The Employment Development Department's deficiencies were cast into stark relief when the pandemic hit, throwing millions of people out of work and causing a deluge of claims that overwhelmed the agency.
"The pandemic clearly demonstrated that safety-net programs like EDD need long-overdue structural reforms," said Assemblywoman Wendy Carrillo, D-Los Angeles, chair of the Budget Subcommittee on State Administration, which was one of two conveners of a Sacramento hearing on EDD that was partially conducted virtually.
As the auditor's reports said — and thousands of frustrated Californians experienced — EDD's phone lines were clogged, its claims processing was slow, and it paid out some $20 billion to fraudsters.
"When one of our government agencies fails this badly ... it erodes people's faith in government," said Assemblywoman Cottie Petrie-Norris, D-Laguna Beach (Orange County), chair of the Assembly Accountability and Administrative Review Committee, the other co-convener.
Elaine Howle, the California state auditor, said EDD had made notable progress in addressing concerns uncovered during the audit, but it needs to continue to follow through. "Some is on pace; some is a little too slow," she said, noting that EDD has a legacy computer system that requires slow chipping away to change.
EDD Director Rita Saenz, who took over as head of the agency in January, said the agency's addressed more than two-thirds of the auditor's recommendations and is continuing to work on them.
In the fraud area, those include creating a unit to address fraud instead of having to have six different divisions coordinate. It will be fully staffed by the end of November, she said. It already has set up a way for victims of identity theft to contact it, and worked with Bank of America, which administers the debit cards used to pay benefits, on unfreezing as appropriate accounts that were frozen because of suspicion of fraud.
Language access for the millions of Californians who are not native English speakers is improving with expanded language lines and more translations of forms, she said, but it will take until late January for expanded language staff to be fully trained.
For claims processing, changes include a workload plan to prioritize deferred work; a public dashboard with statistics on its claims handling; and identifying which IT improvements can be implemented quickly.
At the call center, it has added a way for claimants to request a callback instead of waiting on hold, and tracked and analyzed reasons why claimants call for assistance.
Still, "the call center remains a challenge," Saenz said, saying it's not improving fast enough. Like call centers in private industry, it has a 30% annual staff turnover. New recruits need four months of training.
Another big issue: There is a 26-week wait for claimants who need a "determination interview" to assess their qualification for benefits. Most claimants can be processed quickly without those interviews — "85% are paid within one week of certifying for benefits, but that's no comfort to the people who are waiting," she said.
And still another remaining problem, as Assemblyman Rudy Salas, D- Bakersfield, pointed out: There are still almost 140,000 backlogged claims that have been pending for 21 days or more.
Saenz said the agency is working on its IT system in phases, but it will take a couple of years more to be fully modernized.
It will take a few months to develop a request for proposal for a vendor to offer direct-deposit benefits and then a couple of years for that to be in place, she said — a pace that the lawmakers found ironic in a state that's a technology leader.
Some EDD reforms came courtesy of lawmakers, who pushed through legislative fixes, including requiring it to develop a recession plan based on lessons learned (SB390), requiring it to check benefits claims against prison rolls to prevent fraud (AB110), and requiring it to regularly assess its fraud tools (AB138).
Many of the EDD's problems were identified by the auditor and the public more than a decade ago after the past recession, but were not fully addressed by the agency, Petrie-Norris said.
"How do we make sure they follow through and actually implement the changes to ensure this is the last time we deal with this fiasco?" she said.
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