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Number of delayed California jobless claims grows

LOS ANGELES — The number of Californians left without unemployment insurance checks for weeks because of computer problems was significantly higher than previously thought, according to a newspaper investigation.

The Los Angeles Times (http://lat.ms/1aexm3B ) cites internal Employment Development Department emails that show as many as 300,000 claims were stalled when a software upgrade went online over Labor Day weekend. The EDD previously said 80,000 claimants were affected.

The Assembly Insurance Committee, which oversees California's unemployment benefits program, will hold a hearing before the end of the year to determine what went wrong with a system that cost taxpayers $110 million, almost double the original estimate.

Some blame the EDD's slow response to the problem that created the massive backlog of claims. Others are pointing fingers at contractor Deloitte Consulting. The New York firm has been blamed for similar troubles with upgrades to unemployment software in Massachusetts, Pennsylvania and Florida, the Times said.

Republican Sen. Anthony Cannella has called on the Senate's Labor and Industrial Relations Committee, which oversees the EDD, to investigate the state's Deloitte contract.

In 2003, California estimated it would pay $58 million to upgrade its 30-year-old unemployment benefits system. By the time the state awarded Deloitte the contract in 2010, the cost estimate had grown by more than $30 million.

The EDD handles the largest unemployment insurance program in the country, which doled out $6.6 billion to about 1 million unemployed Californians last year. The software was expected to ease the agency's ability to verify who was eligible to receive benefits.

But troubles arose when the EDD transferred old unemployment data to the new system. The software flagged claims for review, requiring state workers to manually process them.

Officials initially thought the workload would be manageable, but internal emails showed the agency was quickly overwhelmed. For weeks, EDD employees have been working overtime hours to clear the backlog.

Loree Levy, an EDD spokeswoman, told the Times the system is working, processing 80 percent of claims on time. As for the troubles, she said, "There is a period of transition or adjustment with any large infrastructure upgrade like this one.

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Information from: Los Angeles Times, http://www.latimes.com

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