and is written at
                                            an 11th grade reading level. Additionally, the handbook was not
                                            updated with policy changes during the pandemic, as discussed below.
GDOL’s Unemployment Insurance Pandemic Response                                                                                46




                                Claimants Received Outdated Information During the Pandemic
                                GDOL did not update all communications to reflect changes made during the
                                pandemic, resulting in inaccurate communications. According to news reports,
                                the conflicting information led to claimant confusion. GDOL staff indicated email
                                correspondence was updated during the pandemic, but letters and the claimant
                                handbook were not.

                                         •    Career Center Closures – GDOL closed its career centers to the
                                              public in March 2020, but various communications still directed
                                              claimants to visit a career center to provide documents or address
                                              certain eligibility issues. For example, the application confirmation
                                              page indicated claimants must visit a career center to complete an
                                              applicant status affidavit and provide identification and other
                                              documents. Additionally, a letter sent to active claimants in the
                                              summer of 2021 instructed them “take this letter to your career
                                              center” if still unemployed at the end of their benefit year.24 The letter
                                              did not provide an alternative way to address the issue.
                                         •    Work Search Requirement – In March 2020, GDOL waived the
                                              requirement for claimants to search for work. The correct information
                                              was provided in the COVID Frequently Asked Questions on the
                                              website, but other communications continued to indicate a search was
                                              required. For example, the application and claimant handbook
                                              indicated claimants must submit work search records to GDOL each
                                              week.
                                         •    Expected Time Frames – During the pandemic, the time for each
                                              phase of the claims process took longer than usual, but the time
                                              frames posted on the GDOL website were not updated. For example,
                                              the Frequently Asked Questions web page indicated that appeals are
                                              usually heard within 2 ½ weeks, but GDOL reporting indicated many
                                              claimants waited a year or more before the appeal was heard. Clearer
                                              messaging could have tempered claimants’ expectations, reducing
                                              frustration and the number of inquiries GDOL received about the
                                              delays.

                                     RECOMMENDATIONS:
                                             1.   GDOL should identify and implement ways to make the
                                                  application process clearer for claimants (e.g., clarifying language
                                                  for questions, verification prompts for illogical answers).
                                             2.   GDOL should provide plain language explanations in its
                                                  determination letters.
                                             3.   GDOL should use surveys or focus groups to test the clarity of
                                                  language with claimants and/or employers.


      24 Unemployment claims are valid for 52 weeks (a benefit year), after which claimants must file a new claim to receive

      additional benefits.
GDOL’s Unemployment Insurance Pandemic Response                                                                   47




                                           4.     When changes are made to processes, GDOL should ensure all
                                                  communications are updated so claimants understand what steps
                                                  they should follow.


                                    Agency Response: GDOL agreed that information provided to claimants
                                    was not always clear but indicated U.S. DOL often requires specific
                                    language to be used. It stated that with additional time, it believes that it
                                    would be able to produce additional examples of U.S. DOL requiring specific
                                    language.
                                        Auditor’s Response: Our review concluded that U.S. DOL had not
                                        dictated the language in most of the communications we reviewed, based
                                        on our review of U.S. DOL program letters to the states and statements
                                        made by GDOL staff. We shared this conclusion with GDOL staff during
                                        the audit; they expressed no disagreement and provided only the
                                        example of language requirements for separation reasons in the PUA
                                        application.
                                    Agency Response: GDOL also noted that it expects to be awarded funding
                                    under U.S. DOL’s plain language initiative that will allow it to speed up its
                                    recent work in this area. It also stated that it “initiated a plain language
                                    project with the National Association of State Workforce Agencies
                                    (NASWA)” that include templates for claimant handbooks using plain
                                    language and short video scripts of the UI Claim process. The first video will
                                    be on the GDOL website, with a plan “to integrate into the UI online claims
                                    application.”
                                    GDOL noted that it used a “multi-faceted communication approach to
                                    explain and communicate UI processes and changes to the programs.”
                                    GDOL indicated it communicated UI processes and program changes
                                    through various means—social media, website, podcasts, conference calls,
                                    press conferences and releases, and videos. Finally, GDOL disagreed that
                                    there is a “conflict in the language used in the PUA Application.”
                                    Recommendations 1 and 2: GDOL indicated U.S. DOL had only recently
                                    begun allowing plain language in determination letters. It added that it will
                                    be modifying claimant communications but stated that “this alone will not
                                    solve all problems as customers often do not fully read the communications
                                    sent” to them.
                                    Recommendation 3: GDOL agreed “that use of surveys or focus groups
                                    can test the clarity of language.”
                                    Recommendation 4: GDOL stated that every communication would be
                                    updated in an ideal world but that it is not cost effective to update
                                    permanent documents with temporary information. Instead, it said it had
                                    “made various program changes and employed a multi-faceted
                                    communication approach in an effort to reach every claimant.”
GDOL’s Unemployment Insurance Pandemic Response                                                                               48




              Policy Changes
              Finding 8:                  GDOL adjusted policies to reduce claims processing times but could have
                                          considered additional steps.

                                          GDOL modified several policies to address the increased claim volume during the
                                          pandemic. Significant actions included requiring employers to file claims for
                                          certain claimants and waiving the work search requirement. Though GDOL could
                                          have implemented additional policy changes that would have reduced delays for
                                          some, it is unlikely that they could have prevented all delays. Additionally, some
                                          policy changes used by other states may not have been advisable. It should be
                                          noted the discussion below is limited to policies and processes; actions related to
                                          staffing, technology, and communications are discussed in other findings.

                                          The significant increase in UI claims required states to consider modifying
                                          policies and processes so claimants received the assistance they needed in a
                                          timely manner. However, any changes to UI policies were limited by federal and
                                          state requirements to ensure only eligible claimants received benefits.

                                          We identified two significant GDOL policy changes that helped reduce claims
                                          processing times, as shown in Exhibit 20. We also reviewed other states’
                                          practices and identified additional changes that could have been incorporated to
                                          further reduce delays. The surge in claims early in the pandemic led to an
                                          increase in delayed payments nationwide. We found no policy change that would
                                          have prevented all delays.

                           Exhibit 20
                           Georgia Implemented Some Policies to Reduce Delays

                                                Employer                Work                  Single                Use of
                                               Claim Filing        Search Waiver           Application        Redetermination

                            Feature



                                                                                                               Not Adequately
                                             Implemented –
                                                                   Implemented –       Not Implemented –      Communicated –



                            Georgia Use
                                            Employers required
                                                                   Waived claimants’   U.S. DOL allowed the      Claimants can
                                               to file partial
                                                                    requirement of        use of a single      request additional
                                              unemployment
                                                                  weekly job contact   application for regular reviews of monetary
                                            claims on behalf of
                                                                       reporting            UI and PUA          or nonmonetary
                                                employees
                                                                                                                determinations



                                                 •    Employer Claim Filing – GDOL required employers to file partial
                                                      unemployment claims on behalf of their employees to help speed
                                                      claims processing. On March 16, 2020, GDOL mandated that
                                                      employers file partial unemployment claims for employees with
GDOL’s Unemployment Insurance Pandemic Response                                                                          49




