Documented problems

Failures, overruns and audit findings on state tax and payroll systems, each stated as the source states it. This is a starting list, not a ranking.

Every fact links to its source and carries a label: Public record Vendor claim Press / secondary

• Maryland, unemployment insurance (Sagitec): Employer tax collections not reconciled to the bank since the 2020 launch; up to $760.7M in claimant overpayments no longer collectable; 17 months of work approved retroactively. source Public record details
• Maryland, tax (RSI): Rebaselined in 2023 (two years late); project estimate grew from $159M to $200M to $225M; completion now 2030. source Public record details
• WyCAN consortium (Wyoming, Colorado, Arizona, North Dakota), unemployment insurance (HCL America (named in Colorado's contract record; GAO does not name it)): Could not deliver a working system; work stopped in 2015 after $16.7M was paid. source Public record details
• Pennsylvania, unemployment insurance (IBM): The 2006 IBM contract ($109.9M) was to deliver wage records, employer tax and benefits; it expired in 2013 having cost nearly $170M, with the benefits system never completed. The state sued in 2017 and settled in 2021. The IBM-built employer tax system is still in use. source Public record details
• Florida, unemployment insurance (Deloitte): CONNECT launched in October 2013; the Auditor General put total project cost at $77.9M as of November 2014, with $40.6M paid to Deloitte and $47M expected. source Public record details
• California, unemployment insurance (Deloitte): The Markup reports that Deloitte's 2010 unemployment system overhaul halted about 300,000 payments and cost about $110M, roughly double the estimate. source Press / secondary details
• Ohio, unemployment insurance (Sagitec): Contract ended in January 2023 after the vendor's principals were indicted in a trade secrets case. source Press / secondary
• Hawaii, unemployment insurance (Solid State, then Netacent): A 2021 contract was cancelled in 2022 amid a vendor dispute; the replacement contract is $46.8M. source Press / secondary
• Michigan, unemployment insurance (FAST Enterprises (MiDAS)): Michigan's own 2017 review of fraud cases from October 2013 to August 2015 found that 85% of 40,195 fraud findings made by the computer program without an appeal were reversed. source Public record details
• Michigan, tax (FAST Enterprises): Individual income tax moved to GenTax on 11/12/2025; in the 2026 filing season about 250,000 filers were still waiting on refunds in June, and officials told a House committee they would waive penalties for affected taxpayers. source Press / secondary details
• Virginia, unemployment insurance (HCL America): Modernization began in 2009 and was due in 2013; the employer tax system went live in 2015 and benefits in November 2021. The budget grew from $54M to $100M. source Public record details
• Delaware, unemployment insurance (Infosys Public Services): Awarded in December 2023; by 2025 the state limited the vendor to employer contributions and paid leave, returned benefits to the mainframe after a claims backlog, and plans to rebid the benefits work. source Public record details
• District of Columbia, unemployment insurance tax (Sagitec (2020 contract)): The UI tax system has not been replaced: the statutory deadline was 9/30/2022, and in April 2026 the agency told the Council the replacement was still in the solicitation phase. source Public record details
• Florida, unemployment insurance (2023) (Strategic Cloud Communications with Tata Consultancy Services): A $24.3M user interface contract executed in February 2023 was terminated for convenience in October 2023, after the contractor forecast launching with about one-sixth of the required functionality. source Public record details

Context

• GAO added unemployment insurance to its High-Risk List in June 2022. As of June 2023, 34 of 53 states and territories still ran legacy IT systems for UI benefits, tax or both. source Public record
• FAST Enterprises' 2026 GenTax brochure claims clients in 35+ U.S. states. source Vendor claim
• A federal court denied Sagitec's motion to dismiss or transfer Deloitte's copyright and trade secret suit over Deloitte's uFACTS UI software (D. Del. No. 23-325, 9/15/2023). source Public record