Image via iStock
The extent to which California’s unemployment department has failed to address rampant fraud came into clearer focus on Thursday, when the state auditor released her second report of the week on the Employment Development Department.
Despite repeated warnings from federal authorities that fraudsters would target California, EDD waited six months and processed 7.4 million claims before it began flagging addresses with unusually high numbers of claims, the audit found. In “the most egregious example,” more than 1,700 claims came from a single address. EDD also paid $10.4 billion to claimants with unverified identities and $810 million to prison inmates. State labor officials confirmed this week the total fraud could reach $31 billion.
- Assemblymember Cottie Petrie-Norris, a Laguna Beach Democrat: “This audit makes it clear that EDD lost billions of taxpayer dollars not because they were outwitted by criminal masterminds, but because of basic failures and downright inexcusable mistakes.”
Among State Auditor Elaine Howle’s other findings:
- EDD ordered Bank of America to freeze 334,000 debit cards due to fraud concerns — but EDD doesn’t know which accounts were frozen or which need to be unfrozen.
- EDD doesn’t monitor or assess its fraud prevention tools to determine whether they’re successful.
- EDD in September implemented ID.me, a new identity-verification tool, to speed up processing times — but the department requires claimants to verify their identities again after going through ID.me, delaying processing times.
- EDD had 77,000 unresolved identity-fraud complaints as of November.
Citing EDD’s “uninformed and disjointed techniques” for preventing fraud, Howle recommended the department set up by March a central fraud unit and develop a plan by May to assess its fraud prevention tools. EDD said it would implement the recommendations — but the department hasn’t always made good on its promises. The audit Howle released Tuesday found EDD has failed to address key operational issues it’s known about for more than a decade.
EDD said Thursday it has cleared 99.9% of the backlog of 1.6 million claims first identified in September. But a new backlog has been growing in the meantime — and it reached 974,693 claims on Thursday, the highest total in months. When added to the 1.4 million claims EDD is re-verifying due to potential fraud, which makes for a functional backlog of around 2.4 million claims.
By Common Dreams Licensed under a Creative Commons Attribution-Share Alike 3.0 License
-
Attacks on Asian American Communities Rising
When a new wave of anti-Asian violence was recently reported to be hitting the Bay Area, news media left us with an impression that we were in the midst of a conflict pitting Blacks against Asians.
-
CA eases way for schools to reopen full-time
California just made it significantly easier for K-12 schools to bring students back to campus full-time — but some of the state’s largest districts and most powerful unions are pushing back, suggesting that hundreds of thousands of students may not receive daily in-person instruction this school year.
-
Putting her children before the fields
On average, one in eight Californians have been late on rent during the pandemic, and the majority of them are single mothers.
-
California to hit critical milestone for reopening today
Here’s what you need to know about what happens next when the state delivers 2 million COVID-19 vaccine doses to low-income communities.
