Name: California EDD audit details failures of ‘ill prepared’ unemployment agency
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California EDD audit details failures of ‘ill prepared’ unemployment agency

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AdvertisementCalifornia EDD audit details failures of ‘ill prepared’ unemployment agencyHide TranscriptShow TranscriptSTATE AUDITOR FOUND UNEMPLOYMENT CALIFORNIANS COULD GET HIT WITH YET ANOTHER BILL. &gt;&gt; RELEASE THIS MORNING THE FIRST OF TWO AUDITS OF EDD. THIS ONE REQUESTED BY STATE LEGISLATURES. BUT STATE AUDITOR ELAINE HOWELL SAYS SOME OF THE THINGS SHE FOUND IN THIS EMERGENCY AUDIT SHE HAD SEEN BEFORE. &gt;&gt; THEY WERE STILL DOING A LOT OF THINGS MANUALLY, WHERE THEY KNEW YEARS AGO, JUST UNDER NORMAL CIRCUMSTANCES, NOT NECESSARILY NORMAL, BURNED A RECESSION, WHERE WE HAVE A SURGE OF CLAIMS, NOTHING LIKE IN THE PANDEMIC, BUT CERTAINLY AN INCREASE IN UNEMPLOYMENT IN CALIFORNIA, WE HAVE ALL OF THESE MANUAL PROCESSES THAT TAKE TOO MUCH TIME. &gt;&gt; THE AUDIT FOUND THAT LACK OF AUTOMATION CONTINUES TO SEVERELY SLOW DOWN CLAIMS. AND THE EDD CALL CENTER WAS BARELY HELPING PEOPLE CALLING IN WITH CLAIMS. SOMETHING HAL HAD FOUND BEFORE. EVEN THOUGH THEY HAD IMPLEMENTED THE NEW CALL SYSTEM PEOPLE STILL COULD NOT GET THROUGH. &gt;&gt; THAT WAS FIVE YEARS AGO. TODAY THE PROBLEMS ARE EVEN WORSE EVEN AFTER GAVIN NEWSOM RECOMMENDED MORE THAN 5,000 NEW HIRES TO HELP WITH THE PHONE LINES. &gt;&gt; THE PERCENTAGE WAS ABOUT 1% OF INDIVIDUALS GETTING THROUGH WERE ABLE TO SPEAK TO AN AGENT, AND IN MANY CASES, EVEN WHEN THEY GOT TO AN AGENT THAT INDIVIDUAL DID NOT HAVE AN UNDERSTANDING OF THE ENTIRE ELIGIBILITY SYSTEM, ALL THE RULES AND REGULATIONS RELATED TO UNEMPLOYMENT INSURANCE SO THAT PERSON WASN'T ABLE TO HELP THE INDIVIDUAL WHO CALLED IN AND GOT THROUGH, SO THEY HAD TO BE PUT ON A CALLBACK LIST. &gt;&gt; HE SAYS EDD DID NOT LEARN THE LESSONS OF THE GREAT RECESSION. &gt;&gt; THE DEPARTMENT SIMPLY DID NOT PREPARE FOR ANOTHER SURGE IN UNEMPLOYMENT, AND EDD'S EFFORTS TO SPEED UP CLAIMS BY ELIMINATING THE NEED TO PROVE ELIGIBILITY SIMPLY CREATING ANOTHER PROBLEM. POSSIBLE FRAUD. &gt;&gt; NOW, SOME OF THOSE CLAIMS WILL BE FRAUDULENT CLAIMS. WE KNOW THAT BUT THERE ARE GOING TO BE MANY PEOPLE WHO, YOU KNOW, IN GOOD FAITH, SUBMITTED INFORMATION AND PERHAPS DIDN'T SUBMIT EVERYTHING THEY NEEDED TO BE ELIGIBLE. NOW THEY WILL HAVE TO WORK TO PROVE THEIR ELIGIBILITY OR THEY WILL HAVE TO PAY THEIR MONEY BACK. &gt;&gt; BOTH SIDES OF THE AISLE SAY EDD AND THE GOVERNOR NEED TO ADDRESS THE PROBLEMS IMMEDIATELY. &gt;&gt; THIS AGENCY HAS TO BE REHAULED FROM TOP-TO-BOTTOM. IT HAS TO BE COMPLETELY REFORMED. ITS CULTURE, PROCEDURES, HOW IT ADDRESSES AND WORKS WITH THE PUBLIC. HOW IT DEALS WITH FRAUD. &gt;&gt; THERE IS A RESPONSIBILITY FOR THAT GOVERNOR TO LOOK AT THIS AUDIT AND SAY, THEY ARE RIGHT. IT WAS REALLY A KING SIZE MESS UP. WE'RE GOING TO TAKE ALL OF THESE RECOMMENDATIONS AND WE'RE GOING TO STEP THROUGH. &gt;&gt; IT'S AGREED WITH THE AUDIT'S FINDINGS AND RECOMMENDATIONS, INCLUDING MAKING SOME OF THE AUTOMATED SYSTEMS TEMPORARILY IN PLACE NOW PERMANENT. LIKE I.D. VERIFICATION THAT WOULD HELP REDUCE ONGOING BACK LOGS. HE ALSO RECOMMENDS TRACKING CALL CENTER PERFORMANCE AND FIXING THE ELIGIBILITY DETERMINATIONS. SOME MORE CALIFORNIANS DON'T FACE BILLS OF OVERPAYMENT. ALL OF THOSE CHANGES HAVE DEADLINES BUT HAL SAYS OVERSIGHT IS KEY. IN SACRAMENTO, BRITTANY JOHNSON, KCRA NEWS. &gt;&gt; THE STATE AUDITOR SAYS EVEN IF EDD DID NOT OVERPAY, SOME CLAIMS, MORE THAN TWO MILLION THAT WERE RUN THROUGH WITHOUT VERIFICATION WILL HAVE TO BE REVIEWED AND IT WILL TAKE A LONG TIME. EDD SENT A STATEMENT SAYING WE RECOGNIZE THE WORK THAT LIES AHEAD AND A COMMITTED TO IMPLEMENTNG ALL THE RECOMMENDATIONS. A STATEMENT WAS SENT TODAY THAT READS THIS REPORT CONFIRMS WHAT I'VE HEARD FROM THOUSANDS OF PEOPLE -- WHAT'S CLEAR IS THE AGENCY FAILED REPEATLY TO DO ITS JOB. THERE HAS TAdvertisementCalifornia EDD audit details failures of ‘ill prepared’ unemployment agencyUnprepared, poor planning and ineffective management. That’s how California State Auditor Elaine Howle describes the inner workings of the state's Employment Development Department.The emergency audit, called for by dozens of lawmakers from both sides of the aisle, was approved in September and came out Tuesday morning.The audit makes some key points about what is said were poor decisions by Employment Development Department staff:Employment Development Department changed processes in the beginning of 2020, after shutdowns during the pandemic. That was supposed to process and pay claims faster, but those changes are temporary and were also responsible for opening the