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Files show months of woe in Mass. jobless system

“We made sure people were given an explanation. Things went wrong through no fault of their own,” said Rachel Kaprielian, secretary of labor.

Wendy Maeda/Globe Staff

“We made sure people were given an explanation. Things went wrong through no fault of their own,” said Rachel Kaprielian, secretary of labor.

Despite assurances that the state’s Web-based unemployment system rolled out a year ago was a “success,” internal e-mails show an unemployment division mired in chaos for months, as thousands of people and businesses struggled with late benefits, missed hearings, and botched mailings.

Rachel Kaprielian, in her first extensive interview since becoming labor secretary in January, acknowledged that the division was initially strained by the “relentless nature” of complaints about the $46 million system. She said the agency called many people to apologize for delayed payments and other issues, which left some unable to cover rent and health care.

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“We made sure people were given an explanation,” Kaprielian said. “Things went wrong through no fault of their own.”

The system, designed and built by Deloitte Consulting of New York, was rolled out under Kaprielian’s predecessor, Joanne Goldstein, who left for a job in academia early this year. Goldstein declined to comment for this story. Deloitte representatives and Kaprielian said the system is vastly improved since its July 1, 2013, debut.

Kaprielian’s comments came after the Globe, in a public records request, obtained hundreds of e-mails detailing the turmoil that followed the launch, and the furious efforts by the agency to triage the problems. One person who couldn’t get benefits paid faced eviction. Another, with a brain tumor, couldn’t pay for health insurance, according to the e-mails. Still another received 100 duplicate mailings in a single day.

Many other unemployed workers received letters erroneously telling them that they owed the state for past overpayments, including one man who wrongly received a demand for $45,000. In some cases, however, money was overpaid: Two months after the launch, a top labor official said in an e-mail that the system had paid out $800,000 in benefits that it shouldn’t have.

The e-mails and Kaprielian’s comments are in stark contrast to Goldstein’s repeated public statements at the time, and testimony before a state legislative committee, that the system rollout was a success.

‘We made sure people were given an explanation. Things went wrong through no fault of their own.’

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The state took eight months to release the e-mails requested by the Globe. The correspondence shows the system experienced serious problems from the moment it went into operation last summer, but it does not reveal the total number of people who experienced delayed payments or other problems.

State officials have said that 100 to 300 workers were adversely affected at any given time but never provided cumulative estimates of those affected over approximately six months that various glitches plagued the system.

The internal e-mails obtained by the Globe show that at 7 a.m. on the first day of operation, Michelle Amante, director of the unemployment division, was alarmed to find the system was down. “Already getting e-mails from claimants. Get it fixed,’’ she said in a dire e-mail to her staff and Deloitte executives. “If this isn’t fixed by 7:30, we are going to have to take paper claims on our first day of going live.”

The project by then was already two years late and $6 million over budget. On July 3, Amante wrote to Deloitte and her staff that the system was experiencing a “printing crisis,” with a backlog of 174 hours of printing to do, after just two days of processing claims. By the weekend, she complained that “fact-finding” letters to employers were being sent out with dates as much as five days old, giving recipients shorter windows in which to respond.

Deloitte recommended sending out the letters anyway, so long as corrected response deadlines were noted in the computer system. But a staff member objected, writing that he was “hesitant to send out 20,000 pieces of mail with the wrong date on it.”

Amante blasted a note to her top Deloitte contact, saying, “This isn’t acceptable. They were trying to pressure him to send this stuff out.”

Some delayed mailings meant people received notices late alerting them to hearings on their eligibility for benefits, or challenges by their former employers, according to the e-mails. Community Legal Aid, an agency in several locations that helps low-income people, objected to the late mailings, saying they were worried that “claimants will be missing their hearing or unable to have witnesses attend due to not getting notices [within] a reasonable amount of time.”

The agency said it worked with advocates to make sure claimants got at least 10 days to respond to eligibility decisions and appeals, spokeswoman Ann Dufresne said. Amante, in a recent interview, said Deloitte was generally responsive to her complaints, though she acknowledged, “I was very stern in my e-mails. I had to hold them accountable.”

As problems persisted, tensions rose between Amante and Deloitte, her employer before she joined the state. She complained frequently to executives there about their slow response times and unavailability. She vented in e-mails when they failed to show up at meetings or provide updates on data fixes with enough urgency.

On July 15, she said there were “NO Deloitte people in the situation room,” which was set up to respond to the system’s glitches. “Every time I have an issue I have to roam around to try to find people.” At the end of a particularly frenetic day, she e-mailed a Deloitte official at 7:18 p.m.: “Only ONE of the 12 [problems] we sent you this morning were fixed. This cannot continue. You are going to have to dedicate a resource for high profile claimants.’’

Claimants became high profile when they were referred by Goldstein or a legislator, or had urgent needs that the staff had been unable to address. Internally, they dubbed this “Lauren’s List’’ for Lauren Goldman, Amante’s chief of staff.

On the morning of July 24, more than three weeks after the launch, the system’s problems were far from resolved. “It’s so bad that we can barely look anything up,” Amante wrote to Deloitte and her staff. “Calls will be coming in, in 8 minutes.’’

Weeks later, printing problems again moved front and center. “Parties are calling LIVID because they missed the hearing, because the notices are delayed,’’ Amante wrote on Aug. 14 to Deloitte. “This has to be TOTALLY resolved by the end of the week, my staff can’t take this any more, and they shouldn’t have to.”

But they did. In late August, letters seeking information from businesses related to claims filed by workers were sent out with the wrong address and returned en masse. On Aug. 28, 3,000 came back in a single day because they were mistakenly sent to the unemployment division’s own address.

“Aside from the wasted postage, I would venture to say that we’ve not given due process,’’ a staffer wrote.

Through it all, Goldstein downplayed the problems. Last August, with criticisms of the system mounting and gaining wide attention, a Deloitte executive advised Amante, “I would keep pounding the 100-300 claimant” figure.

Deloitte, in a statement, said the system is now working well, having streamlined the claims process, improved the timeliness of payments and appeals, and strengthened the state’s ability to detect fraud.

“Like any project of this magnitude and complexity, there were challenges to overcome, but we worked through them together,’’ Jonathan Gandal, a Deloitte spokesman, said in a statement.

Kaprielian said not all the problems were equal; some were relatively easy to fix, while others delayed much-needed benefits. Still, her agency recently awarded a maintenance contract for the system to a firm other than Deloitte.

Kaprielian did not say why Deloitte had not won the bid. “It’s like a divorce. Nobody comes out completely happy,’’ she said of the overall project.

Kaprielian held an ice cream social for the agency in early August to commemorate the improvements in the year since the rollout. Seven months ago, she said, the staff was exhausted and demoralized. Today, she said, the system is stable. “We’re back in business.’’

Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth. Megan Woolhouse can be reached at megan.woolhouse@globe.com. Follow her on Twitter @MegWoolhouse.
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