Decades Late, Billions Short: EDD Getting New Computers

Took long enough.

During the pandemic, California’s unemployment agency – the EDD – was looted to the tune of at least $50 billion dollars.

Last month, more than two years after the end of the worst of it – the EDD finally sent out a “request for proposals (RFP)” to get a new computer.

Actually, it’s called an “integrated claims management system (ICMS)” and it will take a few years to finish and cost hundreds of millions of dollars.  But it is progress.

In the state’s 2024-2025 budget, the EDD was allotted about $326 million dollars to improve its systems.  Of that, about $142 million was budgeted for the ICMS and another $125 million for other various upgrades mostly involving website improvements and training and customer service – or at least trying to actually have customer service.

This additional funding comes on top of the other about $250 million the EDD has received from the general fund over the past three years to, well, fix computers, improve processes, train folks, and fund the “EDDNext” program.

In theory,  EDDNext  is supposed to entail a complete revamping of how the agency operates. To this point, the most obvious change made has been the addition of a number of non-English languages to make applying for benefits easier.

Good news for Kim Jong Un: one of the new languages is Korean, so plundering the EDD website in the future to pay for his nuclear weapons program will become, presumably, a bit simpler.

The EDD is proud of its attempt to modernize its systems, it seems, but still can’t quite get things right. From the agency in response to a request for comment on the updates:

“EDD is in the midst of a major modernization effort to completely transform the EDD customer and employee experience. We’re updating applications, contact centers, the claims process, policies, procedure, and forms to make the experiences with EDD programs and services easier and faster. It involves far more than the overhaul our technology in the Integrated Claims Management System to unify our various benefit programs. We’ve been laying down the essential foundation for improvements and have been accomplishing initial successes over the past several years – some of which you can read about in news releases like this one we issued last year during National Customer Service Week.”

Did you happen to click on the link sent out during “National Customer Service Week?” It doesn’t exist. 

Oops.

According to the RFP, the new system will not just address unemployment issues but the agency’s other programs like disability insurance and family leave.

The EDDNext plan calls for the ability to deposit benefits directly into a person’s bank account, maybe this year. And yes every private business in the world can already do that, but don’t be mean.

Next year, contact center upgrades are expected, as is something called “frictionless ID proofing.”

An odd choice of words, because it was exactly a lack of “friction” – i.e., any real questions or asking for any real proof of identity – in the EDD’s systems that allowed it to be defrauded to the tune of about $1,250 per Californian, 80% of which went overseas.

To put some of the numbers into perspective, the state just (last couple of weeks) paid almost all of the interest it owes – for this fiscal year – the federal government on its unemployment program debt of more than $20.1 billion dollars. The payment was $462 million dollars.

There will be a bit more to pay before the end of the fed’s fiscal year October 1, but it will be under the $484 million that had been budgeted,  

The interest must be paid each year – that is non-negotiable, though it would be rather embarrassing for Gov. Gavin Newsom to be taken aside by fed thugs and have his thumbs broken if California didn’t pay “the vig”  on the loan. Of course, the state can continue to float the principle on the backs of California employers by letting the federal part of their unemployment tax balloon to, in a couple of years from $21 per employee per year to $420 per employee per year.

By the way, the computer/claims system has not been fully updated in 45 years and – no matter the party in charge – was never bothered with prior to today.  That system, plus the increasing of benefits without changing the funding system over the same period of time, means that the state has been underwater to the feds many times before and has paid nearly $2.5 billion in unemployment fund interest alone to the feds since 1990.

What’s a few billion between friends?

Note – here’s the RFP in its entirety.  If you are not terribly fond of them and you want your kids to fall asleep immediately, read it to them as their bedtime story.