                                              reduced hours or temporary layoffs resulting from the public health
      Partial unemployment –                  emergency. The rule also mandated online filing (eliminating the
      A claim resulting from                  mail-in option) and expanded the process to part-time employees.
      reduced hours or a
                                              Employer-filed claims have fewer steps in the eligibility review
      temporary layoff, due solely
                                              process, which typically allows benefits to be paid more quickly. When
      to lack of work (i.e.,
                                              the employer files a partial unemployment claim, it acknowledges that
      employer has less or no
                                              the claim has resulted from lack of work. As such, GDOL staff no
      work for the employee)
                                              longer need to contact the employer or interview the claimant to verify
                                              the reason for unemployment. The benefits and problems that
                                              occurred with employer-filed claims are discussed further on page 51.
                                          • Waiving the Work Search Requirement – GDOL waived the
                                            requirement that claimants make three reportable job contacts (e.g.,
                                            submitting a job application or resume) each week to remain eligible
                                            for unemployment. GDOL implemented the emergency rule on March
                                            16, 2020, after U.S. DOL allowed states to waive the work search
                                            requirement. The waiver eliminated the need for GDOL staff to audit
                                            work searches and investigate deficiencies, freeing staff to work on
                                            claims processing instead. Given the state of the job market and
                                            ongoing public health concerns, work searches may have caused
                                            unnecessary work for both claimants and staff.
                                         •    Single Application for Regular UI and PUA – The federal
                                              Pandemic Unemployment Assistance (PUA) program provided UI
                                              benefits to workers who are not normally eligible, including the self-
                                              employed, gig workers, and independent contractors.25 Because PUA
                                              was only available to claimants not eligible for regular UI, states had
                                              to make a UI determination first. U.S. DOL allowed states to use a
                                              single application for regular UI and PUA. By adding questions to
                                              their existing regular application, a state could evaluate claimants for
                                              PUA as soon as it determined they were ineligible for regular UI. A
                                              claimant was not required to take additional action.
                                              GDOL used separate applications for each claim type, which required
                                              claimants to first apply for and be denied for regular UI before they
                                              could apply for PUA. Additionally, some claimants appealed the
                                              regular UI decision before they were approved for PUA, which
                                              contributed to the backlog of appeals. GDOL indicated it had already
                                              begun creating a separate PUA application and did not adjust plans
                                              when U.S. DOL updated its guidance.
                                         •    Use of Reconsiderations and Redeterminations – If a claimant
                                              disagrees with a monetary or nonmonetary determination, they can
                                              request a reconsideration or redetermination, respectively.
                                              Reconsiderations or redeterminations require fewer resources than an
                                              appeal and provide GDOL staff the opportunity to educate claimants


      25 Georgia ended its participation in PUA and other federal programs effective June 27, 2021.
GDOL’s Unemployment Insurance Pandemic Response                                                                      50




                                              on the eligibility decision, which can reduce an appeals backlog.26 The
       Reconsideration –                      options would have been particularly helpful during the pandemic,
       Additional review of a                 when GDOL reported difficulty hiring appeals officers with the
       monetary determination                 necessary experience and/or legal background. By contrast,
                                              reconsideration or redetermination is handled by the claims
                                              processors or examiners who made the initial decision.
       Redetermination –
                                              While Georgia does allow for reconsideration or redetermination, it
       Additional review of a
                                              does not sufficiently notify claimants of this option. Rather, GDOL’s
       nonmonetary
                                              determination letters indicate the decision is final unless the claimant
       determination
                                              files an appeal within 15 days. The claimant handbook and the initial
                                              application’s confirmation page mention the option for
                                              reconsideration if wage information is incomplete, but GDOL does not
                                              notify claimants of the option for redetermination.
                                              It should be noted that a request for reconsideration or
                                              redetermination must be filed within 15 days of the decision, so it
                                              cannot be used retroactively to address the current appeals backlog.
                                              (As of October 28, 2021, approximately 61,000 appeals were awaiting
                                              processing, although some portion will be determined invalid.)

                                 In addition to the items discussed above, some states reduced eligibility reviews
                                 to speed benefit payments; however, this led to overpayments and increased
                                 fraud. For example, California and Virginia suspended review of several eligibility
                                 issues, such as determining whether a claimant who reported voluntarily quitting
                                 a job did so with good cause. As a result, some ineligible claimants were paid
                                 benefits. Because U.S. DOL did not waive these eligibility requirements, states
                                 that took these or similar actions must review these past questionable claims,
                                 which redirects resources from claims processing. Claimants found ineligible
                                 typically must repay their benefits, which they may have already spent.
                                 Additionally, states with significantly relaxed eligibility reviews became easier
                                 targets for organized fraud. If reviewed claims are found to be fraudulent, the
                                 agencies may be unable to recover the benefits paid.

                                 Unlike some other states, GDOL did not reduce its eligibility reviews. While
                                 conducting the reviews required time and resources, it likely prevented payments
                                 to ineligible claimants and reduced the likelihood of fraud.


                                     RECOMMENDATION
                                             1.    GDOL should include language in the determination letters to
                                                   notify claimants of the option to request a redetermination or
                                                   reconsideration.


                                     Agency Response: “GDOL agrees it adjusted policies and these changes
                                     greatly helped GDOL process claims more quickly.” It pointed to employer-


      26 A claimant can still request an appeal after a reconsideration or redetermination.
GDOL’s Unemployment Insurance Pandemic Response                                                                     51




                                    filed claims and work search waiver included in the finding, as well as IT-
                                    related changes noted on page 29.
                                    GDOL disagreed that a single application for UI and PUA would have
                                    reduced processing times, arguing it would have delayed the launch of the
                                    PUA program and slowed down the process for those not filing for PUA. It
                                    also stated that the report contained no evidence that a single application
                                    reduced processing times in other states.
                                    Recommendation: GDOL disagreed with the recommendation to notify
                                    claimants of the option for redetermination or reconsideration. It stated the
                                    language is already included in the monetary determination letter and
                                    indicated that a pilot of redeterminations was counterproductive and
                                    unsuccessful. It stated that greater use of the redetermination or
                                    reconsideration process would not save time but only shift work from one
                                    unit to another.
                                        Auditor’s Response: Both the monetary and nonmonetary
                                        determination letters tell claimants that GDOL’s determination is final
                                        unless an appeal is filed. There was no mention of redetermination or
                                        reconsideration in the sample letters GDOL provided to the audit team.
                                        As noted in the report, other communications mention the option for
                                        reconsideration, but GDOL does not notify claimants of the option for
                                        redetermination, even though it is allowed by state law. Additionally,
                                        GDOL officials regularly pointed to the difficulty in staffing appeals
                                        positions; therefore, shifting some level of work from appeals to claims
                                        examiners seems reasonable.


              Finding 9:        GDOL’s requirement that employers file claims on behalf of certain
                                claimants led to faster processing of many claims but to delays or
                                overpayments in some cases.

                                When unemployment claims began to increase, GDOL required employers to file
                                claims for employees with reduced hours or temporary layoffs due to lack of
                                work. The change shifted responsibility for the claim from claimant to employer,
                                which eliminated some verification steps and allowed GDOL to process claims
                                more quickly. However, if employers did not file as required or had incomplete
                                information on their employees, payment delays or improper payments could
                                occur.

                                In March 2020, GDOL issued emergency rules that expanded the use of
                                employer-filed claims (Exhibit 21). Before the pandemic, employers could file
                                unemployment claims for their full-time employees during periods of partial
                                unemployment, when the employee’s hours are reduced to less than full-time or
                                when the employee is laid off temporarily. These employer filings were optional
                                and could be filed online or by mail. However, during the pandemic, GDOL
                                required employers to file online for all applicable employees, including part-time
                                employees. At the outset of the pandemic, GDOL implemented multi-claimant
                                upload capabilities that allowed employers to file online for multiple employees
                                simultaneously by uploading a spreadsheet, instead of submitting a separate form
                                for each employee or mailing a disk with multiple employee claims.
GDOL’s Unemployment Insurance Pandemic Response                                                                                52




                                 Exhibit 21
                                 GDOL Expanded Employer-Filed Claims During the Pandemic
                                                                           Pre-Pandemic               During Pandemic1
                                  Applicable claimants                                             Full-time and part-time
                                                                      Full-time employees
                                                                                                   employees
                                  Work status                                  Reduced hours or temporary layoff
                                  Maximum weeks for                   Typically 6, up to 10
                                                                                                   Unlimited
                                  temporary layoffs                   may be allowed
                                  Employer filing                     Optional                     Required
                                  Filing method                       Online or mail               Online only
                                  Reason for unemployment                                  Lack of work
                                  1
                                   Table shows rules in place at the beginning of the pandemic. In July 2020, employers were
                                  no longer required to file for part-time employees, and pre-pandemic requirements were
                                  fully reinstated in March 2021.

