FRANKFORT, Ky. (AP) — Kentucky will extend its contract with an outside company hired to help work through a backlog of unemployment claims amid the coronavirus outbreak, Gov. Andy Beshear said Friday.
The contract with Ernst & Young will be prolonged by another five weeks at a cost of $4.4 million, the governor announced. The company has helped process more than 56,000 claims under its original contract with the state, exceeding expectations, Beshear said.
Coronavirus-relief funds from the federal government will pay for the original contract — which was about to expire — and the extension, the governor told reporters. The original contract paid the company more than $7 million.
The company dug into the most complex claims that had stalled for months.
“Our goal here has always been to fully catch up,” Beshear said. “And let’s admit, that is tough when so many new claims are continually coming in. But we know we’ve made progress. ... And this additional investment is going to make sure that we don’t go through another period like what we have been through, and that people are timely helped.”
The contract has drawn scrutiny from lawmakers and others. Kentucky paid the company considerably more than Colorado did to help with its unprocessed claims, the Courier Journal reported. Beshear said Friday that his administration negotiated a fair deal, noting that a larger workforce was needed in Kentucky to process a big backlog of complex claims in a short time.
Beshear said the partnership with Ernst & Young has helped the state offer in-person assistance to more Kentuckians and led to quicker resolution of claims.
“If our staff were to drop everything and only work on the issues EY had been working on, it would have taken three months, we think, to do the work that they have done to date,” he said. “That means in-person services would have stopped and we would have fallen further behind.”
The plight of Kentuckians left in limbo for months while seeking unemployment benefits became a political headache for the Democratic governor, who drew criticism from Republican lawmakers. House GOP leaders called the backlog a “massive failure of leadership” by Beshear’s administration.
Beshear has said he takes responsibility for the state’s response, but has noted that the state’s unemployment system endured years of budget cuts before he became governor.