Pennsylvania Department of Labor and Industry Secretary Julia Hearthway said that an IBM system for calculating unemployment benefits was 42 months behind schedule and more than $60 million over budget.

“The bottom line is that the problems we’ve identified cannot be solved and we will not renew our contract with IBM,” Hearthway said in a statement. “The level of risk, combined with the critical nature of the system, demands that the Department of Labor and Industry has a system that produces timely decisions reliably and accurately.”

IBM’s Unemployment Compensation Modernization System (UCMS) was designed to calculate and provide unemployment compensation benefit payments in Pennsylvania.

A Carnegie Mellon University study of the UCMS program analyzed the system in three key areas: case management and wage records; employer tax; and claims processing, payments and appeals.

The UCMS program development contract was awarded in June 2006 to IBM, during the previous administration, to provide updated technology for the delivery of unemployment compensation benefits.

Between 2007 and early 2011, a number of program risks and issues were identified; however, the project was already significantly over budget without any measurable solutions.

A call to IBM was not returned.