                                  Source: GDOL rules



                                 The rule change increased the proportion of claims filed by employers. GDOL
                                 reported that the percentage of claims filed by employers rose from
                                 approximately 47% of claims in January and February 2020 to 73% of claims in
                                 March to May.

                                 Expanding employer-filed claims helped reduce the claims backlog by allowing
                                 GDOL to process claims more quickly with fewer staff resources. For these
                                 claims, the employer acknowledges that a lack of work led to the reduced hours
                                 or temporary separation, which eliminates the GDOL staff resources and time
                                 needed to verify the claimant is unemployed through no fault of their own.27 This
                                 would allow claimants to receive their first payments more quickly. Additionally,
                                 a May 2020 change allowed claimants who were permanently laid off to take over
                                 their employer-filed claims. This conversion eliminated the previous need for
                                 claimants to refile their own claim and restart the process.

                                 While employer-filed claims helped speed claims processing, it created problems
                                 for some claimants. As described below, payments were delayed when employers
                                 did not certify each week as required, and some ineligible individuals received
                                 payments when an employer filed on their behalf. GDOL could not provide the
                                 audit team the data necessary to evaluate the extent of these issues.

                                          •   Payment Delays – Claimants experienced interruptions in their
                                              benefit payments when employers did not consistently certify on their
                                              behalf. Employers were required to certify weekly that their employees
                                              were still eligible for unemployment. Some employers instead certified
                                              based on their payroll cycle (e.g., biweekly) or stopped certifying
                                              entirely. Because the claim was filed by the employer, the claimant
                                              could not certify on their own behalf. Instead, the claimant was

      27 When a claim is filed by the claimant, staff typically request a separation form from the claimant and/or send the

      employer a questionnaire to be returned within 10 days. A claims examiner may also interview claimants and employers
      before approving or denying the claim.
GDOL’s Unemployment Insurance Pandemic Response                                                                       53




                                            instructed to contact their employer to either resolve the issue or
                                            request the claim be converted to an individual claim.
                                        •   Overpayments – Some individuals with employer-filed claims
                                            received benefits even though they were not eligible. During weekly
    Claimants laid off
                                            certifications, employers were asked to attest that their employees had
    from part-time jobs
                                            no additional earnings. However, employers may not have devoted the
    received benefits,
                                            resources to ensure they had this information. As a result, some
    despite having other,
                                            claimants incorrectly received benefits, despite having other
    full-time employment
                                            employment that should have disqualified them.
                                            Overpayments impact both GDOL and the recipients. If claimants
                                            received benefits they were not eligible for, GDOL staff must
                                            investigate and request the benefits be repaid. Additionally, claimants
                                            must pay taxes on unemployment benefits. Primarily due to this issue,
                                            GDOL created a portal for claimants to report and repay
                                            overpayments in February 2021.

                                These problems can largely be attributed to the design that shifted primary
                                responsibility for claim filing and weekly certifications from claimants to
                                thousands of employers. Employers did not have the same incentive as claimants
                                or the knowledge of claimants’ other sources of income. While GDOL provided
                                guidance to employers, if even a small portion of employers did not adhere to the
                                guidelines, a significant number of claimants could be impacted. In December
                                2021, GDOL modified the employer-filed claim process to require additional
                                claimant responsibility prior to payment. Claimants must verify their identity and
                                answer other questions, though employers remain responsible for weekly
                                certification of continuing claimant eligibility.

                                    Agency Response: “GDOL agrees that ‘employers file claims on behalf of
                                    certain claimants led to faster processing’ but disagrees that it led to delays
                                    or overpayments in some cases.” GDOL stated that delays only resulted if
                                    employers entered incorrect information or did not certify, and it indicated
                                    that the overwhelming majority did not have any issues. “When an
                                    employer stopped filing, it was usually because the claimant refused to
                                    return to work.” GDOL also indicated that, during the pandemic, 80% of
                                    overpayments were associated with claimant errors and 5% from employer
                                    errors.

                                        Auditor’s Response: The report clearly describes the issues that
                                        individuals experienced related to employer-filed claims, including those
                                        GDOL mentioned in its response. The audit team intended to evaluate
                                        the extent of these problems, but due to data limitations described on
                                        page 16, we were unable to do so. The figures cited by GDOL may
                                        provide insight into the extent to which employer errors contributed to
                                        overpayments, though we do not have enough information to validate
                                        the classification of errors. In addition, the figures cited relate to
                                        overpayments, not to any payment delays experienced by claimants.
GDOL’s Unemployment Insurance Pandemic Response                                                                     54




              Finding 10:       Career center closures allowed staff to focus on claims processing but
                                increased challenges for claimants.

                                GDOL career centers have been closed to the public since March 2020. While
                                GDOL contends the closures better served UI claimants because staff could focus
                                on claims processing, individuals were also unable to access career center
                                resources or to seek answers to UI claim questions.

                                GDOL operates 41 career centers28 that typically provide in-person UI claims
                                assistance and re-employment services throughout the state. Re-employment
                                activities include holding job search workshops, assisting with resumes, and
                                providing veterans-specific services. Individuals could also visit a career center to
                                file UI claims using on-site computers, ask questions about their claim, or submit
                                required documentation to support a claim. According to GDOL staff, most other
                                states do not have similar in-person UI services.

                                GDOL closed its career centers to the public on March 18, 2020—four days after
                                the governor declared a public health state of emergency. GDOL indicated the
                                career centers were closed to allow staff to focus on processing claims and
                                communicating with claimants via phone and email. Additionally, the closures
                                helped protect the health and safety of agency staff and the public. GDOL has
                                since reopened some career centers on an appointment basis. While the plan was
                                to provide only re-employment services, GDOL officials said that both re-
                                employment and UI services may be provided.

                                While GDOL indicated that career centers are not necessary for UI, claimants

      46%                       visited career centers more than 600,000 times in 2019 and filed many claims in
                                person. Before the pandemic began (2017-2019), the largest proportion (46%) of
                                initial UI claims were filed at the career centers. During the pandemic, however,
      UI filings made           filing shifted primarily to online claims and GDOL-mandated employer filing.
     in career centers          The percentage of claims originating by phone remained relatively small.
          prior to
         pandemic               While GDOL indicated it could assist claimants more efficiently remotely than in
                                person, career center closures created challenges for those filing claims. For
                                example:
                                        •   Eliminated Source for Answers – In addition to eliminating a
                                            method by which claims could be filed, career center closures removed
                                            a source of contact for claimants with questions or concerns. Without
                                            the career centers, claimants could attempt to contact GDOL via
                                            phone, email, or web inquiry. However, claimants reported that they
                                            were frequently unable to reach GDOL through these methods and
                                            that career center phone numbers went straight to voice mail. As
                                            discussed in the finding on page 56, GDOL officials acknowledge that
                                            they were overwhelmed by the volume of contacts, which made it
                                            difficult for many claimants to obtain or share necessary information.


