LOUISVILLE, Ky. (WDRB) – Accounting firm Ernst and Young this week began sifting through tens of thousands of backlogged unemployment claims under a contract that some lawmakers criticize for its hefty price tag -- $7.6 million for 26 days of work – and lack of competitive award.
Democratic Gov. Andy Beshear's office said Thursday that Kentucky has nearly 74,000 unprocessed unemployment claims from March, April, May and June – including 6,535 dating to March.
The governor's office said more than 90% of claims have been processed and the state has paid about $3 billion, including federally funded benefits such as the additional $600 per week that is set to expire at the end of the month.
The contract calls for Ernst and Young to add 200 claims processors this week and another 100 – for a total of 300 – the week of July 13.
Beshear said Thursday that Ernst & Young has provided 220 claims processors so far.
"We have more help now than ever before," he said during a media briefing.
Considering the 100 state employees who process claims, the contract will quadruple the state’s capacity overnight, said Amy Cubbage, general counsel to the Kentucky Labor Cabinet, during a legislative hearing in Frankfort on Wednesday.
Cubbage acknowledged the contract is “a large amount of money,” but she said it would take three to six months to train traditional employees to handle unemployment claims – time that people who have been waiting on checks don’t have.
“This was the best and cheapest way to get the backlog worked out,” Cubbage told lawmakers on Wednesday.
She said the hope to resolve the entire backlog or “at least 80%” of it by the end of the contract July 26. A copy of the contract on the state’s website indicates that Ernst and Young is required to provide personnel and produce assessments and reports, but it doesn’t include numerical objectives for processing claims.
Kentucky is looking at a massive budget deficit because of the economic downturn, but state officials said the $7.6 million to be paid to Ernst and Young will come from Kentucky’s share of federal dollars from the CARES Act pandemic relief package.
Kentucky has been slammed with more than 900,000 unemployment claims since the start of the pandemic in mid-March. About 550,000 Kentuckians have sought jobless aid, but there are about twice as many claims because many people have filed duplicates, said Josh Benton, an official in the state Education and Workforce Development Cabinet, during Wednesday’s hearing.
After she lost her job as a bartender at Shively-area nightclub in mid-March, Lisa Martin’s initial unemployment claim didn’t go through, so she filed another one. That turned out to be a big mistake, Martin said in an interview Thursday.
Martin said she has been waiting for two months for a call from a “Tier 3” unemployment specialist who can resolve her claim. Her nightclub has not reopened and nearly four months later, she hasn’t received a dime in unemployment insurance.
“I don’t know what to think anymore; it’s a waiting game,” she said. “I am going numb just waiting.”
Martin said she was fortunate that her husband, a home improvement contractor, had no problems with his claim and that their landlord is willing to be flexible on rent owed. (A Beshear executive order has stopped eviction proceedings for nonpayment of rent, but renters still owe their landlords.)
Still, she said, “It’s stressful. I can’t sleep. I worry all the time.”
State Rep. Jason Nemes, a Republican who represents eastern Jefferson County and parts of Oldham County, said in an interview Thursday that he questions whether the state got the best deal on the short-term contract, and he is “skeptical” that all the backlogged claims will be worked out by the end of the month.
“I am not optimistic, but I am hopeful,” he said. “I hope I’m wrong.”
