EDD Computers GO Down Again, Following Numerous Breakdowns and Fraud Claims

Assemblyman Jim Patterson said Monday in a press conference his office was notified by EDD employee insiders that the EDD computer systems are currently down and have been for some time. Patterson said they have contacted the EDD for details but as of Monday afternoon, haven’t heard anything official.

It was only in November that California State Auditor Elaine Howle warned legislative leaders that the Employment Development Department had sent at least 38 million pieces of mail containing claimants’ full Social Security numbers since the start of the COVID-19 pandemic, as the Globe reported.

Less than one week later, District Attorneys, and Federal Prosecutors, along with local, state and federal law enforcement announced rampant and large scale pandemic unemployment assistance fraud occurring in California’s communities, in the jails, and in state and federal prisons. It took the California District Attorney’s Statewide EDD Fraud Task Force to expose this in a letter to Gov. Gavin Newsom.

By early December, Bank of America, the bank selected by the EDD to be behind their unemployment benefit debit cards, announced that fraudulent cases could be as much as $2 billion.

Early January found more than 1.4 million unemployment claims in California were frozen since the New Year due to concerns over fraud.

A few weeks later, California Labor Secretary Julie Su announced upwards of $31 billion dollars in unemployment claims was sent to prison inmates in California’s county jails, and state and federal prisons, out of state, and even out of the country, while legitimate claimants have been stiffed for months, or received late payments.

This is a long-winded way of saying that the EDD, responsible for paying out unemployment benefits to Californians out of work, is failing miserably.

“People are desperate,” Assemblyman Patterson said Monday. “They cannot reach someone on the phone at EDD because the call center is worthless, as the State Auditor concluded.”

Patterson expressed overwhelming frustration and exasperation at the state agency not just for the chronic failures, but also because “instead of coming clean, the downplay it,” he said.

Patterson announced on the press call that he was demanding the EDD report all of the outages for the past three months. “They can’t continue to say ‘there’s nothing here to see,'” he said. “I’ve absolutely lost my patience,” especially with what Patterson said was with the “upper brass congratulating themselves over ‘we’re fixing it’ and ‘it’s getting better.'”

Yet, Patterson said the EDD “brass” continues to say, “There’s nothing to see here.”

“There are livelihoods at stake here,” Patterson said. “These people are desperate. I insist they come clean!”

Patterson said he intends to use his elected office as well as his committee influence to get to the bottom of what is really happening at the EDD. “We’re going to find out how often, and how long” these outages occur and last, Patterson said. “There should be no difficulty putting together people and their unemployment benefits.”

“Anyone want to bet that they do not respond to my request?” Patterson asked.

The State Auditor conducted an audit in January, and issued a scorching report on the EDD’s monumentally catastrophic failure to respond to the surge in unemployment claims following Gov. Gavin Newsom’s statewide lockdown of businesses over the coronavirus. Because of her audit, we now know about the $31 billion dollars in unemployment claims sent to prison inmates, to persons out of state, and out of the country, while legitimate claimants have been stiffed for months, or received late payments.

The auditor’s report says EDD knew of its shortcomings, and that for the last 10 years the agency wasn’t ready for a recession or  any kind of disaster, much less a statewide business lockdown.

As the Globe reported in February, the most recent EDD audit found:

Despite Multiple Warnings, EDD Did Not Prepare for an Economic Downturn

Key Points

• Before the claim surge, EDD did not adopt a comprehensive plan for how it would respond to economic downturns when its UI program is in higher demand. Having such a plan would have strengthened its poor response to the 2020 claim surge.
• EDD has for years been aware of many of the problems in its UI claims processing and customer assistance efforts that this report identifies. In fact, key problems related to its management of the UI program in 2020 were also present during the Great Recession of 2008 and 2009. Nonetheless, EDD did not take adequate steps to address these deficiencies.

The auditor recommended that the Legislature should require EDD to do the following:

• Report at least once every six months on its website the amount of benefit payments for which it has required repayment and the amount repaid.
• Develop a recession plan so that it is well prepared to provide services during economic downturns. The planning process should consider lessons learned from previous economic downturns, including the recent pandemic-related claim surge.

and

• To protect against fraudulent UI claims, the Legislature should amend state law to require EDD to regularly cross‑match its claims against data from state and local correctional facilities.
• To ensure that EDD effectively protects the integrity of the UI program, the Legislature should amend state law to require EDD to, by January 2022, and biannually thereafter, assess the effectiveness of its fraud prevention and detection tools, eliminate those that are not effective, and reduce duplication in its efforts.

Patterson said his office received confirmation from EDD employees that the system has also been down Monday morning.

The auditor recommended that the Legislature should require EDD to do the following:

• Report at least once every six months on its website the amount of benefit payments for which it has required repayment and the amount repaid.
• Develop a recession plan so that it is well prepared to provide services during economic downturns. The planning process should consider lessons learned from previous economic downturns, including the recent pandemic-related claim surge.

and

• To protect against fraudulent UI claims, the Legislature should amend state law to require EDD to regularly cross‑match its claims against data from state and local correctional facilities.
• To ensure that EDD effectively protects the integrity of the UI program, the Legislature should amend state law to require EDD to, by January 2022, and biannually thereafter, assess the effectiveness of its fraud prevention and detection tools, eliminate those that are not effective, and reduce duplication in its efforts.

The EDD responded to the auditors recommendations at the end of the audit, but evidently did not implement them.

Are any other lawmakers expressing concern about the down computers at EDD? Anything from Gov. Gavin Newsom?

“The last thing that should be happening is these failures,” Assemblyman Patterson said. “Silence and cover-up – we can’t have it!”