      28 One career center in Cairo was closed permanently during the pandemic.
GDOL’s Unemployment Insurance Pandemic Response                                                                     55




                                        •   Less Secure Documentation Submission – Before the
                                            pandemic, GDOL frequently required claimants to visit career centers
                                            to provide certain documents, such as an employer separation form or
                                            identity verification, which may include the claimant’s Social Security
                                            Number or confidential tax or wage information. Because claimants
                                            had previously provided GDOL these documents in person, many
                                            documents were sent via less secure methods, such as email or fax.
                                            GDOL has since implemented ID.me for most identity verification and
                                            created an option on the claimant portal to upload certain documents,
                                            such as PUA income verification. However, other sensitive documents
                                            are still sent via email or fax.
                                        •   Reduced Access to Technology - In addition to filing UI claims,
                                            individuals may use career center computers to prepare resumes,
                                            conduct job searches, and research employers. For individuals without
                                            internet access and computers, the closures presented a particular
                                            hardship. Poor and rural individuals are most likely to lack these
                                            resources and would have been most affected by the closures. GDOL
                                            indicated staff provided some re-employment services virtually.

                                It should be noted that GDOL did not update all communications with the closure
                                information, as noted on page 46. As a result, claimants were still directed to visit
                                career centers to file certain types of claims or provide required documentation.

                                    Agency Response: GDOL disagreed with the use of the term “closed” and
                                    stated that the career centers continued to provide services throughout the
                                    pandemic. It indicated it was better able to meet customers’ needs by
                                    transitioning “from a primarily in-person service delivery model to the
                                    more modernized virtual model used by most states.” It further stated it
                                    “carefully evaluated, strategically adjusted, and intentionally implemented
                                    a modernized service delivery model throughout the pandemic.”
                                    GDOL contended that the new model had a number of benefits. It allowed
                                    the agency to address the volume of claims and protected both staff and the
                                    public from greater exposure to the COVID-19 virus. The agency noted that
                                    it received many violent threats, that staff were threatened while leaving
                                    career centers and within the community, and gunshots were fired into
                                    career centers at night. “In light of these challenges, GDOL stands by the
                                    service delivery model throughout the pandemic, having leveraged virtual
                                    and in-person services as the situations required.”
                                    Finally, GDOL noted that other agencies were still closed to the public but
                                    GDOL “resumed in person appointments at career centers in October 2021.”
                                    GDOL later added that it will serve individuals who show up at a career
                                    center without an appointment.
                                        Auditor’s Response: The finding is intended to acknowledge both
                                        GDOL’s reasoning for closing the career centers to the public and the
                                        impact it had on claimants, not to advocate for a particular approach.
                                        Because the career centers had been an integral part of GDOL’s UI
                                        processes before the pandemic, the sudden elimination of in-person
                                        services would clearly impact those who had used or depended on them.
GDOL’s Unemployment Insurance Pandemic Response                                                                                    56




              Customer Service
              Finding 11:       The need for claimant assistance grew exponentially during the pandemic,
                                but many claimants were unable to obtain a response.

                                As claims surged during the pandemic, claimant inquiries to GDOL increased
                                significantly. Many claimants were unable to contact GDOL using any channel
                                (phone calls, emails, and web inquiries), leading to claimant frustration and more
                                inquiries. It also likely led to the filing of duplicate claims and unnecessary
                                appeals. While some information is available on the volume of contacts, GDOL
                                does not track whether most claimants receive a response to their inquiries. This
                                prevented us from a comprehensive evaluation of response rates and timeliness.

Based on web                    Claimants needing assistance can use a variety of methods to contact GDOL. This
inquiries, claimants            includes calling one of the local career centers or a central UI unit (e.g., appeals,
had questions about             interstate claims), as well as scheduling a callback appointment to speak with a
benefit amounts,                staff member. Claimants can also send an email, web inquiry, or fax to a career
payment issues, claim           center or central UI unit. As described below, the volume of requests across all
status, and PUA.                channels increased significantly during the pandemic.

                                While data is not available to evaluate GDOL’s responsiveness,29 news reports
                                indicate many claimant inquiries were unaddressed. Additionally, thousands of
                                web inquiry comments indicated that claimants were unable to reach GDOL
                                through any method. GDOL staff indicated the agency did not have the capacity
                                to answer every inquiry due to the unprecedented volume. Factors discussed in
                                other findings—such as delays in processing, limited information about claim
                                status, and unclear communications—contributed to the volume increase.

                                Unaddressed inquiries about claim status likely led to claimant frustration,
                                improper denials, and additional work for GDOL. Many claimants unable to
                                reach GDOL staff filed duplicate claims or invalid appeals (before there was a
                                determination to appeal) in an attempt to obtain benefits. Other claimants were
                                unable to reach staff to provide information needed for claims processing, which
                                could lead to a denial based on incomplete information and an appeal of that
                                decision. Both situations resulted in frustrated claimants, payment delays, and
                                additional work for GDOL.

                                Phone Calls
                                GDOL experienced a significant increase in call volume when the pandemic
                                began. As shown in Exhibit 22, GDOL received millions of calls during the
                                pandemic. In March 2020, the number of calls reached approximately 635,000 —
                                nearly six times more than the prior month’s total. Volume grew to 9.4 million
                                calls in April and remained above 9.0 million in May. Answering all calls received
                                in April would have required each of the 670 career center and central UI benefits
                                staff members to answer approximately 672 calls per day, in addition to

      29 GDOL provided volume data for most contact types (with the exception of fax). However, it could not provide data to

      calculate response rates for methods other than phone calls. Staff generally respond to web inquiries and emails by phone,
      but data limitations prevented us from matching the outgoing calls to the original inquiries.
GDOL’s Unemployment Insurance Pandemic Response                                                                                     57




                                  processing claims. As noted in the exhibit, call volume was not available for much
                                  of the pandemic. GDOL could not provide data on calls received between June
                                  2020 and February 2021, and the data provided for subsequent months was not
                                  reliable because GDOL stopped tracking certain types of calls, as discussed below.

                                  Exhibit 22
                                  UI Call Volume Increased Significantly Early in the Pandemic,
                                  January 2020 – May 20201


                                                               Pandemic Begins
                                                                            9,448,205




                                                                                                   Data Not          Data Not
                                                                                                   Available          Reliable

                                                                                                    June 20 -           March -
                                                                                                      Feb 21            May 21


                                           158,873


                                            Jan        Feb        Mar         Apr         May                     Mar         May

                                                                  2020                                            2021
                                      1
                                       GDOL staff said data was not available for June 2020 to February 2021, due to data
                                      storage issues, and data for subsequent months did not include all calls. It should also be
                                      noted GDOL could not verify the accuracy of incoming call data provided.

                                      Source: GDOL call data



                                  During the first half of 2020, most calls went unanswered; however, data
                                  limitations prevented us from evaluating call outcomes for later time periods. In
                                  the two months before the pandemic began, GDOL answered approximately 19%
                                  of incoming calls—most calls (67%) were sent to voice mail. The answer rate fell
                                  early in the pandemic, with only 4% of calls being answered by GDOL staff.30
                                  Most calls (78%) never reached a person or voice mail due to system capacity.
                                  These calls are shown as Not Connected in Exhibit 23. GDOL staff indicated
                                  that they expanded system capacity in May 2020 and hired additional dedicated
                                  customer service staff in April 2021. We were unable to verify the impact of these
                                  actions. GDOL stopped tracking calls that were Not Connected or Abandoned
                                  (i.e., caller hung up), so the current percentage of calls that GDOL answered or
                                  sent to voice mail is unknown.




