Hiring sprees and unending IT problems: What California budgets say about unemployment agency
California budget documents show the state’s last three governors plugged resources into its unemployment agency during crises, but did not manage to launch systemic changes that would prepare for it the surge in jobless claims it received in the early months of the coronavirus outbreak.
Here are excerpts from Employment Development Department budget requests and independent reports on the unemployment program dating back to 2008.
October 2008: Citing “unprecedented workload increases” as the Great Recession sends the economy reeling, EDD seeks more personnel.
May 2009: EDD, again citing an “unprecedented workload increases due to the extraordinary downturn in the economy,” wants expanded call center hours and overtime.
October 2009: The recession officially ends in June. EDD projects need for fewer personnel and less money for benefits.
February 2010: An Assembly Insurance Committee investigation concludes .”EDD has been unable to adequately rise to the occasion and satisfactorily meet the needs of California’s growing number of unemployed.”
Among the problems: Cost overruns in modernizing technology and “massive amounts” of staff overtime.
“Claimants found that human contact was nearly impossible,” it said, and “EDD’s telephone system eventually collapsed.”
April 2010: Unemployment remains high. EDD seeks an increase in personnel.
March 2011: ”Recently, the department improved its performance when it increased the number of staff and allowed overtime. However, most of its long-term corrective actions have not improved its ability to issue timely first payments or promptly determine eligibility,” said a report from the California State Auditor.
March 2012: EDD gets a big budget boost to pay benefits, and tells the state it needs no change in its administrative budget.
May 2013: As claim levels wind down, and federal budget cuts take effect, EDD seeks no change in its administrative budget.
March 2014: ”EDD missed an opportunity to collect an estimated $516 million owed to the State in unemployment benefit overpayments made to claimants because it delayed participating in the Offset Program for over three years,” the California State Auditor reported.
May 2014: EDD tries to make its system more efficient, as it implements a plan to hire and train hundreds of new and retained employees.
March 2015: Former Gov. Jerry Brown’s budgets gave EDD more funding for personnel and modernization in 2015 and 2016 budget years. “Workload challenges culminated in the fall of 2013, when problems with a planned upgrade of EDD’s internal (unemployment insurance) processing system resulted in significant delays in benefit payments and extreme difficulty for claimants attempting to ascertain the status of claims,” reported the independent Legislative Analyst’s Office.
May 2017: The Brown administration provides more funding to upgrade the EDD system. But LAO finds the system is “complex and includes major components that are aging and costly to maintain.”
March 2020: .As the coronavirus pandemic sends unemployment claims to new highs, LAO warns “The information technology system used by EDD to administer (unemployment insurance) relies, in large part, on aging and inflexible components.” Gov. Gavin Newsom’s administration begins hiring thousands of workers to get benefits to jobless Californians.
August 2020: The California State Auditor says EDD’s management of federal economic relief funds is a “high risk” issue.
September 2020: Newsom’s unemployment strike team releases a 109-page report detailing challenges at the Employment Development Department. It urges the department to cease hiring new workers, implement fraud-prevention technology and pause a technology modernization effort until after the coronavirus crisis wanes.
This story was originally published September 30, 2020 at 5:00 AM with the headline "Hiring sprees and unending IT problems: What California budgets say about unemployment agency."