The California state auditor this week criticized the Department of Employment Development (EDD) for its failure to help hundreds of thousands of unemployed residents during the COVID-19 pandemic, while sending billions to inmates and scammers.
The report, released on Tuesday, describes EDD’s inadequate manipulation of an increase in unemployment insurance claims after the government ordered businesses and residents to stay home in response to the pandemic.
ARCHIVE: A person passes the California Department of Employment Development office in Sacramento, California.
(AP)
“Millions of Californians were unemployed and in critical need of assistance to replenish part of the income they depended on to pay for essential goods like housing and food,” said State Auditor Elaine Howle.
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The increase in complaints in March – and again in December amid new stoppages – created an accumulation of unresolved complaints. Howle said EDD “was not able to automatically process almost half of complaints submitted online between March and September 2020”.
The report concluded that EDD handled the increase in complaints by suspending certain eligibility requirements that inadvertently “removed a barrier to fraud”. Now, up to 1.7 million applicants who have applied in good faith may have to reimburse benefits received if EDD considers them “retroactively ineligible”.
Howle said the state “has no clear plan” to resolve the backlog, saying it “represents a workload never seen before by the department”.
“This can have significant consequences for complainants,” said the audit.
Meanwhile, at least $ 11.4 billion in unemployment benefits have been wrongly paid for fraudulent cases since March, although some estimates reach as much as $ 31 billion. The Los Angeles Times also reported last month that up to $ 400 million may have gone to the inmates, some of whom are on death row.
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The state auditor noted that EDD experienced similar problems during the Great Recession of 2008 and 2009. But, despite being aware of these shortcomings – particularly with its complaint process and call center – it did not make “any comprehensive plan of how it would respond if the experience of California “another recession and an increase in unemployment claims.
“The increase in claims in 2020 was unprecedented and would have presented significant challenges, no matter how prepared EDD was, but it failed to act comprehensively to prepare for crises and to address known deficiencies,” said the state auditor. “As a result, his areas of weakness became essential deficiencies in his response to the increase in claims, and this was a cause of serious frustration for unemployed Californians who needed assistance.“
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Fox News contacted EDD with a request for comment on the state audit, but received no response at the time of publication.