Senate Bipartisan Study looks at State Contracts for Benefit Cards

OKLAHOMA CITY – Sen. Chuck Hall, R-Perry, and Sen. Mary Boren, D-Norman, held a bipartisan study Tuesday to examine Oklahoma’s use of pre-paid benefit cards. The state contracts with New Jersey-based Conduent for a majority of state benefit cards including tax refunds, government assistance and unemployment benefits.

“The legislature’s job is to ensure Oklahomans’ tax dollars are used as efficiently as possible for state services and programs. This is especially true when it comes to the awarding of state contracts. This study provided us a better understanding of the relationship we have with vendors in the State of Oklahoma, particularly with Conduent,”

Hall said. “We’ve worked our way through a pandemic that none of us could have been prepared for, and we will learn valuable lessons from this, particularly with the services we provide through the state. We learned there’s room for improvement as it relates to providing payment services to our constituency and that there are opportunities we can take advantage of as we go to negotiate these terms and agreements with vendors providing these services.”

Since the pandemic hit the state in March, Conduent has come under scrutiny as thousands of Oklahomans were unable to access their unemployment benefits. Conduent representatives explained that in the beginning of the pandemic, they faced numerous problems including having to set up an expensive infrastructure to allow for telework as much of their staff did not want to return to work. Volume to their call center also increased significantly forcing them to hire additional staff. While customers were having to wait on hold for hours on end at one point, Conduent says with service improvements wait times are currently averaging just over two minutes.

Oklahoma Employment Security Commission (OESC) Director Shelley Zumwalt discussed numerous problems her agency has experienced with Conduent. OESC has sought information concerning why the company has limited claimants’ access to their funds or cards have been deactivated.

Zumwalt said that OESC can verify that some of the claimants experiencing roadblocks are legitimate yet they can’t get Conduent to release their funds in a timely manner. Claiming privacy standards for their customers, Conduent said that OESC would have to issue a “friendly subpoena” to get the information. OESC is working with the state Attorney General’s office.

Zumwalt acknowledged that ending Conduent’s contract would be more problematic by further disrupting services.  Her suggestions for future contract improvements included being more transparent with customers and not charging them a fee when they have to make multiple monthly calls to check on the status of their money.

Conduent explained that the first five calls are free to their call center, but customers are charged 25 cents for all additional calls made in a month. Conduent refused to share with the committee how much revenue the fee produces. Zumwalt also urged more partnership between Conduent and state agencies to improve financial transparency and reduce fraud.

“The debacle with the unemployment funds has been a nightmare for thousands of Oklahomans. No system is perfect and mishaps can occur but when it comes to people’s lives, there is no room for error especially at this astronomical level,” Boren said. “We’re anxious to find bipartisan solutions to ensure this type of tragic situation never happens again and that Oklahomans get the benefits they are promised. We learned a lot in this study so that the next time we negotiate these contracts we can do a better job preparing for unexpected situations to best protect Oklahomans.”

Other presenters included State Treasurer Randy McDaniel, Oklahoma Tax Commission Director Jay Doyle, Department of Human Services Director Justin Brown and Secretary of Digital Transformation and Administration David Ostrowe.

Presenters shared their clients’ preferences in receiving state benefits whether through direct deposit or debit card. They also discussed their contracts and how some also have sub-agreements. Treasurer McDaniel pointed out that his office relies on agencies to report any problems regarding such vendor contracts to them as they do not have access to all subcontract data, which can prove problematic.