The multi-state disruption prevented an estimated 121,000 families in Pennsylvania from receiving approximately $27 million collectively in scheduled payments, Human Services Press Secretary Brandon Cwalina said.
Conduent State & Local Solutions Inc., a New Jersey -based company, collects and pays out child support as part of its contract with DHS. In an updated statement Wednesday, company spokesperson Sean Collins said a "cybersecurity incident" was to blame.
"Conduent experienced an operational disruption due to a cybersecurity incident. This incident was contained and all systems have been restored. Maintaining system integrity and functionality is as important to us as it is to our clients," Collins said in an email to CNHI Pennsylvania.
According to Cwalina, the system was back online Monday. He said all payments backlogged from last week were to begin to be reimbursed by Tuesday's end.
Collins wouldn't provide specifics as to the scope or cause of the disruption. He didn't answer questions about how many states might be impacted or whether the firm has been in touch with law enforcement or other government entities. It's unknown when the issue began though it's believed to have occurred at least as early as Jan. 13.
"We experienced a service interruption that affected the Pennsylvania State Disbursement Unit's ability to process payments. The Conduent technology team worked to resolve the issue. We sincerely regret the inconvenience this incident may have caused," Collins said Tuesday.
TechCrunch, a technology news website, cited an unidentified source in reporting that a cyber attack caused the "service interruption" in benefits and support payments in multiple states. According to the news site, Collins declined to answer questions or confirm whether a cyber attack occurred.
Multiple news outlets in Wisconsin reported on in-state child support payment disruptions. The Wisconsin Department of Children and Families issued a statement Friday that Conduent was "currently working to rebuild their server" and that four states including Wisconsin were impacted. On Sunday, the Department updated on social media that the outage was resolved and that Conduent "brought in additional staff to help expedite the processing of delayed payments."
Conduent has multiple contracts with Pennsylvania departments for varied services including PennDOT, Treasury and General Services. The company operates its Pennsylvania services from an office in Middletown. DHS entered a business planning services contract with Conduent valued at $16.8 million beginning in June 2022. Among the services provided is the operation of payment processing for the Pennsylvania Automated Child Support Enforcement System.
According to contract documents, Conduent began working on the system with Pennsylvania in 1993 when it was part of Lockheed Corp. It became a standalone company in 2017 after splitting from Xerox Corp. In 2019, Conduent processed 6 million child support payments for Pennsylvania totaling $1.3 billion in disbursements.
The company has a second five-year contract with DHS valued at $10.3 million that expires in 2028. Under the terms, Conduent supplies and supports the Electronic Benefits Transfer System for benefits payments including for the Supplemental Nutrition Assistance Program. Last summer, the system was targeted by a card-skimming scheme in Western Pennsylvania.
The Southeastern Pennsylvania Transportation Authority is also a customer, for now. According to KYW Newsradio of Philadelphia, the SEPTA board meets this week to vote on a new contractor to operate its key card fare collection system amid a rash of system malfunctions last year. Conduent operates the current system, which KYW reports "has been prone to glitches and millions in cost overruns since it was introduced in 2016."
Gov. Josh Shapiro announced in November that Pennsylvania would flex approximately $153 million in federal highway funding to SEPTA to sustain operations ahead of the next state budget due July 1.
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