Report: EDD knew of call center woes for a decade

California’s labor agency was woefully unprepared for the recession-linked spike in jobless claims last year and may continue to face a stubbornly high backlog of unpaid unemployment claims, according to a scathing report released Tuesday by the state auditor.

The state auditor listed an array of failures and mishaps at the Employment Development Department, which has consistently faltered in its efforts to pay benefits to workers who lost their jobs in record numbers amid coronaviruslinked business shutdowns ordered by state and local government agencies.

The EDD’S problems during 2020 and so far in 2021 include a broken call center that can only handle a tiny fraction of phone calls from jobless California workers, a computer page hobbled by glitches, a wave of fraudulent claims, and a mammoth backlog of unpaid unemployment claims.

“EDD has known that they had these kinds of problems for over a decade, through two administrations,” said state Assemblymember Jim Patterson, a Republican whose district includes eastern Fresno County and parts of Tulare County. “They were repeatedly warned. They knew it and they got caught flatfooted.” The time period includes the gubernatorial administrations of Jerry Brown and Gavin Newsom, both Democrats.

Among the primary findings in the state auditor’s report:

• Significant weaknesses in EDD’S claims processing and workload management leave the agency at risk of a continuing backlog of claims.

• The EDD responded to the surge in claims by suspending certain eligibility requirements, and many Californians now are at risk of needing to repay benefits.

• The department took uninformed and inadequate steps to resolve its call center deficiencies.

• Despite multiple warnings, the agency failed to prepare for an economic downturn.

Adding to the woes at the EDD is the disclosure that nearly 27% of the payments it issued from early March 2020 through mid-january 2021 were fraudulent disbursements — amounting to a jaw-dropping total of $30 billion in payments.

“EDD failed to act comprehensively to prepare for downturns and to address known deficiencies,” the state auditor reported on Tuesday. “In March 2020, EDD had no comprehensive plan for how it would respond if California experienced a recession and UI (unemployment insurance) claims increased correspondingly.”

As a result, the department’s weaknesses metastasized amid a tsunami of unemployment claims, according to the report.