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Joanne Goldstein to step down as state labor secretary

Joanne Goldstein (left) is taking a job at Northeastern University, and Rachel Kaprielian, the Registry chief, will be her successor.

Globe photos/file

Joanne Goldstein (left) is taking a job at Northeastern University, and Rachel Kaprielian, the Registry chief, will be her successor.

The state’s secretary of labor, Joanne F. Goldstein, will step down at the end of this month to take a job in academia, following months of public and legislative scrutiny of a troubled computer system for managing unemployment claims.

Governor Deval Patrick, who has less than a year left in office, downplayed the problems with the claims system as a reason for Goldstein’s departure and said her successor, Rachel Kaprielian, the chief of the Registry of Motor Vehicles, would ensure that any remaining problems with the system are fixed.

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Kaprielian will “continue the team’s insistence that those issues get resolved quickly for people who rely on this assistance,’’ Patrick said after a State House news conference Friday.

Goldstein, a labor lawyer by profession and former top aide to Attorney General Martha Coakley, was appointed by Patrick in 2010. She generally had good relations with both labor and business leaders, who praised her efforts to hold down costs of unemployment insurance, including her support of a rate freeze on employers’ premiums.

Christopher P. Geehern, executive vice president of Associated Industries of Massachusetts, the state’s largest business group, said Goldstein’s door “was always open” to the business community.

“She was a very collaborative person,” Geehern said.

But her tenure was marred by the rollout in July of a $46 million online system for filing unemployment claims and managing benefits. The system, built by Deloitte Consulting, was delivered two years late and $6 million over budget, and was riddled with technical problems. Hundreds, if not thousands, of people were unable to file claims and receive benefits at times, overwhelming phone lines set up to help.

The problem required thousands of overtime hours by state employees and led to an ongoing investigation by the Senate’s Post-Audit and Oversight Committee.

Goldstein is taking a job as an associate vice president at Northeastern University. She maintains that she is leaving an unemployment benefits system that is working fine, and that the troubles were merely bugs common to new software and systems. She said in a brief interview Friday she was leaving the department “in good shape” for the new secretary. As to why she was leaving now, Goldstein said, “I got an opportunity that was just irresistible.’’

Goldstein inherited the computer project from her predecessor, Suzanne Bump, now the state auditor. The contract negotiated under Bump provided few protections for taxpayers and little oversight, according to contracting specialists interviewed by the Globe. In an interview last year, Goldstein acknowledged that the project had gone so far off track by the time she became secretary that she considered firing Deloitte.

Instead, she said, she negotiated a contract amendment that for the first time included financial penalties for the contractor: Finish the job on time, or pay the state $10,000 a day for every day it was late. Deloitte met the deadline, and the new system was rolled out July 1. Goldstein’s office also convinced Deloitte to extend its warranty period, where it fixed problems for free, from three months to four.

Yet continued complaints from claimants to legislators and the Globe’s coverage prompted State Senator Cynthia Stone Creem, a Newton Democrat and chairwoman of the Senate Post-Audit and Oversight committee, to open an investigation of the Deloitte system and the state’s process for buying technology services. That investigation is ongoing, and the third hearing on these issues is likely this month.

At Friday’s press conference, Patrick credited Goldstein with tightening the contract with Deloitte “to hold them accountable for any fixes or improvements that need to be made’’ so the system works smoothly for all claimants.

Kaprielian will come into the secretary’s job very familiar with Deloitte. The Registry of Motor Vehicles awarded a $77 million contract to Deloitte to modernize its computer system last year, despite problems with the Labor Department system and another system Deloitte was hired to build for the state Department of Revenue.

The Revenue Department fired Deloitte midway through a $114 million contract after tests revealed many technical problems and officials lost confidence in the consultant.

Kaprielian, in her current job, vowed to studiously monitor Deloitte’s performance at the Registry.

Michael Levenson of the Globe staff contributed to this report. Meg Woolhouse can be reached at megan.woolhouse@globe.com. Beth Healy can be reached at beth.healy@globe.com.

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