Kansas to scrap disco-era unemployment mainframe for cloud system

The Kansas Department of Labor announced Tuesday that it will retire the mainframe that’s run the state’s unemployment insurance program since the 1970s and replace it with a new, cloud-based system that officials said would offer more data security and be capable of handling a higher volume of requests.

The new system will be designed by Tata Consultancy Services, the IT consulting arm of the multinational Tata Group. Kansas’ new unemployment system, the company and state officials said, will include several online self-service functions, including filing and certifying weekly claims, tracking benefits and filing appeals. It will also be designed to allow businesses to make their contributions to the state’s unemployment insurance funds and file real-time wage reports.

Tata says it’s also worked on unemployment systems in Connecticut, Maine, Mississippi, Missouri, New York and Wyoming.

As in many other states, Kansas’ aged unemployment system “all but collapsed” under the spike in claims brought on by the COVID-19 pandemic. Claims went from 3,000 in February 2020 to more than 66,000 just a month later.

And like most states, Kansas also saw record levels of illegitimate activity. According to an audit by the Kansas Legislature last August, the state paid out $700 million in phony claims during the first year of the pandemic. Nationwide estimates for how much pandemic unemployment money ended up in the hands of fraudsters have ranged from $87 billion to as much as $400 billion. Attorney General Merrick Garland recently named a special prosecutor to investigate pandemic-era fraud.

Many other states have used their pandemic recovery periods to overhaul unemployment systems, including Colorado and Wisconsin. The U.S. Department of Labor last August also released $240 million — from the American Rescue Plan and CARES Act — to help states overhaul their legacy IT in hopes of preventing future fraudulent activity.

In Kansas’ case, unemployment modernization has been a long time coming, after a process initiated in 2005 was scuttled six years later amid widespread layoffs and cutbacks at the state Department of Labor by then-Gov. Sam Brownback. On Tuesday, Brownback’s successor, Laura Kelly, said Tata would complete the modernization.

“The state was close to modernizing our unemployment system before the previous Administration stopped the process in 2011,” she said in a press release. “The selection of this vendor allows us to begin the work of modernization quickly so that we can ultimately better serve Kansans.”