(The Center Square) – A surprise loss of $29 million in federal funds has hampered efforts to modernize Wisconsin’s unemployment insurance program, with state officials warning that fraud defenses, employer tools, and customer service improvements could be delayed indefinitely without new funding.
Department of Administration Secretary Kathy Blumenfeld and Department of Workforce Development Secretary Amy Pechacek confirmed the federal funding cuts in their quarterly progress report to the Joint Finance Committee co-chairs Thursday, WisPolitics reported.
They said the federal funding cuts in May by the President Donald Trump administration halted several projects toward unemployment insurance programs.
Those projects include:
$11.25 million towards employer portal “modernization” towards communication, fraud prevention, and document sharing between employers and DWD.$6.8 million for “UI Equity” for a new correspondence system for communication with claimants.$4.5 million for planned enhancements to claim adjudication and identity proofing.$3.7 million towards tools for identity verification, data management and cybersecurity.$2.6 million to a program integrity project designed to detect fraud and improve overpayment recovery.
Some federal funds still remain, but Blumenfeld and Pechacek say they are not enough to continue the delayed projects.
“While the $80 million ARPA-SLFRF modernization funds are not impacted by the Trump Administration’s actions, those funds are insufficient to support the full modernization work and integration of its IT systems in a cloud-based environment,” Blumenfeld and Pechacek said in their letter.
According to the secretaries, all components must be updated before the systems can be fully cloud-based.
While the number of people covered by the UI program is not publicly recorded, the program has paid out billions in benefits to hundreds of thousands of claimants during the COVID-19 pandemic.
Joint Finance Committee co-chairs Rep. Mark Born, R-Beaver Dam, and Sen. Howard Marklein, R-Spring Green, did not immediately respond for comment on the quarterly progress report.