      30 It should be noted that many other states had low answer rates during the pandemic. For example, Virginia answered 6%

      of calls it received in June 2020.
GDOL’s Unemployment Insurance Pandemic Response                                                                                     58




                     Exhibit 23
                     Most Calls Went Unanswered Before and During the Pandemic, January 2020 – May 20201

                                                      Pandemic Begins


                                                         9%
                                             16%

                                                                    42%

                                                                                                     Data Not         Data Not
                                                                                 77%        81%     Available           Reliable
                            Not Connected
                                                        71%
                                             64%

                            VM                                                                       June 20 -          March -
                                                                    49%                                Feb 21           May 21

                            Answered
                                                                                 19%        15%
                                             19%        19%
                                                                    8%      3%         4%

                                             Jan        Feb         Mar          Apr        May                   Mar         May

                                                                   2020                                          2021
                        1
                         GDOL staff said data was not available for June 2020 to February 2021 due to data storage issues, and
                        data for subsequent months did not include all calls. It should also be noted GDOL could not verify the
                        accuracy of incoming call data provided. Additionally, the percent of abandoned calls (i.e., caller hung
                        up) was less than 1% and thus too small to show in the above chart.
                        Source: GDOL call data



                                 Data limitations also prevented us from analyzing additional call performance.
                                 GDOL does not track the calls it makes in response to voice mails, preventing us
                                 from evaluating response rates and timeliness. GDOL also does not track hold
                                 times.




                                 Scheduled appointments with GDOL were difficult to obtain
        In November 2020, GDOL created an online appointment system that guarantees a callback from GDOL staff to
        further assist claimants. Beginning each Monday at 8:00 a.m., individuals can schedule an appointment using
        GDOL’s online Dynamic Scheduler on a first-come, first-serve basis. The number of appointments each week is
        contingent upon staff schedules.

        Between November 2020 and July 2021, there were approximately 38,200 Dynamic Scheduler callback
        appointments—an average of 980 calls per week. However, the limited number of appointments filled up quickly,
        typically within 10 minutes. By late September 2021, appointment scheduling windows stayed open for several
        hours, which likely indicates it had become easier to reach GDOL staff.

        Approximately 5,200 appointments were scheduled for November 2020 (when slots first became available). This
        dropped 20% to approximately 3,800 by July 2021. GDOL staff indicated that the number of appointments were
        reduced so that staff could better manage the incoming career center calls.
GDOL’s Unemployment Insurance Pandemic Response                                                                 59




                                Web Inquiries
                                Claimants can also request assistance by submitting contact forms, or web
                                inquiries, posted on GDOL’s website. Completed forms are directed to specific
                                offices or subjects and are forwarded to the respective GDOL email inbox.

                                The number of web inquiries GDOL received grew significantly at the onset of the
                                pandemic. As shown in Exhibit 24, between March 2020 and May 2021, GDOL
                                received approximately 1.3 million UI web form inquiries. The number of
                                submissions increased from nearly 1,800 in February 2020 to nearly 150,000 in
                                April.

                                Exhibit 24
                                Web Inquiries Increased Significantly at the Beginning of the Pandemic,
                                January 2020 - May 2021




                                       Source: GDOL web inquiry form data



                                Emails
                                Due to GDOL’s retention policy, we were unable to analyze the number of emails
                                received in the early months of the pandemic. As shown in Exhibit 25, however,
                                we estimate that GDOL received an average of 48,000 emails between December
                                2020 and May 2021, with monthly decreases beginning in June 2021. (As shown
                                in Exhibit 24, for a similar method of written communication to GDOL—web
                                form inquiries—early 2021 volume was less than half of the peak in the spring of
                                2020.) This estimate is based on a sample of 17 career centers and all central UI
                                email inboxes.
GDOL’s Unemployment Insurance Pandemic Response                                                                                    60




                          Exhibit 25
                          Email Volume Fell in Mid-2021, December 2020 - September 20211

                                    Pandemic Begins                                                      50,910



                                                                                    44,161




                                               Data Not Available
                                                                                                                          21,979




                                  Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

                                                        2020                                             2021
                              1
                               GDOL staff indicated that email data was not retained for earlier months and therefore was
                              not available for analysis. Additionally, these values were estimated based on a sample of 17
                              career centers and all central UI email inboxes.
                              Source: GDOL email data




                                      Agency Response: “GDOL agrees that the need for claimant assistance
                                      grew exponentially during the pandemic.” It stated that it was not able to
                                      answer every live call but “returned voice mails, met with claimants
                                      virtually, responded to emails, and had live chats with claimants.” It further
                                      stated that when the agency responds to phone calls by another method
                                      (e.g., email), the phone system would not capture the response.
                                      GDOL stated that it had implemented new call software just prior to the
                                      pandemic and the contracted storage was quickly filled when the surge in
                                      calls occurred. When the system was upgraded, the vendor did not turn on
                                      an important reporting mechanism, causing potential inaccuracies in the
                                      data. GDOL did not believe accuracy of the call data analysis showing 78%
                                      of calls were dropped.
                                      GDOL stated that customers were calling phone lines beyond those used in
                                      the analysis; therefore, the incoming call volume was “most likely
                                      exponentially higher than what was used…which would make the
                                      percentage of calls answered and serviced significantly higher than any
                                      analysis has captured.”

                                              Auditor Response: The audit team used call data and data
                                              definitions provided by GDOL and discussed the methodology with
                                              agency staff in advance. The staff expressed no concerns. Results
                                              were shared with UI management, though they acknowledged they
GDOL’s Unemployment Insurance Pandemic Response                                                                        61




                                            did not know the agency’s call volume or outcomes (see need for data
                                            discussed in finding 2) and could not speak to the accuracy of the
                                            results. We deemed the call periods reported to be sufficiently
                                            reliable, partly due to the consistency with GDOL statements (large
                                            increase in calls, calls not connected, few calls answered). GDOL
                                            officials are unable to determine the accuracy of the results because
                                            they were not monitoring customer service data when we began our
                                            inquiry.




              Finding 12:       GDOL does not have systems in place to track claimant inquiries, which
                                leads to unfulfilled requests, delays in claims processing, and additional
                                inquiries.

                                GDOL does not have systems in place to ensure that claimant inquiries have been
                                effectively and efficiently addressed. The large volume of inquiries during the
                                pandemic coupled with a decentralized customer service system led to customer
                                service failures. While many claimants’ emails, web inquiries, and voice mails
                                went unanswered during the pandemic, others may have received responses from
                                multiple GDOL staff.

                                GDOL has a strategic goal to provide claimants with high-quality and responsive
                                services that exceed customer expectations. For UI, this means operating a
                                system that ensures claimants understand whom to contact and that their
                                inquiries receive a timely response. Many organizations centralize incoming calls
                                to fewer phone numbers, then redirect the call to the most appropriate personnel
                                to receive and respond to the request.

                                GDOL does not currently have a customer relationship management (CRM)
                                system to monitor claimant communications. Without a dedicated system for
                                tracking customer responses, staff instead review notes in the UI claims
                                management system to determine whether a claimant has been contacted. Some
                                claimants received multiple follow-up calls from different staff if the call was not
                                documented, they had not yet filed a claim, or notes were unclear. This caused
                                confusion for claimants and duplication of effort for GDOL staff. Many other
                                claimants did not receive any response—for example, approximately 227,000
                                claimants sent multiple web inquiries, indicating their first inquiry was not
                                addressed.

                                Ensuring that all customer inquiries are addressed is made more challenging by
 GDOL publishes                 the large number of contact points for the public. While other states’ labor
 more than 150 UI               departments and Georgia agencies have centralized contact information, GDOL
 contact points                 publishes more than 150 UI contact points on its website and in correspondence.
                                The large number of contact methods encourages claimants to call multiple
                                phone numbers and email multiple career centers.
GDOL’s Unemployment Insurance Pandemic Response                                                                      62




                                During the pandemic, claimants reached out to several different points of contact
                                requesting assistance, which created additional work for GDOL staff. For
                                example, approximately 610,000 claimants called more than one GDOL phone
                                number between January and May 2020. As shown in Exhibit 26, this increased
                                the volume of inquiries and led to duplication of effort, which further strained
                                staff resources needed to process claims and respond to contacts. As discussed on
                                page 56, unanswered claimant inquiries led to processing delays, duplicate
                                claims, and invalid appeals.

