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Publish Date: 4/6/2005

Glitch to cost state extra $17M
Welfare system remains thorn in Legislature’s side


DENVER — The state plans to spend an extra $17 million this year because of problems with its new welfare computer system, which went online in September despite complaints from counties that they weren’t ready to make the switch.

And budget planners say the state could have to come up with another $40 million next year to cover Medicaid claims that have been delayed because of the switch to the Colorado Benefits Management System.

Senate President Joan Fitz-Gerald said Tuesday the Legislature needs to set aside enough money to cover those claims.

“We think there are probably some inaccurate figures since the (the computer) system hasn’t kept up with the workload,” she said.

Also Tuesday, the Senate Appropriations Committee voted to give the Department of Health Care Policy and Financing an extra $4.4 million and the Department of Human Services another $12.6 million this year. Both agencies distribute benefits such as food stamps and Medicaid that are handled by the computer system, which the state and Electronic Data Systems developed together.

Of the approved amount, $10.2 million is state money and $6.8 million is from the federal government. Counties would get $5.7 million to cover the cost of temporary workers hired to input information from their old computer systems into the new system.

The state agencies would use the remaining $11.3 million to cover legal fees in the lawsuit filed over the $200 million computer system, changes to the computer system and extra employees. It also would cover extra printing and postage because the system spit out extra notices for welfare recipients.

Sen. Abel Tapia said the Joint Budget Committee has refused to sign off on the state’s annual payment to Electronic Data Systems and has met with the attorney general to find out whether the company should be responsible for the extra money. However, he thinks the state needs to spend the money now. “We feel that if we did any less it would hurt the people who receive the services and not the departments,” Tapia said.

Sen. Dan Grossman, D-Denver, said he continues to hear from people having trouble getting benefits. He isn’t convinced the state should sink any more money into the system.

“At some point we’ve got to say we don’t have any confidence in getting this fixed,” he said.

Electronic Data Systems spokesman Bill Ritz declined comment.

The state has already scrapped its old computer systems and Sen. Ron Teck, R-Grand Junction, said turning back isn’t an option. He faulted the state for not working hard enough to make sure the system was ready before putting it online. He also said Electronic Data Systems should have done a better job designing the system so there wouldn’t be as many change orders now.

Tapia said the state could have saved more money in the long run by having a company design the entire system, rather than having the state work in collaboration with EDS to try to save money.

The computer system was blamed for causing a backlog of nearly 30,000 cases after it went online last fall.

A legal advocacy group sued the state on behalf of people who didn’t receive benefits. Last month the state told the judge in the case that it had resolved 68 percent of those cases.

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