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Tech Upgrade Targets Overpayment of California Unemployment Benefits

California's Employment Development Department will soon begin work on an IT modernization project that will integrate the collections and accounting systems the department uses to ensure recipients of unemployment and disability insurance pay the state back if they receive overpayments.

California's Employment Development Department will soon begin work on an IT modernization project that will integrate the collections and accounting systems the department uses to ensure that recipients of unemployment and disability insurance pay the state back if they receive overpayments.

The $15 million Benefit Overpayment Collection Automation (BOCA) project is one of the newest initiatives under the Department of Technology’s oversight.

A project feasibility study was submitted for BOCA in February, and the department has requested about $8.7 million in funding during the next three fiscal years for state staff positions, contracts, hardware, software and ongoing support.

The existing Benefit Overpayment Collection System application, built in 2000, accepts voluntary payments from recipients. It will be replaced, and the new system will be integrated into the EDD’s Accounting and Compliance Enterprise System (ACES). The legacy system is built atop Visual Basic and Access databases that are no longer supported, according to state documents.
 
“The main transition of our collection process will be done by FAST [Enterprises], and we anticipate the state staff will make the changes to the interfaces to our accounting system. The only other contract work we’ll have is for IV&V services since that is a Department of Technology requirement,” Gail Overhouse, EDD’s chief information officer, wrote in an email on Wednesday to Techwire.

FAST Enterprises, based in Centennial, Colo., was the prime contractor for ACES, so the department will use the company’s services again because they have the system’s proprietary code, according to a Spring Finance Letter that EDD finalized in March.

The integrated system will give EDD the ability to automate bank levies, which is projected to generate an additional $23 million in annual revenue for the state. Design and development is expected to occur in 2017, and testing a year later.

EDD’s Tax Branch collects overpayments from recipients. An overpayment typically occurs when a claimant applies for and receives full or partial benefits for a period of time for which they weren’t eligible.

“At the end of [fiscal year] 2014-15, the EDD's benefit overpayment accounts receivable totaled approximately $1.3 billion, which was comprised of over 590,000 outstanding overpayments,” EDD said in its budget letter.

Matt Williams was Managing Editor of Techwire from June 2014 through May 2017.