By MADISON HIRNEISEN
THE CENTER SQUARE
(The Center Square) – More than two years after California’s Employment Development Department was flooded with unemployment claims and saw billions in fraudulent benefits, state auditors say the department has made progress, but “time will tell” if it’s prepared for the next downturn.
State auditors told lawmakers this week that EDD has implemented 19 of the 21 recommendations made in recent audits, declaring that the department has come a “long way” since the early days of the pandemic when jammed phone lines and stalled payments left customers on hold for hours at a time. A recent report from the Legislative Analyst’s Office found that as many as 5 million claimants experienced payment delays during the pandemic, and as many as 1 million were improperly denied benefits.
The department still needs to resolve customer service issues at its call center. Identifying “why people choose to call the call center for assistance rather than use the self-service options” on the EDD website is a concern, Acting Deputy State Auditor Bob Harris said. He also told lawmakers that the EDD needs to “sustain” its progress to ensure it can provide “effective service” in the future.
Mr. Harris emphasized that the department has made “significant progress” in addressing many issues exposed at the start of the pandemic, but when asked by lawmakers if the department is adequately prepared for the next economic downturn, his answer was uncertain.
“Are we better prepared than we were before? Yes,” Mr. Harris said. “Are we prepared enough? Time will tell.”
In terms of addressing fraud, EDD officials said Wednesday that the department had blocked over $125 billion in fraudulent attempts. Officials also said their estimate that $20 billion in fraudulent payments were distributed during the pandemic remains the most “accurate assessment” despite recent media reports indicating that number could be billions higher.
EDD Director Nancy Farris told lawmakers that more than $1 billion in fraudulent benefits had been recovered thus far, adding that the department has enacted identity verification measures to thwart future fraud attempts through ID.me.
“This enhancement helps expedite the process of verifying claimants’ identities, reduces the backlog of claims requiring manual review, and stops fraud before it happens by preventing imposters from filing a claim through UI Online,” Ms. Farris said.
Lawmakers emphasized the importance of resolving the remaining problems at the EDD, particularly as the state braces for a possible recession. Though EDD has been required through Senate Bill 390 to develop a recession plan, some lawmakers raised concerns about the time it takes to train staff, interfering with the efficiency of getting claims paid out.
Assemblyman Jim Wood said some of his own staff in his district office had to step in during the pandemic to address the “logjam” at EDD. He shared the story of one of his constituents who waited on hold for 11 hours with EDD and said the department’s identity authentication process “made the process nearly impossible for legitimate claimants.”
Assemblyman Wood also pondered the number of individuals denied benefits from the EDD and the state’s rent relief program, which struggled to get payments out to people in need.
“Can you imagine the stress of an individual who can’t get their money from unemployment and can’t pay their rent because they can’t access that program either,” Assemblyman Wood said. “I know that’s not the focus, but it’s just a domino effect. And these are real people’s lives.”