PROVIDENCE, R.I. — Deloitte Consulting, the contractor for the state's troubled public-benefits computer system, has agreed to credit the state $27 million to cover problems associated with the system's launch.

Gov. Gina Raimondo’s administration announced the agreement Thursday, calling it proof of significant progress being made just hours before the House Oversight Committee’s latest scheduled probe into the Unified Health Infrastructure Project.

But the so-called good news hailed by the administration received nary a mention from lawmakers in the first two hours of the oversight hearing. Instead the panel was outraged by a new discovery that the state was fined $805,195 in January for amending its contract with Deloitte, allegedly without required approval from the federal government.

The penalty was brought to light by Auditor General Dennis E. Hoyle. He forwarded the committee a bill the Federal Food and Nutrition Service sent to the state on Jan. 5. The fine followed a Nov. 3, 2016 letter to the state requesting information about the contract amendments that was never answered.

House Oversight Committee Chairwoman Patricia Serpa, D-West Warwick, repeatedly asked acting Department of Human Services Director Eric Beane why the fine wasn’t disclosed as the committee asked for all relevant information about the project.

“This is not small potatoes … This is a fine of nearly $1 million,” Serpa said, later suggesting that the committee should look into whether it can put witnesses under oath to compel truthful testimony.

Beane said it was an oversight that information about the fine was not shared with the committee. It has been appealed, and the state believes it will be dismissed, he said. Beane was unable to answer specific questions about the nature of any changes to the contract.

Rep. Daniel McKiernan, D-Providence, said it appeared to him that the administration is "hiding information." He noted that the committee asked in December if the project was on budget.

“Here’s the double speak that we got back” shortly after the state received the $805,195 bill, McKiernan said. “We are closely monitoring the impact of system implementation on our UHIP project budget … blah blah blah blah.”

“This is not circle the wagons time," McKiernan said. "This is time to tell us what the heck is going on.”

Lawmakers gave Beane a litany of questions to answer about the fine at the committee's next meeting.

As for the $27 million credit announced Thursday, it will cover the "temporary hiring surge" at DHS and other personnel expenses. It will also pay for contracted service expenses for the remainder of the current fiscal year and the first quarter of fiscal 2018, Raimondo's office said.

The governor called the credit "a good faith effort to offset the state's unanticipated expenses." However, the $27 million does not represent a "final settlement."

The state has been withholding payments to Deloitte at Raimondo's direction since a February assessment of UHIP concluded the computer system was not ready when it launched in September 2016.

The state had budgeted $68.5 million for UHIP in the current fiscal year. By the time all upgrades are complete, the system is expected to tally $364 million.

Raimondo's office offered this description of the $27 million: "It is a voluntary credit from Deloitte and does not amount to an admission of liability or a waiver of any potential legal claims from either the state or Deloitte. In addition, the state's right to seek recovery for other unanticipated costs, expenses and impacts arising out of the project are preserved, including expenses that may arise as the stabilization process moves along."

The U.S. Department of Justice is also investigating potential false claims for payment that Deloitte made to the state for the project.

Earlier this week state officials declared they were making progress as an application backlog that has been growing for six months finally "stabilized."

Lobby wait times at customer service offices are reportedly the shortest they've been since the system launched last year.

— jbogdan@providencejournal.com

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On Twitter: @JenniferBogdan