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RELEASE: Assemblywoman Cottie Petrie-Norris Questions EDD on Fraud Prevention and UI Delivery

State Legislators Hold EDD Oversight Hearing After Scathing Audit

For immediate release:

SACRAMENTO — At a joint oversight hearing February 3, 2021 of the Assembly Insurance Committee and Joint Legislative Audit Committees, legislators questioned the Employment Development Department (EDD) regarding recently released audits which revealed a litany of failings. The hearing was centered around the State Auditor’s findings in “EDD’s Poor Planning and Ineffective Management Left It Unprepared to Assist Californians Unprepared to Assist Californians Unemployed by COVID-19 Shutdowns” and “Significant Weaknesses in EDD’s Approach to Fraud Prevention Have Led to Billions of Dollars in Improper Benefit Payments.” It was made clear that EDD’s new leadership must implement the audit recommendations to ensure struggling Californians gets their hard-earned benefits and are able to put food on their table during these trying times.

The California State Auditor Elaine Howle told state legislators that the Employment Development Department has been aware of key operational issues – an inefficient claim filing process, a lack of available qualified staff, and poor call center management – for nearly ten years, but the department has failed to solve these long-time problems. As a result, Howle said, the economic downturn related to the COVID-19 pandemic worsened EDD’s already poor performance.

“Last week’s state audits paint a picture as clear as day,” said Accountability & Administrative Review Committee Chair Assemblywoman Petrie-Norris (D-Laguna Beach). “EDD has been mismanaged and unprepared from the very beginning. And working Californians are the ones who have suffered the consequences. The reports make it clear EDD knew better and should have done better— end of story. EDD’s new leadership must implement the audit recommendations to ensure the public gets their benefits.”

“As the auditor conveyed, the Employment Development Department was unprepared,” said Insurance Committee Chair Assemblymember Tom Daly (D-Anaheim). “The pandemic caused historic levels of claims but now, almost a year later, the department is still unprepared – unprepared for the phone calls, unprepared for the number of claims, unprepared for the re-identification process, unprepared to prevent fraud and, unprepared to handle those who may be victims of identity theft. EDD has many inadequacies. Fortunately, my colleagues and I are introducing a number of measures to address these failures. We will work together to bring these solutions to the Governor’s desk at the earliest opportunity.

“Today’s hearing confirmed our worst fears and validated the frustrations of millions of Californians,” said Joint Legislative Audit Committee Chair Assemblymember Salas (D-Bakersfield). It is clear that EDD did not prepare to meet this crisis and their dysfunction kept families from receiving desperately needed relief. We will make sure that EDD is reformed so that working families are never denied the relief they need during a crisis again. That is why I have introduced AB 56, which will force the EDD to accept and implement these reforms.” 

The full hearing can be viewed on the Assembly website