13 Investigates


Nevada unemployment system's no-bid contracts cost taxpayers millions

The State of Nevada Department of Employment, Training and Rehabilitation building on E. St. Louis in Las Vegas
Posted at 6:10 AM, Apr 22, 2021
and last updated 2021-04-22 19:26:52-04

LAS VEGAS (KTNV) — Throwing money at a problem doesn’t always fix it. In this case, the problem is Nevada's unemployment system and it’s your money being spent.

The pain and frustration are being felt by claimants all over the state.

Janell Clark from Reno describes "Five-and-a-half-hour wait times and people being dropped right and left from calls."

William Carter of Las Vegas says he has been getting unemployment payments for over a year and then all of a sudden "the office has a new identification system."

RELATED: DETR updates PUA system including identity verification

Two contracts signed by the state in August amount to millions of tax dollars because the Nevada Department of Employment, Training and Rehabilitation, known as DETR, admittedly faltered under the strain of pandemic-induced unemployment.

"We were just absolutely overwhelmed with applications and work like we had never seen before," said DETR Director Elisa Cafferata.

The newest hurdle came with the recently passed Continued Assistance Act when Congress required states to verify the identity of every single claimant in regular UI and in the PUA system, which serves independent contractors, the self-employed and gig workers.

The goal: To protect legitimate claimants and weed out fraud.

DETR told state leaders it did not have the ability to do that.

"We were dealing with just overwhelming fraudulent applications and so we were looking for a solution," said Cafferata.

RELATED: Misinformation around Nevada's unemployment benefits coming from all angles

The solution was an emergency, no-bid contract with Virginia-based ID.me. It runs through the end of this year with a price tag of $1.5 million tax dollars coming from federal coffers.

State purchasing rules usually require a competitive bidding process to make sure taxpayers get the most bang for their buck, "But that is quite lengthy. It takes several months," Cafferata explained.

And no one had that kind of time.

"It's not a situation where you would look at and say, 'Is this the best investment?' We were in an emergency situation."

ID.me is a federally certified credential service provider being used by several states, as well multiple federal agencies including Veterans Affairs, Treasury and the Social Security Administration.

"ID.me is not a new company but they obviously took on a lot of government contracts at the same time," said Clark, an independent business owner in the legal field who's gone through verification with ID.me in the past.

"The system is incompetent," said William Carter.

TIMELINE: Nevada Dept. of Employment and handling of pandemic unemployment claims

Both he and Janell Clark have been stuck in a verification log jam.

"It doesn't make sense to me because they're basically duplicating what the state was already doing," said Carter. "Uploading a driver's license, uploading a Social Security number. They've added taking a video selfie."

Janell started with DETR. "I uploaded my Social Security card, my driver's license, my passport, my birth certificate, pretty much everything but a blood sample!"

After 10 weeks with no money, she went through the same process with ID.me.

"So, I've now been manually verified by their employees and been verified through ID.me and they still have a problem with my identity!"

"How do we address the concerns of people who feel like our federal tax dollars are going for something that's not working?" Chief Investigator Darcy Spears asked Elisa Cafferata.

"I would not agree with the premise that they're not working. ID.me has been able to successfully process over 90 percent of the folks who apply through the online process."

Cafferata and ID.me Senior Vice President of Public Sector Pete Eskew say the primary problem is fraudsters, who account for nearly half of all claims being filed.

"The goal for us for state and federal business is to make sure that the individuals who are truly hurting can gain access to the benefits while preventing criminals from taking money out of the system," said Eskew. "And that inevitably delays the legitimate claimants, but what we're doing is we're also saving Nevada and all of our state partners money that they would have been paying out to criminals."

Legitimate claimants dealing with five and six-hour wait times to speak to a trusted referee with ID.me say the company needs to do better.

"I don't know why it got so complicated," said Clark. "It sounds like maybe ID.me bit off a bit more than they could chew."

Eskew says ID.me is hiring hundreds of new workers for its online platform and plans to open in-person offices in June here in Las Vegas and nationwide.

"So, we're trying to combat the wait times that you're hearing about."

His advice to cut the wait? Wake up early.

RELATED: 'Additional fine-tuning' needed, DETR working on system updates

"Enter the cue in the mornings of Tuesday, Wednesday, Thursday. Particularly the morning means East Coast time. So, I would push them to go than when we have more staff that are available to handle those calls."

Another company handling calls for Nevada is getting an even bigger chunk of our federal tax dollars to help man the phone lines in DETR's UI call center.

Maximus got a $6.4 million no-bid contract which also goes through the end of 2021.

"They actually have UI experience in other states and they hire people with UI experience so, that was why the emergency contract was granted to them," Cafferata explained.

DETR eventually plans to transition all calls to state employees who can handle complicated claims but Cafferata says the experience is improving.

"The escalations--those folks are called back within the week, and we have made significant progress in our PUA backlog, and then we're going to re-deploy some of those resources to the UI backlog."

There are about 2,000 people in the PUA backlog compared to 47,000 in regular Unemployment.

If you're awaiting appeal, you're in line with more than 2,200 pending reviews in UI, which DETR says will take about two months to get through.

In PUA, more than 25,000 appeals need to be reviewed before they are considered valid.

If you're having a problem with ID.me, we can help. Send an email with your contact information and a description of your issues to darcy.spears@ktnv.com and we'll get it handled.

DETR also has a tip on avoiding duplication between them and ID.me if you previously went through the ID.me verification process last year.

When a claimant logs into ID.me from the EmployNV screen, sign in to ID.me and click the box that asks you to share your info with NV. When you click “Allow,” you'll be redirected to EmployNV and your identity is marked as validated in PUA. This flow has to start from EmployNV.

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