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Florida Governor Is Not Impressed with Deloitte’s Handiwork

Posted on by Jason Bramwell

“It was designed with all these different things, basically to fail, I think. This thing was a clunker, there’s no doubt about it.”

— Florida Gov. Ron DeSantis said about the state’s unemployment claims website, CONNECT, which was built by Deloitte Consulting in 2013 when Rick Scott was Florida governor.

The system has pretty much been a pile of shit from Day 1. The Tampa Bay Times reported in late March:

But as auditors made clear last year, state officials failed to fix fundamental problems with the site dating back to its launch in October 2013, when Florida’s unemployment rate was falling.

Building a new unemployment site was one of Scott’s top priorities, and the contract to build it was awarded to Deloitte Consulting, a major contractor whose high-powered lobbyists at the time included Brian Ballard, the co-chair of Scott’s inaugural finance committee.

Deloitte had problems from the start. Two years before the site launched, the Department of Economic Opportunity was warning the project wasn’t working right and and had fallen behind schedule. Department officials were threatening to fine Deloitte $15,000 per day until it revised its final design. At one point they threatened to fire the company.

When the site launched, website glitches locked thousands of recipients out of the system and delayed their payments by weeks.

The site, in violation of state law, required applicants to sign in with their Social Security numbers, and the site had so many problems that people found their claims denied or were paid claims when they weren’t qualified for.

To add insult to injury, the site cost taxpayers $77 million, $14 million more than originally estimated.

Now, as thousands of newly out-of-work Floridians are trying to file claims for unemployment benefits and receive payments during the COVID-19 pandemic, the website keeps crashing.

And here comes the lawsuits:

The first action was filed Thursday against Governor Ron DeSantis and the Florida Department of Economic Opportunity. It seeks to compel payments through the reemployment system that have not been made.

A lawsuit was also filed Friday against the governor, DEO and Deloitte Consulting, LLC, who had been contracted to develop the web-based claims site years ago. The suit alleges negligence in creating and administering the system.

“Persons like Plaintiffs named herein have not been able to obtain benefits that they should have been able to obtain due to gross negligence and/or negligence of defendants. The system design and/or implementation is a failure,” it states.

Can you hear that laughing sound? That’s coming from the state of Rhode Island.

Gov. DeSantis says unemployment system was ‘designed to fail’ [Florida Politics]
Ron DeSantis was warned about Florida’s broken unemployment website last year, audit shows [Tampa Bay Times]
Lawsuit filed over state unemployment system, attorneys call it a “colossal failure” [WFTS-TV]

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If you’re justl started with Deloitte quitting as the auditors of APP late last month. At that time, Deloitte warned that the ’09 financial statements may not (read: definitely are not) reliable and that they were getting the hell out of Dov.

Former APP auditor Marcum – for reasons unbeknownst to us – went back to their old client to try and help them straighten things out. Here’s the latest from the “preliminary results” for the second quarter, while thetardy 10-Q remains elusive. These prelims (i.e. a wild stab?), that were filed today warn that things are likely to get worse before they get better:

Potential Restatement of previously issued financial statements

Effective July 22, 2010, Deloitte resigned as our independent registered public accounting firm. On July 26, 2010, we engaged Marcum as our independent registered public accounting firm. On July 28, 2010, we reported on a Form 8-K that we had been advised by Deloitte that certain information had come to Deloitte’s attention that if further investigated may materially impact the reliability of either Deloitte’s previously issued audit report or the underlying consolidated financial statements as of and for the year ended December 31, 2009 included in our Annual Report on Form 10-K for the year ended December 31, 2009. Deloitte has requested that we provide Deloitte with the additional information Deloitte believes it is necessary to review before any conclusions can be reached as to the reliability of the previously issued consolidated financial statements as of and for the year ended December 31, 2009 and auditors’ report thereon.

Depending on the outcome of this review, a restatement of our financial statements as of and for the year ended December 31, 2009 could be required. Any restatement may subject us to significant costs in the form of accounting, legal fees and similar professional fees, in addition to the substantial diversion of time and attention of our Chief Financial Officer, our other officers and directors and members of our accounting department in preparing and reviewing the restatement. Any such restatement could adversely affect our business, our ability to access the capital markets or the market price of our common stock. We might also face litigation, and there can be no assurance that any such litigation, either against us specifically or as part of a class, would not materially adversely affect our business, financial condition or the market price of our common stock.

But that’s not all! The company discusses a few more issues, “We are subject to regulatory inquiries, investigations, claims and suits. We are currently defending one wage and hour suit, one sexual harassment suit and responding to several allegations of discrimination and/or harassment that have been filed with the Equal Employment Opportunity Commission or state counterpart agencies.”

At that point, the filing finally gets to the problem du jour:

In addition, in connection with our previously disclosed change in auditors, on July 30, 2010, we received a grand jury subpoena from the United States Attorney’s Office for the Southern District of New York for the production of documents relating to the circumstances surrounding the change in our auditors. We have also received inquiries from the Securities and Exchange Commission regarding this matter. We intend to cooperate fully with these requests and any related inquiries.

If consider all that, plus the fact that the company is spending cash like Pacman Jones at a strip club and that they’re likely to be in noncompliance with a major debt covenants at September 30th, it’s no surprise that the stock is off even more than when Deloitte first quit as auditors.

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Deloitte Gets More Serious About Diversity, Names Chief Diversity Officer

Thumbnail image for Thumbnail image for small salzberg.jpgBarry Salzberg didn’t waste any time addressing all the belly aching over the H-1B controversy. Yesterday, Deloitte announced the appointment of John Zamora as Chief Diversity Officer and we expect all the complaining to subside by the end of the week.
We like this move. Dr. Phil simply cannot be expected to be out there 24/7 developing training sessions that nobody attends, doing interviews, and keeping up the general free-wheeling on his own. And if someone isn’t out there doing all those things, no one — we mean NO ONE — is going to think that Deloitte is diverse. Constant bombardment of diversity initiatives and efforts is the only way. Solution? Chief Diveristy Officer John Zamora.
Full press release after the jump.

NEW YORK, Jan. 19 /PRNewswire/ — Deloitte today announced the appointment of John Zamora to the position of chief diversity officer. Zamora will be responsible for Deloitte’s diversity strategy and will lead its continuing efforts to attract, retain and develop the best talent in the marketplace.
“John brings 20 years of professional services experience to this position along with the passion, energy and commitment to lead our organization’s diversity and inclusion initiatives and inspire others in the industry,” said Barry Salzberg, chief executive officer, Deloitte LLP. “I am confident in John’s ability to sustain and advance Deloitte’s inclusive environment, where the brightest are valued for their ideas and contributions to each other, our clients and our culture.”
Zamora currently works with clients in the Real Estate and Tourism, Hospitality & Leisure industries and is the operations leader for the Southeast region. He will continue in this role in addition to serving as chief diversity officer.
“Diversity is the foundation of Deloitte’s competitive business advantage,” said Zamora. “In the global marketplace today, diversity of thought, backgrounds and experiences are at the core of an organization’s ability to build high performing teams that deliver outstanding results to our clients and our people. As chief diversity officer, I plan to further Deloitte’s longstanding commitment to diversity and fostering an environment where the industry’s highest caliber of diverse talent can achieve their personal and professional goals.”