The computer problem partly responsible for a Renton business owner’s almost yearlong quest for his tax refund is affecting other businesses.
OLYMPIA — A state Employment Security Department (ESD) official acknowledged Wednesday that a computer system installed in March 2014 still can’t be used to process refunds for worker unemployment insurance owed to businesses.
That means the approximately 4,200 refunds currently owed to businesses must be manually processed, Lisa Marsh, deputy commissioner of ESD, told lawmakers Wednesday.
Given how long a manual refund takes, “we’re not going to catch up” with the backlog until the computer system is fixed, Marsh said during a work session of the Senate Commerce and Labor Committee.
The committee session comes after a story by The Seattle Times in October detailed a Renton business owner’s 11-month-long odyssey to get a $144 refund check owed to him by ESD.
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Steve Allington, owner of Consortium of Papers, called the agency about 10 times, speaking with various staff who gave different reasons for the delay. The agency later revealed that along with the computer problem, multiple clerical errors played a part in the delay.
Sen. John Braun, R-Centralia, said the problem differs from those at a private business — where customers can walk away.
“With ESD, as a business owner, I don’t get a choice,” Braun said. “I have to do business with ESD.”
The computer system installed in 2014 was intended to reduce the manual workload and speed the agency’s processing of refunds. But it hasn’t yet been able to work with the state’s accounting computer system, according to Marsh.
“We had some challenges getting the two of those computer systems to talk to each other,” she told lawmakers.
While ESD had hoped to have the system repaired by the end of 2015, the fix now may not arrive until June, according to Marsh. The fix has been delayed because testing revealed issues still to be worked out, according to Brenda Westfall, director of the department’s UI Tax and Wage Administration.
So, ESD staff must print out refund requests, track them on spreadsheets, prepare a voucher, then have the refund paid out of the state’s invoice system, Marsh said.
Since March 2014, the agency has manually processed about 900 refunds, according to Westfall.
That means about 180 refunds have been completed since late October, according to ESD numbers from that time. And while ESD reported about 3,900 refunds pending then, Marsh said Wednesday the backlog is now at about 4,200.
Allington was in line for a refund because his business, which sells glossy paper to magazines and other publications, has restructured. Without having employees on staff, he no longer has to pay unemployment insurance.
Speaking at the hearing, Allington said he couldn’t understand why the agency would install a computer program without knowing it would work with other systems.
“In the private sector, we would never do something like that,” Allington told lawmakers. “Or we wouldn’t be in business.”
As for the clerical errors that also delayed Allington’s refund, Marsh told lawmakers that agency staff now have a form they can fill out to alert supervisors so problems can be better tracked.
Sen. Michael Baumgartner, R-Spokane and chairman of the committee, asked Marsh to report back when the computer problem is fixed and to explain how the agency plans to erase the refund backlog.