department up to what we now know is $11 billion in fraud — a number that could rise up to $30 billion. Those changes also will lead to further challenges down the line. Since the department delayed eligibility determinations in an effort to just begin making payments, millions of Californians who got Employment Development Department benefits could be on the hook for re-payments. This is because they were not eligible to get back payments, but got them anyway. Decisions by EDD employees to make payments anyway will ultimately lead to millions of overpayments.The Employment Development Department call center was run poorly well before the 2020 pandemic occurred. From 2010-2020, the center did not handle calls well — roughly 1% of calls were able to help consumers. In 2020, even after Gov. Gavin Newsom announced that he was adding staff to the Employment Development Department and opening a new call center, the call center was ineffective and continues to be so. "Despite knowing for years that it had problems with call center performance, Employment Development Department has not yet adopted best practices for managing the call center, leaving it ill-prepared to assist Californians effectively," Howle said in a letter accompanying the audit. Employment Development Department was aware of its failings, particularly during the Great Recession. Employment Development Department, rather than preparing for another economic downturn, operated the same as it always had. Employees and managers inside Employment Development Department did not prepare for the worst, and when the 2020 state shutdown happened, that made a big problem inside the agency even worse.The automation that was supposed to help process claims was still not effective and a large number of claims were manually processed. As a result, 800,000 claims waited far beyond the 21-day threshold that Employment Development Department spokespersons said most people were getting paid by.In all of this, Employment Development Department leaders released sporadic and confusing information about the number of people stuck in the backlog. When claims hit unprecedented levels, Employment Development Department said they did not track those numbers.| VIDEO BELOW | California lawmaker responds to report of billions in unemployment fraudTo date, the Employment Development Department has released different backlog numbers to separate out the 1.5 million people described by the governor’s strike team. They include an “initial claims backlog” and a “continued claims backlog.” The auditor, and critics in the legislature, said that Employment Development Department promised not only to clear the backlog but that they would be able to keep up with current applications. As such, the auditor says that by March there should be a single report, or dashboard, showing just how many people are waiting in the backlog.The call center needs to improve by May, including tracking why callers need assistance and tracking whether or not they resolve the issues successfully.And EDD must determine how many of these temporary automation measures they put in place can stay in place — and by September make them permanent.In the end, the report details a massive failure by Employment Development Department employees, management and staff to prepare for even another recession. As a result, the state of California not only paid out billions in fraud, but Californians may end up with bills for overpayment.The audit received a strong response from legislators on both sides of the aisle, who say that EDD and Governor Gavin Newsom needs to address the problems immediately."This agency has to be resolved from top to bottom and has to be completely reformed -- its culture, its procedures, how it addresses and works with the public, how it deals with fraud," said David Chiu, a Democratic Assemblymember in San Francisco."There is a responsibility for the governor to look at this audit and say, you know, they're right, there was really a king sized mess up, we're going to take all of these recommendations, and we're going to step through them," said Jim Patterson, a Republican Assemblymember in Fresno.