Senators Cannella and Vidak Call For Investigation of EDD

Wednesday, October 16, 2013

Senator Anthony Cannella (R-Ceres) today joined with Senator Andy Vidak (R-Hanford) in calling for a hearing to investigate the practices of California Employment Development Department and their actions following a stoppage in the issuance of unemployment insurance checks in September and delaying benefits to nearly 150,000 Californians.

On October 1, Senators Cannella and Vidak visited EDD headquarters to meet with senior staff and discuss the stoppage and the closing of EDD offices in Turlock and Los Banos. Cannella and Vidak remain concerned about the reduction in service for their constituents that use EDD offices facing closure.

Cannella and Vidak sent the following letter to Senator Bill Monning (D-Carmel) and Senator Loni Hancock (D-Berkeley):

October 15, 2013

The Honorable Bill Monning, Chair
Senate Labor and Industrial Relations Committee
State Capitol, Room 4017
Sacramento, CA 95814

The Honorable Loni Hancock, Chair
Senate Budget and Fiscal Review Subcommittee #5
State Capitol, Room 2082
Sacramento, CA 95814

Dear Senators Monning and Hancock,

We are writing to respectfully request that the Senate Labor and Industrial Relations Committee and the Senate Budget and Fiscal Review Subcommittee #5 convene a joint oversight and informational hearing to investigate problems that have arisen with the Employment Development Department’s (EDD) implementation of the Continued Claims Redesign (CCR) Project.  This project was supposed to automate and speed up the processing of unemployment insurance claims.

As you are aware, EDD launched this program on Labor Day.  Since then, there have been numerous complaints and several news reports about inappropriate delays by EDD in issuing thousands of unemployment insurance checks.  These delays are reported to be the result of a computer system malfunction that made it difficult for EDD to move unemployment claimant data from the 30 year-old claims processing system to the new CCR system.

Due the particularly high level of unemployment in our districts, this malfunction has had a significant impact on our constituents.  In fact, currently, it is one of the number one reasons for constituent calls to our district offices.  It is very unfortunate that, in addition to facing the hardship of unemployment and a job search, our constituents are now confronted with the challenge of having to navigate a system that unexpectedly cut them off from their UI checks.  Instead of looking for work, they now must focus on collecting their legitimate UI claims, all the while facing the consequences of late payments for services that are necessary for day to day living (e.g. mortgage, rent, utilities, etc.).   This added burden on our job-seeking constituents is absolutely unacceptable.

Three weeks ago, out of concern for these constituents, we met  with Sharon Hilliard, the Chief Deputy Director of EDD, to find out the reason for the delays, what was being done about the delays, and how such delays might be avoided in the future.  At that meeting, we were told that some problems with the transfer of data was expected, but not at such a large scale.  We were also assured that the backlog had been cleared and that the problem was a one-time occurrence.  We informed Ms. Hilliard that we would continue to closely monitor the situation and would work with EDD, to the extent practical, to ensure that such delays would not occur in the future.

Since that meeting, the Sacramento Bee reported that EDD officials “knew that the system was vulnerable before they initiated the upgrade.”  The Bee also reported that EDD badly miscalculated the number of claimants that would be affected by the data conversion problems and that the governor’s office knew about the problem days before ordering the EDD to pay the backlogged claims.  Given the severity of the problem, and its impact on our constituents, we feel that an informational and oversight hearing is warranted.  We would like the hearing to look into what happened to cause the significantly large number of delays, why such a large number of delays came as a surprise, why the Administration withheld information from the public and the Legislature on the problem for almost three weeks and what can be done to prevent such a problem from reoccurring in the future.

In closing, we would like to state that our goal is simply to better understand what happened and why it happened, to help policy makers be proactive in preventing such problems from occurring in the future.

We look forward to your response.

Sincerely,

Anthony Cannella           Andy Vidak