                 Exhibit 26
                 Decentralization Increased Contact Volume and Caused Confusion for Claimants




                    Jane was approved for benefits but still has not received a payment. She submits a web form
                                      inquiry to her local career center about her lack of payments.




                     After receiving no response, Jane resends the same web form inquiry to 10 career centers,
                                                  further adding to the volume of contacts.




                       Jane receives a response from three GDOL employees at three different career centers.

                  Source: Hypothetical scenario based on GDOL web inquiry data & staff interviews



                                GDOL attributed the lack of tracking to limited funding and antiquated
                                technology. However, staff indicated they are taking steps to create a centralized
                                UI number and implement an integrative CRM system that will track responses.

                                It should be noted that tracking responsiveness will enable GDOL to better
                                monitor customer service operations, which will help inform management
                                decisions regarding staff workloads and hiring. This can further improve
                                responsiveness.


                                    RECOMMENDATIONS
                                            1.     GDOL should develop a system to track which contacts have
                                                   received a response to ensure timely responses and to minimize
                                                   duplication of effort.
GDOL’s Unemployment Insurance Pandemic Response                                                                        63




                                           2.     GDOL should centralize communications to improve efficiency.


                                    Agency Response: “GDOL agrees customer service system limitations did
                                    not permit comprehensive tracking of claimant inquiries,” but it stated that
                                    it “lacked sufficient funding prior to the pandemic to upgrade the
                                    telecommunications system.”

                                    Recommendation 1: GDOL agreed and is implementing an improved
                                    customer service system. “The solution leverages artificial intelligence,
                                    telephony software and hardware upgrades, and the implementation of a
                                    customer relationship management system. This multi-tool approach will
                                    allow GDOL to better serve customers by enhancing self-service options,
                                    leveraging technology to strategically route customer inquiries to staffing
                                    resources, and increasing data collection on customer communications and
                                    response.”

                                    Recommendation 2: GDOL noted that it is “currently implementing
                                    centralized call scheduling which will route calls to available staff
                                    throughout the state, not just the central office, to reduce call waiting time.”
                                    GDOL reported that it is using federal pandemic funding for the upgrades.
GDOL’s Unemployment Insurance Pandemic Response                                                                        64




                                    Appendix A: Table of Recommendations
           Finding 1: Benefit payment delays were driven by unprecedented volume, limited automation of
           claims processing, and other factors. (p. 12)

           No recommendations

           Finding 2: GDOL lacks information that would assist UI program management with planning and
           decision making. (p. 20)

           1.   To manage the UI program more systematically, GDOL should collect additional information and
                ensure all information is reliable and accurate.

           Finding 3: A documented plan would help GDOL better manage future increases in claim
           volume. (p. 24)

           2.   To prepare for future increases in claim volume, GDOL should create a formal recession plan that
                considers lessons learned during the pandemic.

           Finding 4: While GDOL has made key updates to its claims management system, the system
           could better facilitate claims processing and communication with claimants. (p. 28)

           3.   GDOL should increase automation of its claims processing.

           4.   GDOL should continue to improve its communications with claimants through the portal—particularly
                with regard to status updates and document submission.

           5.   The General Assembly should consider additional funding to upgrade/modernize GDOL’s UI system.

           Finding 5: The number of GDOL employees has declined over time, resulting in fewer
           employees to address the surge in claims. (p. 34)

           No recommendations

           Finding 6: GDOL’s staffing actions to address the claims increase were similar to strategies
           used by other state UI programs. (p. 35)

           6.   GDOL should work with the General Assembly to create an exception to the retiree work limit during
                periods of high unemployment. In future situations like the public health emergency, GDOL could work
                with the Office of the Governor to include a waiver in any related executive order.

           Finding 7: Information available to claimants was not always clear and accurate, which
           contributed to application errors, processing delays, and increases calls and emails from
           claimants. (p. 43)

           7.   GDOL should identify and implement ways to make the application process clearer for claimants (e.g.,
                clarifying language for questions).

           8.   GDOL should provide plain language explanations in its determination letters.

           9.   GDOL should use surveys or focus groups to test the clarity of language with claimants and/or
                employers.
GDOL’s Unemployment Insurance Pandemic Response                                                                   65




           10. When changes are made to processes, GDOL should ensure all communications are updated to
                 claimants understand what steps they should follow.

           Finding 8: GDOL adjusted policies to reduce claims processing times but could have considered
           additional steps. (p. 48)

           11.   GDOL should include language in the determination letters to notify claimants of the option to
                 requires a redetermination or reconsideration.

           Finding 9: GDOL’s requirement that employers file claims on behalf of certain claimants led to
           faster processing of many claims but to delays or overpayments in some cases. (p. 51)

           No Recommendations

           Finding 10: Career center closures allowed staff to focus on claims processing but increased
           challenges for claimants. (p. 54)

           No recommendations

           Finding 11: The need for claimant assistance grew exponentially during the pandemic, but many
           claimants were unable to obtain a response. (p. 56)

           No recommendations

           Finding 12: GDOL does not have systems in place to track claimant inquiries, which leads to
           unfulfilled requests, delays in claims processing, and additional inquiries. (p. 61)

           12. GDOL should develop a system to track which contacts have received a response to ensure timely
                 responses and to minimize duplication of effort.

           13. GDOL should centralize communications to improve efficiency.
GDOL’s Unemployment Insurance Pandemic Response                                                                  66




                            Appendix B: Objectives, Scope, and Methodology

      Objectives
      This report examines the unemployment insurance (UI) program at the Georgia Department of Labor
      (GDOL). Specifically, our examination set out to answer the following questions:

          1. How long did GDOL take to process claims for each UI program?

          2. Did GDOL take reasonable steps to adjust staffing and training in response to the high volume
             of UI claims during the pandemic?

          3. Did technological challenges impact GDOL’s timeliness of claims processing?

          4. Did claimants have access to clear and sufficient communications from GDOL?

          5. Did GDOL respond to contacts from claimants in a timely manner?


      Scope
      This special examination generally covered activity related to UI claims filed January 2020 through
      June 2021, with consideration of earlier or later periods when relevant. Information used in this report
      was obtained by reviewing relevant laws, rules, and regulations; interviewing GDOL officials and staff;
      reviewing agency documents; analyzing data and reporting from GDOL; conducting a career center site
      visit, including observing staff process claims; reviewing media coverage of UI during the pandemic;
      reading industry publications and audits conducted in other states; reviewing other states’ UI websites
      and documents; and interviewing UI staff in other states.
      Government auditing standards require that we also report the scope of our work on internal control
      that is significant within the context of the audit objectives. We reviewed internal controls as part of our
      work on Objectives 1 and 5. This work was related to understanding how GDOL’s internal controls
      affected the timeliness of claims processing and the quality of the customer service data. The work
      provided context for multiple findings, but it also resulted in a finding about the inadequate
      management information and monitoring, as well as a finding about insufficient communication with
      claimants.
      We were unable to fully address objectives 1 and 5 due to data limitations. As described below and
      throughout the report, GDOL either did not have data, provided data that was not reliable, or was
      unable to provide data in the timeframe required for the report. In addition, we could not conduct
      significant on-site visits due to COVID-19 precautions and cases at GDOL, limiting our ability to obtain
      complete and timely information from staff at all levels. Finally, limited written documentation
      available from GDOL (e.g., documentation of claims processes, strategies used during the pandemic)
      led to greater reliance on testimonial evidence.

