Sunset Commission Notes TWC Technology Modernization Problems

A new Sunset Advisory Commission staff report recommends the Texas Workforce Commission (TWC) strengthen its technology planning, procurement, data governance and system launch controls after modernization problems affected workforce and childcare services.

The June report, released as part of the 2026-2027 review cycle, covers TWC, the Texas Workforce Investment Council and the Purchasing from People with Disabilities Program. The report includes a dedicated issue on the agency’s IT modernization efforts and says problems with technology and data infrastructure have hindered system performance, accountability and data-driven decision-making.

TWC administers unemployment insurance, childcare subsidy and quality initiatives and federal workforce programs including vocational rehabilitation. Sunset staff found that new federal funding laws, the transfer of vocational rehabilitation responsibilities and the COVID-19 pandemic put pressure on the agency after its last Sunset review. The report says transformative changes at TWC have stalled.

The report says TWC relies on a large and complex IT enterprise to deliver workforce and childcare services, track performance and ensure programs operate across the state. However, Sunset staff found that recent modernization efforts have resulted in systems that were delayed, scaled back or deployed before they were fully functional. Those systems often require ongoing fixes, create unreliable data and increase administrative burdens for the agency and stakeholders, according to the report.

One example cited in the report is the rollout of TWC’s childcare case management system. Sunset staff said stakeholders raised concerns that the system launched with payment delays to providers, data errors and continuing functionality issues. The report ties those problems to broader concerns about how the agency plans, procures and launches technology projects.

Sunset staff recommended that TWC develop a two-year strategic IT modernization plan aligned with the state budget timeline and subject to formal commission approval. The report also recommends that TWC revise its IT procurement framework to include necessary staff.

The recommendations also address system launches and data governance. Sunset staff recommended mandatory, program-led go/no-go criteria for all major system launches. Staff also recommended that TWC prioritize completion of a unified data model and ensure agencywide alignment with enterprise data governance policies.

The report includes other technology-related findings outside the main modernization section. Sunset staff found that TWC needs better processes and tools to deter and penalize fraud, including clearer authority to require identification verification for unemployment insurance claimants and authority to use bank levies to recover fraudulent overpayments. Staff also recommended clear procedures for agency staff to supervise childcare fraud investigations conducted locally.

Childcare data collection is another area of concern. Sunset staff found that TWC uses outdated methods for surveying childcare providers and recommended that the agency issue a new request for proposals for the market rate survey contract, including a requirement for hybrid, up-to-date survey methods.

The review also identifies a need for TWC to address its use of artificial intelligence systems. Sunset staff recommended that the agency update policy guiding its rule review process and track and evaluate metrics on its use of AI systems.

Sunset staff recommended continuing TWC for 12 years. The staff report is part of the Sunset review process and Sunset publications are updated throughout an agency’s review cycle.