State Audit of Employment Department reveals failures impacting millions of Californians

SANTA BARBARA, Calif. - A scathing report released by the California Auditor's Office on Tuesday reveals significant failures in the state's employment system before and after the pandemic shutdowns forced millions of Californians to file for unemployment insurance.

The Employment Development Department which oversees the processing and distribution of employment insurance benefits has been under fire for its mishandling of the crisis.

Lawmakers directed the state auditor to conduct an emergency audit in September, 2020. They had questions about how federal money being sent to California to help workers who lost their jobs because of the pandemic was being spent or mishandled at the EDD.

The report reveals how the EDD ignored warnings for years to improve the performance of its call center which is supposed to help claimants navigate the system and get answers when they need it. However, the audit found the EDD answered less than one-percent of the calls to its call center when the claim surge hit in mid-March, 2020.

In our series of investigative reports, the NewsChannel 3-12 found the EDD and state lawmakers failed for years to keep up with technology capable of processing claims effectively and identifying fraudulent claims. Recent estimates put fraud losses at an estimated 11-billion dollars.

Click here to read the audit report and the response from the EDD Director.