      Methodology
      To evaluate how long it took GDOL to process claims, we requested GDOL provide claims data
      that would allow for a comprehensive evaluation of timeliness, as well as factors that may have
      contributed to processing delays. GDOL indicated it would take at least three to four months to provide
      the requested data. Due to the report deadline, the audit team agreed to accept a more limited data set.
      However, as noted on pages 16 and 23, the claims data GDOL provided was not sufficiently reliable for
GDOL’s Unemployment Insurance Pandemic Response                                                                                 67




      analyzing the timeliness of claims processing. The audit team also attempted to use GDOL reporting to
      the U.S. Department of Labor (U.S. DOL) but determined this data was also not sufficiently reliable.
      Without claims data, first payment timeliness was estimated using payment data provided for financial
      audit purposes. We calculated the number of days between each claimant’s first eligible week ending
      date and the check date for the corresponding payment. While this provides information for payments
      made through the date of the data extract (September 2021), additional payments continue to be made
      for claims beginning in the quarters reported, especially for more recent quarters. Additionally, we
      excluded PUA payments for claims with initial eligibility in the first quarter of calendar year 2020. The
      CARES Act allowed for PUA claims to be backdated prior to the passage of the law, so claimants could
      be paid for weeks that occurred well before they were able to file a claim.
      To estimate the number of new initial claims filed during the pandemic, we used unduplicated counts
      from the claims data provided by GDOL. While the claims data was not sufficiently reliable to evaluate
      timeliness, the data provided the best estimate of new initial claims filed.31 Because the data included
      duplicate records, we used unduplicated counts of Social Security Numbers for the periods of March
      2020 to February 2021 and March 2021 to June 2021. We used these two time periods because a
      claimant can have one new initial claim per 12-month period. By using two time periods, we were able
      to include individuals who might have filed a legitimate second initial claim in their new benefit year.
      To determine whether GDOL took reasonable steps to adjust staffing and training, we
      interviewed UI, statewide operations, and human resources personnel. We used Department of
      Administrative Services’ Human Resources Administration data to analyze staffing changes at GDOL
      from fiscal years 2013 through 2021 and TeamWorks HCM data to determine the employee hours
      redirected to UI and overtime, as well as to assess hiring during the pandemic. To determine the
      number of contractor hours spent on UI and IT, we requested that GDOL provide records documenting
      contractor hours for the review period.
      To determine how technology impacted the timeliness of claims processing, we compared
      GDOL’s system capabilities with best practices for UI systems. We identified best practices by reviewing
      industry literature, audits from other states, and federal audits. We also interviewed staff from other
      states’ workforce agencies. To assess GDOL’s system capabilities, we interviewed agency staff, reviewed
      agency documents, and observed staff processing claims while onsite.
      To assess GDOL communications to claimants, we reviewed written communications sent to
      claimants, application screenshots, the claimant handbook, and the GDOL website. To determine the
      reading grade level of the documents reviewed, we used the Flesch-Kincaid grade level tool in Word. We
      also interviewed GDOL staff and read media reports to identify areas of potential confusion. We
      intended to evaluate claimant answers to application questions as part of our review of claims data, but
      data limitations discussed on page 16 prevented us from doing so.
      To determine the impact of career center closures, we reviewed agency documents to determine what
      resources the career centers offered and the level of visitation from UI claimants before the pandemic
      began. To determine how frequently claims were filed in person at the career centers, we reviewed
      Benefit Accuracy Measurement data published on the U.S. DOL website.




      31 As noted on page 22, claim numbers that GDOL reported to U.S. DOL contained significant duplicates, and as such, did not

      provide a reliable source for the number of claims filed.
GDOL’s Unemployment Insurance Pandemic Response                                                                             68




      To determine whether GDOL responded to contacts from claimants in a timely manner,
      we requested responsiveness data from GDOL for phone calls, emails, and web inquiries.32 While we
      analyzed volume across these channels, data was not available to determine responsiveness across most
      channels. As discussed on page 61, GDOL does not track whether staff have responded to voice mails,
      emails, or web inquiries, and available data was not sufficient for us to identify responses.
      For phone calls, GDOL provided incoming call records for UI-related phone numbers for two separate
      time periods: January to May 2020 and March to May 2021. GDOL staff indicated that data for the
      intervening time period was not available because of data storage issues. We used the available data to
      analyze call volume and call outcomes for these time periods; however, data issues affected what we
      were able to report. For example, the data indicated calls that were sent to voice mail but did not
      indicate whether the caller had left a voice mail, so we could not match actual voice mails with
      outbound calls to assess responsiveness. Additionally, there were concerns with the call data that affect
      its reliability. GDOL staff indicated that this data “cannot be assumed to be accurate or complete.” We
      identified problems such as calls that are categorized as “answered” in the middle of the night or that
      only last a few seconds. While we determined the 2020 time period was sufficiently reliable to report,
      we determined that the 2021 data was not, due to missing records. GDOL staff indicated that the agency
      had stopped tracking calls with outcomes of Not Connected or Abandoned, so the call volume and
      outcome analysis results for 2021 were inaccurate.
      For emails, we analyzed data for incoming emails received between December 2020 and September
      2021 for a sample of UI-related inboxes. Due to its retention policy, GDOL no longer had email records
      for earlier time periods. Additionally, GDOL staff indicated it would be a significant logistical challenge
      to pull data for all requested inboxes. As a result, we reduced our request to the five central UI inboxes
      and a sample of 12 career centers and then projected the volume to the remaining 30 career centers.
      While we reported volume, it was not possible to evaluate email responsiveness. GDOL staff typically
      respond to emails via phone, but outgoing call data could not be matched to specific emails.
      For web inquiries, we analyzed data for UI-related inquiries submitted between January 2020 and May
      2021. As with emails, GDOL staff generally respond to web inquiries by phone, so we could not evaluate
      responsiveness.
      We also analyzed call appointment data from GDOL’s online scheduling system (known as the Dynamic
      Scheduler) between its implementation in November 2020 and July 2021. In addition, we monitored
      appointment availability on GDOL’s website between August and October 2021.
      We conducted this special examination in accordance with generally accepted government auditing
      standards, with the exception of obtaining the evidence necessary to fully address objectives 1 and 5 as
      intended and as discussed in the scope and methodology sections above. Those standards require that
      we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis
      for our findings and conclusions based on our audit objectives. We believe that the evidence obtained
      provides a reasonable basis for our findings and conclusions based on our audit objectives.




      32 GDOL staff indicated that claimants also communicated with them via fax; however, the resources required made it

      impractical to pull fax data for analysis.
GDOL’s Unemployment Insurance Pandemic Response                                                                                                                                                                                                                             69




                                                                              Appendix C: Career Center Map
                         Catoosa                                                                           Towns
         Dade                                                          Fannin                                                      Rabun
                                                                                               Union
                                                 Murray
                              Whitfield
                Walker                                            Gilmer
                                                                                                           White      Habersham

                                                                                           Lumpkin
                                                                                                                                        Stephens
            Chattooga                 Gordon
                                                              Pickens
                                                                                  Dawson                                    Banks           Franklin
                                                                                                                                                             Hart
                                                                                                          Hall

                   Floyd                Bartow               Cherokee                Forsyth


                                                                                                                      Jackson                Madison                Elbert

                    Polk
                                                                                                            Barrow
                                                                                           Gwinnett                                 Clarke
                                      Paulding             Cobb
                                                                                                                                                 Oglethorpe
                                                                                                                               Oconee
                  Haralson                                                                                                                                                                  Lincoln
                                                                                                           Walton
                                                                                DeKalb                                                                                   Wilkes
                                             Douglas          Fulton

                         Carroll                                                                                                                Greene
                                                                      Clayton                                               Morgan                                Taliaferro
                                                                                                Newton                                                                                                 Columbia
                                                                                                                                                                                       McDuffie
                                                                                  Henry
                                                            Fayette
                                                                                                                                                                             Warren
                                               Coweta                                                                                                                                                       Richmond
                         Heard                                                                                 Jasper               Putnam
                                                                            Spalding           Butts                                                      Hancock
                                                                                                                                                                                 Glascock


