TOPEKA
In the month since Kansas Labor Secretary Delia Garcia resigned, the agency she oversaw has added more call center workers, hired a consultant to propose improvements and even introduced Amelia, a virtual chat agent, to answer basic questions.
But problems persist, and frustration is festering among some unemployed Kansans.
Rose Hill resident Mary Price, 50, unable to work for a short time because of recent surgery, said she has been trying to file for unemployment benefits since the middle of May, but can’t reach anyone with the KDOL by phone. Amelia hasn’t been able to help, either.
“I know they’ve added more telephone reps, but it’s clear that’s not working,” Price said. “All I can do is push redial and hope I can at least get put on hold so I can reach someone.”
More than any other state agency, the Kansas Department of Labor (KDOL) has struggled to meet the challenges of the pandemic. A wave of unemployment claims overwhelmed antiquated mainframe systems and a lean staff in March. The department has been trying to catch up ever since.
No crisis underscored KDOL’s problems more than its disastrous attempt last month to claw back $7 million in duplicate benefit payments mistakenly sent to about 4,500 accounts. The cash quickly vanished from state-issued debit cards and personal bank accounts, and dozens of accounts were likely overdrafted.
The clawback fiasco was a black eye for Gov. Laura Kelly’s administration and led to Garcia’s departure. At the time, Kelly said KDOL carried out the operation without permission from the governor’s office.
Since then, the agency, now led by Kelly deputy chief of staff Ryan Wright, has begun working with Accenture, the IT consulting giant, to revamp its customer service and delivery of unemployment benefits. It has also been approached by about 100 people asking the agency to pay their overdraft fees, but so far just four have provided the necessary documentation. Asked about the small number, a KDOL spokeswoman said the agency believes banks waived overdraft fees in most cases.
“The Governor recognizes change wouldn’t happen overnight – however, the labor department has made numerous improvements since Accenture has come onboard,” Kelly spokeswoman Lauren Fitzgerald said in a statement.
Emails and text messages obtained by The Kansas City Star and The Wichita Eagle this week provide the fullest picture yet of how the clawback unfolded inside KDOL. They show officials scrambling to contain the fallout amid frustration from the governor’s office. And they reveal the agency trying to put out multiple fires at the same time, including a breach of labor market data and a buckling computer system.
Still, it isn’t clear from the documents who authorized the clawback or if officials anticipated that bank accounts could be overdrawn in the process. Some emails, provided in response to a records request, are partially or fully redacted.
“The responsibility rests with the Secretary of Labor,” KDOL spokeswoman Julie Menghini said Wednesday.
On Thursday, June 18, Menghini emailed the governor’s office the message that she was told to send to benefit recipients who had received a duplicate payment. It warned recipients that KDOL would withdraw the money from their accounts.
Menghini and Fitzgerald both confirmed the email was how the governor’s office first learned the clawback had been initiated.
In response to Menghini, Wright bluntly told Garcia that “we didn’t know that clawing back the funds was the final decision or that it was going to happen today,” according to an email.
“Moving forward,” Wright wrote, “please make sure we are aware of these actions prior to them happening. What happens if the money has already been spent by a recipient?”
Garcia appeared to indicate she wasn’t fully aware of what had happened. “Yes, I will let you know directly, as I found this morning as well,” she wrote in reply. She wrote that if recipients had already spent the funds, they would have to pay it back.
‘Too many irons’
As concern spread about the clawback, KDOL was also responding to a breach of labor market data.
Angela Berland, director of labor market information services, had called the federal Bureau of Labor Statistics (BLS) regarding an early release of labor market information. The monthly labor report was set to be sent out Friday morning, June 19.
According to an email from Susan Mendez, an assistant regional commissioner at BLS, information was sent ahead of time to a legislator who isn’t identified.
“Since you and the communications person are confident that the legislator deleted the email without reading it and the pre-release is contained, please go forward with your schedule release,” Mendez wrote.
Menghini took responsibility for the breach. “Too many irons,” she wrote.
At the national level, labor market information is highly valuable and investors make decisions based on it. It’s still possible early access to state-level information could have held business or political value.
As the day wrapped up, Garcia held a call with staff. Hours later, deputy secretary Brett Flachsbarth emailed her to say that staff responded to how honest and “real you were with them” on the call. Flachsbarth wrote that Garcia should stop working and rest.
“I could tell how good it made them feel to hear you share how tough this has been,” he wrote.
The records don’t provide any more details about what Garcia said on the call. Garcia, who hasn’t spoken publicly since her resignation, didn’t respond to a request for comment on Tuesday.
Garcia summoned
As the weekend approached, the crisis only continued to grow.
On Friday, June 19, KDOL officials were scrambling to learn more about the clawback and what, if anything, could be done. What they found was that the process wasn’t easily reversible. They had no information about the clawbacks of accounts with direct deposit — the kind of accounts vulnerable to overdrafts.
At 5:45 p.m., Flachsbarth reported to Wright that getting information on those clawbacks could take weeks and that the agency was creating an email address for concerns about duplicate payments.
“Pulling back improperly paid funds is a practice that has been used over the years. It is not overly common, but it has been done and it also goes through the Treasurer’s Office,” Flachsbarth wrote in one of the few apparent attempts to defend what had happened.
Saturday got off to a rough start. An email sent at 6:45 a.m. indicated the mainframe was down and at least an hour and a half from being back online.
As the day progressed, word of the clawback was reaching reporters. At least two TV stations had already run stories. At the behest of Sam Coleman, a spokesman for the governor, KDOL mounted an effort to contact benefit recipients who had spoken to journalists.
Garcia personally called five individuals, she said in an email.
“Team Work Makes Dream Work,” she wrote in a message to several officials that evening.
“Well done. Let’s take a breath. Make our plan Monday morning and execute,” Menghini wrote back.
Garcia didn’t make it that far. On Sunday, she texted a colleague: “Just got called & I have to go to Governor’s Office this afternoon.”
Her resignation was announced the next morning.