SACRAMENTO, Calif. (KRON) - Following a months-long investigation, the state auditor found many ways in which the California Employment Development Department made itself an easy target for fraudsters.
This as the agency has admitted to paying out billions in fraudulent unemployment benefits.
The list of issues inside California’s Employment Development Department continues to grow, following a state audit of the agency's fraud prevention policies.
The auditor concluded Thursday the underprepared and inefficient EDD put a target on its back by removing key fraud prevention safeguards along with not taking enough action against suspicious claims.
The state auditor says the EDD waited several months into the pandemic before bolstering its fraud detection efforts resulting in payments totaling at least $10.4 billion to claimants whose identities can't be verified.
Lawmakers say it confirmed their worst suspicions.
"I think demonstrates that EDD was in fact a rat’s nest of incompetence," Assm. Jim Patterson, R-Fresno, said.
"It's not been a smooth process, the department has not been up to snuff,” Assm. Phil Ting, D-San Francisco, said.
In a response to the audit, EDD officials pointed to the unprecedented number of claims filed amid the pandemic, as well as issues with the federal pandemic unemployment assistance program opening up its vulnerability to fraud.
Department leaders have agreed to implement all of the auditor's recommendations, including implementing a fraud detection and prevention unit, which the agency does not currently have.
"They made it easier for the fraudsters and harder for the people of California that needed their help,” Patterson said.
State lawmakers promise to provide more supervision over the EDD as it now has a massive, months-long to-do list to improve.
"We're going to do oversight so they can do a better job delivering the money to millions of Californians who need it to pay for rent, pay for food, pay their bills," Ting said.
If you're having issues with the EDD, lawmakers say feel free to contact their offices that have been working as middlemen between constituents and the embattled department.
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