| More | EDD backlog and fraud timeline: How we got hereRep. Josh Harder, who previously told KCRA 3 Investigates about hundreds of calls his office has received from people with legitimate unemployment cases unable to get their benefits, said Tuesday that the auditor's report confirmed "the EDD is a complete mess."The Modesto Democratic congressman said "we need top to bottom reform." “The agency said they will resolve 1.6 million backlogged claims by tomorrow. I truly hope that is the case, but I’ll believe it when I see it," he said in a statement. "We’ve seen more happy talk from the agency than actual results so far. Their mismanagement has caused hundreds of thousands of California families to miss out on money they need to pay their bills. I will be watching like a hawk to see how the implementation of these suggested reforms go."The Employment Development Department sent KCRA 3 News the following statement:"We recognize the work that lies ahead and are committed to implementing all of the auditor's recommendations."Unprepared, poor planning and ineffective management. That’s how California State Auditor Elaine Howle describes the inner workings of the state's Employment Development Department.The emergency audit, called for by dozens of lawmakers from both sides of the aisle, was approved in September .AdvertisementThe audit makes some key points about what is said were poor decisions by Employment Development Department staff:In all of this, about the number of people stuck in the backlog. When claims hit unprecedented levels, Employment Development Department said they did not track those numbers.| VIDEO BELOW | California lawmaker responds to report of billions in unemployment fraudTo date, the Employment Development Department has released different backlog numbers to separate out the 1.5 million people described by the governor’s strike team. They include an “initial claims backlog” and a “continued claims backlog.” The auditor, and critics in the legislature, said that Employment Development Department promised not only to clear the backlog but that they would be able to keep up with current applications. As such, the auditor says that by March there should be a single report, or dashboard, showing just how many people are waiting in the backlog.The call center needs to improve by May, including tracking why callers need assistance and tracking whether or not they resolve the issues successfully.And EDD must determine how many of these temporary automation measures they put in place can stay in place — and by September make them permanent.In the end, the report details a massive failure by Employment Development Department employees, management and staff to prepare for even another recession. As a result, the state of California not only paid out billions in fraud, but Californians may end up with bills for overpayment.The audit received a strong response from legislators on both sides of the aisle, who say that EDD and Governor Gavin Newsom needs to address the problems immediately."This agency has to be resolved from top to bottom and has to be completely reformed -- its culture, its procedures, how it addresses and works with the public, how it deals with fraud," said David Chiu, a Democratic Assemblymember in San Francisco."There is a responsibility for the governor to look at this audit and say, you know, they're right, there was really a king sized mess up, we're going to take all of these recommendations, and we're going to step through them," said Jim Patterson, a Republican Assemblymember in Fresno.| More | Rep. Josh Harder, who about hundreds of calls his office has received from people with legitimate unemployment cases unable to get their benefits, said Tuesday that the auditor's report confirmed "the EDD is a complete mess."The Modesto Democratic congressman said "we need top to bottom reform." “The agency said they will resolve 1.6 million backlogged claims by tomorrow. I truly hope that is the case, but I’ll believe it when I see it," he said in a statement. "We’ve seen more happy talk from the agency than actual results so far. Their mismanagement has caused hundreds of thousands of California families to miss out on money they need to pay their bills. I will be watching like a hawk to see how the implementation of these suggested reforms go."The Employment Development Department sent KCRA 3 News the following statement:"We recognize the work that lies ahead and are committed to implementing all of the auditor's recommendations."Loading more articles...

AdvertisementCalifornia EDD audit details failures of ‘ill prepared’ unemployment agencyHide TranscriptShow TranscriptSTATE AUDITOR FOUND UNEMPLOYMENT CALIFORNIANS COULD GET HIT WITH YET ANOTHER BILL. &gt;&gt; RELEASE THIS MORNING THE FIRST OF TWO AUDITS OF EDD. THIS ONE REQUESTED BY STATE LEGISLATURES. BUT STATE AUDITOR ELAINE HOWELL SAYS SOME OF THE THINGS SHE FOUND IN THIS EMERGENCY AUDIT SHE HAD SEEN BEFORE. &gt;&gt; THEY WERE STILL DOING A LOT OF THINGS MANUALLY, WHERE THEY KNEW YEARS AGO, JUST UNDER NORMAL CIRCUMSTANCES, NOT NECESSARILY NORMAL, BURNED A RECESSION, WHERE WE HAVE A...

California EDD audit details failures of ‘ill prepared’ unemployment agency

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