SAN DIEGO — The state legislature held up a joint hearing on the Employment Development Department on Wednesday.
You may remember the EDD paid out billions of dollars in fraudulent claims, and then it became incredibly difficult for legitimate people to file their claims.
Is the EDD making progress? The short answer is, yes.
The EDD has since implemented 19 of the 21 recommendations the State Auditor's Office gave them.
The meeting started off with Republican Assemblymember Tom Lackey holding up a large pile of audits they had sent to the EDD on how to improve their system, to which he says the legislature had minimal responses.
"We failed to protect taxpayer funds," Lackey said.
So, what was the EDD's response and update today? The State Auditor ran through a list of the changes they've made.
During the pandemic, the EDD elevated claims for manual review which takes a lot longer than electronic, so they put in an emergency processing tool.
The problem with that tool, however, is that there were relaxed eligibility criteria, which led to fraud. They fixed that.
They EDD also wasn't paying attention to key data in the call center, like how often were problems resolved on the first call?
"EDD wasn't paying attention to key data that would assist it in knowing how to improve its call center performance," said acting Deputy State Auditor, Bob Harris. "Which is an industry standard metric for call centers that essentially tells you how often do you successfully assist a caller the first time they call you so that they don't become a second or third or fourth time caller that relieves the frustration on the part of the claimant seeking assistance."
They’re tracking that data now, but they still have a lot of work to do. For example, the EDD does not track why so many people call into the department instead of using the online tool. Is it not helpful?
"If EDD does this analysis and discovers for example, that the caller didn't know about the self service option or tried to use the self-service option and encountered a problem, then that's information that EDD could then use to improve the self service options and make them more useful for Californians in need," said Harris.
The EDD Director said they are still working to try to get back the 20 billion worth in fraud they lost during the pandemic.
"We have prevented over $125 billion fraud, and we have talked about the $20 billion in fraud throughout last year in committee and that number remains the most accurate assessment of what occurred, it's about 11%," said EDD Director Nancy Farias.
They’ve acquired back $1 billion, but there are international crime rings involved with this too, and many don’t think that money will ever be seen again.
She says the EDD is working on a reboot of its online system. Something that will take years.
If we have a recession soon, what then?
The legislative analyst’s office said a recession is not going to amount to the sheer numbers of claims they saw in the pandemic. They had 20 million claims in 2020. In the great recession, they had 3.8 million.
The EDD has also been looking into potential employees from within the department who may have been complicit with the fraud.
In fact, the director said they recently arrested an employee for exactly that.
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