Job Block Seen Through Magnifying Glass

Oregon’s latest audit of its troubled employment department won’t be done until summer, several months behind the original schedule.

Secretary of State Shemia Fagan ordered the audit in February 2021, soon after taking office. She said the audit would explore why the Oregon Employment Department performed poorly during the COVID-19 pandemic.

Auditors initially planned to wrap up their work last fall, then pushed back their timeline to spring. Now, they’re targeting sometime in the third quarter of this year. Fagan’s office said the review is underway and attributed the delay to auditors’ efforts to be thorough and meet government auditing standards.

Oregon’s employment department was among the slowest in the nation in paying jobless benefits during the pandemic, according to an analysis by The Oregonian. Nearly 200,000 Oregonians joined the ranks of the unemployed in the spring of 2020 as the pandemic shut down much of the state’s economy.

Tens of thousands of those laid-off Oregonians waited weeks or months for their benefits during the heart of the crisis.

And it took Oregon eight months — longer than any other state — to begin paying benefits for the first week after their layoff. Newly unemployed workers are not typically eligible for benefits during that week, but Congress waived the usual waiting period nationwide in an attempt to ease the economic upheaval.

The state employment department relies on an obsolete computer system, built on technology from the 1990s, even though Oregon received more than $80 million in federal money back in 2009 to pay for an upgrade.

The result was that the employment department needed to manually process tens of thousands of claims that flooded in when the pandemic hit. Automated mailings to laid-off workers were often confusing or flat-out wrong, and the department’s phone lines were jammed for more than a year as claimants called in to seek clarity or fix the state’s mistakes.

Prior state audits, and a series of investigations by The Oregonian, found the employment department had been riddled with dysfunction in the decade leading up to the pandemic. The state fired three consecutive department directors amid a string of setbacks but failed to resolve some issues identified by state investigators and by the news organization.

The employment department’s problems became a political flashpoint during the pandemic.

The audit’s new timeline means it won’t arrive before the May gubernatorial primary. Instead, the audit will land sometime during a hotly contested general election, 16 months after Fagan ordered the review.

“As auditors do their work they often find new information that can affect the timeliness of their work; it important they are thorough and accurate and gather sufficient evidence. This is part of the auditing process and makes it tricky to predict when a report will be complete,” said Ben Morris, spokesperson for the secretary of state.

The shifting dates aren’t a postponement, he said, but a normal part of the auditing process.

“We understand the desire to get this information out to Oregonians, but part of following government auditing standards is the importance of crossing every ‘t’ and dotting every ‘i’ before making our findings public,” Morris said in an email.

Veteran employment department manager David Gerstenfeld has been running the agency on an acting basis since Gov. Kate Brown fired his predecessor in May 2020. The department has made several substantial reforms under Gerstenfeld, who set about methodically addressing the department’s lapses and reducing mistakes.

Even so, delays and frustrations continued for more than a year after the pandemic hit. The employment department has chosen a vendor to replace its computers and says work is proceeding on schedule. But even so, Oregon doesn’t expect to complete the upgrade until 2025.

Brown told The Oregonian a year ago that she would wait to make a decision about long-term leadership at the department, and other possible reforms, until the audit is complete.

The new timetable means that Brown’s time in office will be nearly complete by the time auditors finish their work.

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(2) comments

guest2984

"The shifting dates aren’t a postponement, he said, but a normal part of the auditing process."

--Not in a for-profit environment. Nor the current non profit that I work for.

Janus81

The auditing process has been an important for independent minded Secretaries of State. But Shemia Fagan is a party hack, who has been wasting her time doing off-topic "studies" of political issues, like "political terrorism." that she wants to politicize, rather than actually auditing the functions of state government, as the law requires.

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