                                                                       Pike
                                                                                  Lamar                                                   Baldwin
                                                                                                Monroe                                                                                                               Burke
                             Troup             Meriwether                                                              Jones                                                                Jefferson
                                                                                                                                                                   Washington


                                                                             Upson                                                            Wilkinson
                                                                                                               Bibb
                                                                                                                                                                                                                     Jenkins
                                      Harris                                                                                                                                                                                          Screven
                                                           Talbot                          Crawford                                                                             Johnson
                                                                                                                                   Twiggs
                                                                                                                                                                                                      Emanuel

                                                                              Taylor                   Peach
                                     Muscogee
                                                                                                                                      Bleckley                Laurens                                                            Bulloch
                                                                                                               Houston                                                               Treutlen                   Candler
                                                                                                                                                                                                                                                      Effingham
                                   Chattahoochee           Marion                       Macon

                                                                        Schley
                                                                                                                            Pulaski
                                                                                                                                                                                                                             Evans
                                                                                                        Dooly                                    Dodge                  Wheeler                   Toombs
                                                                                                                                                                                                                                                Bryan
                                        Stewart
                                                          Webster              Sumter                                                                                                                             Tattnall
                                                                                                                               Wilcox                                                                                                                             Chatham
                                                                                                          Crisp                                               Telfair
                           Quitman                                                                                                                                                                                                          Liberty

                                        Randolph                  Terrell                                                                                                      Jeff Davis
                                                                                     Lee                                                      Ben Hill
                                                                                                                                                                                                  Appling                            Long

                                                                                                                   Turner

                               Clay                                                                                                          Irwin                                          Bacon
                                                   Calhoun                   Dougherty                                                                                                                                       Wayne
                                                                                                       Worth                                                         Coffee                                                                         McIntosh
                                                                                                                            Tift

                                     Early                                                                                                                                                                Pierce
                                                              Baker
                                                                                                                                             Berrien              Atkinson
                                                                                                                                                                                                                                                Glynn
                                                                                Mitchell                                                                                                                                Brantley
                                               Miller                                                   Colquitt
                                                                                                                                   Cook                                                         Ware


                                                                                                                                                         Lanier
                                   Seminole
                                                                                                                                                                         Clinch                                                       Camden

                                                        Decatur               Grady                                                                                                                         Charlton
                                                                                                Thomas                                        Lowndes
                                                                                                                      Brooks

                                                                                                                                                              Echols
GDOL’s Unemployment Insurance Pandemic Response                                                                                70




                                              Appendix D: Timeliness
                         Number of Days from Initial Eligible Week to First Payment 1

       All Programs
                                                  2020                                  2021
                           Jan-Mar*       Apr-Jun      Jul-Sep     Oct-Dec       Jan-Mar     Apr-Jun        Total        %
        Total Claims
        with Payments        356,981       727,100       91,446       32,474      30,914       12,405      1,251,320
        Up to 30 Days        284,106       534,778       57,579       20,126      20,429        6,892       923,910      74%
        31-60 Days            57,038       115,443       17,489         4,517      3,323       2,603        200,413      16%
        61-90 Days             6,929        37,416        5,274         1,409       1,228       1,818        54,074      4%
        91-120 Days            3,235       20,460         4,176         2,627      4,180         843         35,521      3%
        121-150 Days            1,460        5,757       3,288         2,485         813          193        13,996       1%
        151-180 Days            1,174        3,975        1,306          659         459          56          7,629       1%
        More than 180
        Days                   3,039         9,271       2,334            651        482            -        15,777       1%
        *Claims from the first quarter exclude programs from the CARES Act.




       Regular (State) UI
                                                  2020                                  2021
                            Jan-Mar       Apr-Jun      Jul-Sep     Oct-Dec       Jan-Mar     Apr-Jun         Total       %
        Total Claims
        with Payments         356,976      639,200       80,569        31,024      29,994       13,507       1,151,270
        Up to 30 Days         284,108       514,556      54,009        20,149      20,343       7,602        900,767     78%
        31-60 Days             57,033        88,188       14,567        3,523        2,841      2,806         168,958    15%
        61-90 Days              6,929       20,042         3,531         1,215      1,033        1,914        34,664     3%
        91-120 Days             3,234         6,832        3,166        2,548        4,152        922         20,854     2%
        121-150 Days             1,459        2,607       2,647         2,395         737         204         10,049      1%
        151-180 Days              1,174        1,755        927           614         422          59           4,951    0%
        More than 180
        Days                    3,039         5,220        1,722          580         466              -       11,027     1%
GDOL’s Unemployment Insurance Pandemic Response                                                                                        71




                                         Appendix D: Timeliness (continued)
                              Number of Days from Initial Eligible Week to First Payment 1

       Pandemic Unemployment Assistance
                                                        2020                                     2021
                                  Jan-Mar       Apr-Jun      Jul-Sep      Oct-Dec       Jan-Mar       Apr-Jun        Total*     %
           Total Claims
           with Payments            194,602       96,489         11,155          476        6,733          434       115,287
           Up to 30 Days                          24,478         5,947           285        4,600          250       35,560     31%
           31-60 Days                             26,548         2,819            155          981             100   30,603     27%
           61-90 Days                              17,485          991             13         545              53    19,087      17%
           91-120 Days            Data Not         14,223          442              7         252               21    14,945    13%
                                  Reported*
           121-150 Days                             3,386          399              8          182              10    3,985      3%
           151-180 Days                             2,388          228              2           85               -    2,703      2%
           More than 180
           Days                                     7,981          329              6           88               -    8,404      7%
           *Claims with initial eligibility in the first quarter of 2020 were not reported and were excluded from the Total column.
           The CARES Act (passed March 27) allowed for PUA claims to be backdated to weeks ending February 2, so time
           between initial eligibility and first payment could be significantly longer than processing time.
       1
           Difference between first week ending date for benefits and check date. Data as of September 2021. Ongoing
       claims processing and appeals could lead to additional payments that would increase the 50% and 95% levels,
       especially for recent quarters.
       Source: GDOL benefit payment data
GDOL’s Unemployment Insurance Pandemic Response                                                                                                              72




                                                                     Appendix E: Staffing

                         Statewide Operations                                                                              UI Benefits
                            Regular Hours        Overtime Hours                                                     Regular Hours    Overtime Hours
             70                                                                                   70



Thousands                                                                             Thousands
             60                                                                                   60
             50                                                                                   50
             40                                                                                   40
             30                                                                                   30
             20                                                                                   20
             10                                                                                   10
              0                                                                                    0
                  Jan      Apr      July         Oct           Jan      Apr    June                    Jan         Apr       July   Oct      Jan        Apr       June

                                  2020                                 2021                                                2020                       2021



                                                                                UI Tax
                                                                      Regular Hours        Overtime Hours
                                                        70



                                            Thousands
                                                        60

                                                        50

                                                        40

                                                        30

                                                        20

                                                        10

                                                        0
                                                             Jan      Apr      July        Oct               Jan     Apr    June

                                                                              2020                                  2021

                                                    Please note the change in scale in the following charts


                   Departmental Administration                                                                           Labor Market
                           Regular Hours        Overtime Hours                                                     Regular Hours    Overtime Hours
             10                                                                                   10



                                                                                      Thousands
 Thousands
             8                                                                                    8

             6                                                                                    6

             4                                                                                    4

             2                                                                                    2

             0                                                                                    0
                  Jan     Apr      July        Oct             Jan      Apr   June                     Jan         Apr      July    Oct     Jan        Apr    June

                                 2020                                 2021                                                 2020                       2021

                  Source: TeamWorks HCM, GDOL contractor records
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