Waste, Fraud, & Mismanagement

Allegations of EDD Fraud Prompt Emergency Audit

EDD Logo

California lawmakers have approved an emergency audit of the Employment Development Department after people in several parts of the state reported receiving tens to hundreds of letters – and unrequested debit cards – from the EDD.

In a letter sent to the Joint Legislative Audit Committee, Chair Rudy Salas Jr., a Democratic Assembly member from Bakersfield, said the audit will look at “EDD’s efforts to deliver unemployment insurance benefits to Californians, including a review of backlogs and efforts to improve call center operations and efficiencies.”

Lawmakers have received reports in recent weeks about constituents receiving letters from the EDD addressed to multiple people who have never lived at the address. The mailings contain EDD debit cards preloaded with cash and instructions on how to access the cash, and also contain personal information including Social Security numbers. Lawmakers are concerned that the letters indicate the EDD has been targeted by people attempting to defraud the unemployment insurance system.

The audit comes shortly after Governor Gavin Newsom appointed new EDD executives and announced a “strike team” to look into problems at the EDD, and two months after lawmakers held an oversight hearing on the department.

Constituents reported to lawmakers and media outlets that they have called the EDD thousands of times to seek unemployment benefits, but have either received no answer or were hung up on when the EDD employee could not help.

To ease call times, the governor announced extending call center hours (from 8 a.m. to noon, to 8 a.m. to 8 p.m.), but it later was revealed that the extended hours did not change the original four-hour timeframe for people to get claims processed. Instead, the additional eight hours were staffed by employees who could answer general questions only.