California’s Fraud-Riddled EDD Unemployment System Down Repeatedly In Past 24 Hours After Newsom Promised Fix Last Year

“This system is an old, 30-year-old system,” said Governor Gavin Newsom about California’s online unemployment system after it was revealed to be massively defective in a state report last September. Newsom at the time sought to frame the issues in terms of outdated technology, not incompetence. The computers and software that make it up “need to be strewn to the waste bin of history,” he said.

“The reset began this weekend,” the governor promised at the time. “The reset process is expected to end on October 5.”

Fast forward almost exactly six months and that same Employment Development Department
system is still riddled with failures, failing repeatedly this weekend just as thousands of cash-strapped Californians sought to certify for their weekly benefits.

A notice on the site Monday acknowledged that some users are experiencing issues.

The website failure renewed concerns about the EDD’s competency during the pandemic-caused unemployment crisis.

When asked for comment, the EDD Media Services team responded told local outlet ABC7: “We’re working to get system status details from our IT branch and will send an update as soon as we have more information.”

It’s not the first time claims have been delayed. In September, a strike team appointed by the governor himself issued a damning report that indicated a backlog of unresolved claims that growing by 10,000 a day.

According to the Los Angeles Times, the EDD reported in early March 2021 that its backlog of delayed, unapproved claims had doubled since the start of the year to more than 1 million as of March 3.

Add to that the EDD’s admission that at least $10 billion in fraudulent state unemployment funds were paid since March 2020, and the full proportions of the system’s failure — and the failure of Governor Gavin Newsom to address it — becomes clear.

From the EDD’s January 2021 statement:

Between March 2020 and January 16, 2021, EDD processed 19.5 million claims and paid out $114 billion in unemployment benefits. EDD confirmed that 9.7 percent of payments have been made to fraudulent claims. EDD also identified that up to an additional 17 percent of payments made during this time have been made to potentially fraudulent claims. These claims are under investigation. Estimates provided today are likely to shift as new claims come in and as older claims that have been flagged as suspicious are either validated or confirmed as fraudulent.

That means that up to $30 billion worth of those claims could be fraudulent. And, as of last December, state officials had identified at least $400 million in claims paid on some 21,000 unemployment benefit claims improperly filed in the names of California prison inmates.

As a result of all of this, money needed by Californians remains stuck in the state’s bureaucracy. Despite the governor’s promises six months ago, it seems the computer system is still a mess.

“The State must deliver this benefit to those who qualify within a time frame that’s relevant to the well-being of the claimant, and it was failing to do that for too many Californians,” the September report stated.

The report made 100 recommendations, including some immediate fixes and longer term projects. A streamlined identity verification process was expected to be ready by Oct. 5, speeding up the process for 90% of applications to be approved within a few weeks.

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