By Kristine Lazar

LOS ANGELES (CBSLA) – An independent audit has found that poor planning and ineffective management led to massive failures within California’s unemployment system.

Millions of Californians could have to pay back a portion of their unemployment benefits due to failures within EDD, according to a state audit that was just released.

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The report found that EDD loosened eligibility requirements in order to get benefits to as many struggling Californians as quickly as possible, but that opened the system up to massive fraud.

And the federal government has not waived these requirements, meaning more than 2 million unemployed workers may have to pay a portion of their benefits back.

Republican Assemblyman Jim Patterson is one of 40 bipartisan state lawmakers who ordered the audit. He says EDD lied to lawmakers who repeatedly asked about how it was handling the pandemic.

“The fraudsters have already gotten away with it. They already ripped off taxpayers,” said Patterson. “Now the legitimate ones, who followed all the rules when the EDD lowered eligibility requirements, will be held to a higher standard and will be forced to repay.”

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The audit also found that less than 1 percent of calls to EDD were answered at the beginning of the pandemic. And even after the agency added thousands of staff to the call center, they were often unprepared to answer questions or resolve claims.


The state auditor writes that its office recommended a decade ago that EDD make improvements to the call center, but it has failed to do so.

State officials say that unemployment fraud could top 11 billion dollars. In a statement to us, Democratic Assemblyman David Chiu said: “This audit confirms that EDD has known it has been failing Californians for over a decade, but hasn’t taken anywhere near the necessary steps to fix its situation. Almost a year into the pandemic, EDD still has an incredible amount of work to do to ensure it’s fulfilling its basic responsibilities.”

The audit issued several recommendations including developing a recession plan so this doesn’t happen again.

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In a statement to us, EDD said it recognizes the work that lies ahead and is committed to implementing all of the auditor’s recommendations.

Kristine Lazar