by Scott McClallen
The Michigan Unemployment Insurance Agency has chosen a vendor to design and install a new $78 million computer system to replace its previous system, which was riddled with flaws.
Deloitte will build the new system for filing UIA claims for workers and employers.
The Deloitte system will replace the Michigan Integrated Data Automated System enacted under former Gov. Rick Snyder, which cost Michigan taxpayers an unknown amount of money in settlement fees and outright fraud.
Workers use MiDAS’ Michigan Web Account Manager to file for jobless claims and certify for benefits; employers use MIWAM to pay unemployment taxes and file reports.
According to a settlement, the system cost taxpayers at least $20 million when it falsely flagged thousands of Michiganders for fraud, resulting in seized property without due process between 2013-2015.
“The Unemployment Insurance Agency is working hard every day to improve all the ways that Michigan workers interact with our unemployment system, and that starts with a new computer system that is human-centered and easy to use,” UIA Director Julia Dale said in a statement. “Already, the UIA is in better shape than at any time over the last decade – but that’s not good enough. Michigan workers should be able to apply for benefits with confidence, so they can support their families without worrying about when or if they’ll receive benefits. I am committed to developing a robust and secure system that provides Michiganders with the help they need when they need it.”
The new system is expected to be fully operational in 2025. The projected cost is more than $78 million over a 10-year contract.
Deloitte supports unemployment insurance benefits and tax systems in 15 states, including California, Florida, and Massachusetts. Its Unemployment Framework for Automated Claim & Tax Services system aims to ensure benefits are paid timely and fraud is detected.
As UIA transitions to a new system, workers and businesses should not experience any interruptions in access to MiWAM or the services provided by UIA.
UIA worked with the Department of Technology, Management and Budget to review responses to the agency’s proposal requests, issued earlier this year.
The UIA is attempting to repair the damage to its reputation gained during the pandemic, and even before, of failing to give timely benefits, accusing people wrongly of fraud, and providing help to fraudsters but not eligible Michiganders.
Former UIA Director Steve Gray witnessed Michigan’s unemployment rate spike to 22.7% after Gov. Gretchen Whitmer shuttered much of the economy, citing COVID-19.
Gray resigned on Nov. 5, 2020, and took a then-secret $85,872 severance deal and a confidentiality agreement amid months of record jobless claims. In August 2021, college students testified that despite initial confirmation of benefits, the UIA retroactively billed them as much as $50,000 for reimbursement claims. Another lawyer said the UIA hasn’t paid a client in over 500 days.
Other flubs include the agency hiring people convicted of identity fraud to disburse benefits, not revoking system access after firing employees, and likely losing between $8 billion and $11 billion to fraud over the past few years.
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
