House subcommittee hears Deloitte, state officials on UIA modernization; employer go‑live set for December

The Michigan House Appropriations Subcommittee on General Government heard an update on the Unemployment Insurance Agency (UIA) modernization project on June 12, 2025, with Deloittemanaging principal David Parent and state officials reporting improved testing results and a revised schedule that puts the employer portion of the new system on track to go live in December and the claimant portion in May.

The update matters because the project replaces the state's decade-old UI system that handles employer tax collection and benefit payments for claimants, and delays have extended the state's use of the legacy system and contributed to a supplemental $20 million funding request to cover continued operational costs.

Deloittemanaging principal David Parent told the committee the project had been rated "yellow" by the stateDepartment of Technology, Management & Budget (DTMB) and the independent verification and validation (IV&V) vendor, but "the project is on an upward trajectory, has shown significant improvement, and we are now tracking on schedule for a go live for the employer portion of the project this December and the claimant portion of the system next spring, we anticipate in May." He reported current test-pass rates of 97 percent for the employer component and 88 percent for the claimant component.

Parent identified three main causes of earlier delays: governance shortcomings, unclear scope (including lengthy debate over how much historical data to convert), and problems with new technology Deloitte brought to the project. He said Deloitte had taken responsibility for technology shortcomings and had worked with DTMB and UIA to rework test plans, add a new testing phase, increase in-person communications, involve state testers earlier, and clarify product-owner decision rights.

Laura Clark, chief information officer for the state, described a three-tier governance structure the parties now use: a project steering committee of senior leaders that meets biweekly, a project leadership group for tactical issues, and a project status group for day-to-day operational matters that meets weekly. Clark said IV&V observations are incorporated into steering-committee discussions and that the state negotiated contract change notices and enforcement measures after test failures.

Brett (Bridal in the transcript) Gleeson, described in committee testimony as chief operating officer for UIA, told lawmakers the legacy system is over 10 years old and limits fraud detection, self-service and responsiveness. He said the state used Gartner benchmarking and a human-centered design process to shape the procurement and that the selected solution required customization.

Committee members pressed several topics: why conversion decisions took more than six months (discussions ranged over converting as much as 30 years of historical data versus as little as seven), why sprint work and documentation from early project months were sometimes delayed, and whether the state or vendor bore primary responsibility for overruns. Parent and state officials declined to allocate a percentage of blame but acknowledged shared responsibility; Parent said Deloitte accepted "material responsibility" for technology-related problems.

On funding, lawmakers asked about a supplemental $20 million request the department has submitted to secure ongoing operations and testing during the delay. Clark and Gleeson said the supplemental request covers operational and third-party costs (infrastructure, IV&V, and legacy-system maintenance) that extended because of the 14-month delay; Parent told the panel Deloitte was not seeking additional contract funds from that request. Clark also said the state had negotiated roughly $7.5 million in contract credits in prior change negotiations.

Officials described changes to the IV&V process: Deloitte and state teams now review draft IV&V reports and formally comment before final publication, a practice they said began in the last month or two to improve transparency and timeliness. Parent said state testers have participated in more than 100 demos and that the current phase is appropriate for state user testing.

Lawmakers repeatedly emphasized the urgency of replacing a system that was central to large pandemic-era benefit and fraud issues. Several committee members asked whether Michigan is an outlier; UIA officials said fraud outcomes have improved in recent years and that Michigan now performs better on some fraud metrics than during the pandemic.

The subcommittee recorded one formal motion at the start of the hearing: Representative Kelly moved to approve the minutes of the May 20, 2025 meeting; the minutes were approved with no objections.

The committee left the record with differing views about responsibility and timing but with an updated schedule and a detailed list of governance and testing changes to monitor ahead of the December employer go‑live and the May claimant go‑live.