Report 2020-628.2 Recommendation Responses
Report 2020-628.2: Employment Development Department: Significant Weaknesses in EDD's Approach to Fraud Prevention Have Led to Billions of Dollars in Improper Benefit Payments (Release Date: January 2021)
Recommendation for Legislative Action
To ensure that EDD effectively protects the integrity of the UI program, the Legislature should amend state law to require EDD to do the following:
- By January 2022 and biannually thereafter, assess the effectiveness of its fraud prevention and detection tools and determine the degree to which those tools overlap or duplicate one another without providing any additional benefit. EDD should then eliminate any fraud prevention and detection approach for which it lacks clear evidence of effectiveness. It should include this assessment in its annual report to the Legislature on fraud detection and deterrence efforts.
- By July 2021, provide the Legislature with an update on its progress in performing this analysis.
Description of Legislative Action
AB 138 (Chapter 78, Statutes of 2021), in part, requires EDD to provide to the Senate Labor, Public Employment and Retirement Committee, the Assembly Insurance Committee, the Senate Budget and Fiscal Review Committee, the Assembly Budget Committee, and the Joint Legislative Audit Committee a plan for assessing the effectiveness of its fraud prevention and detection tools by May 1, 2022, and provide a report with an update on its progress on performing the assessment that the plan identified by July 1, 2022. On or before January 1, 2023, and annually thereafter, EDD is required to analyze and assess the effectiveness of its fraud prevention and detection tools and submit this analysis and assessment to the specified legislative committees.
- Legislative Action Current As-of: October 2021
California State Auditor's Assessment of Status: Legislation Enacted
Description of Legislative Action
SB 232 (Nielsen, 2021), in part, would require EDD to provide the Legislature with a plan for assessing the effectiveness of its fraud prevention and detection tools by May 1, 2022, and to provide a report to the Legislature with an update on its progress on performing this analysis by July 1, 2022. The bill would require EDD to designate a unit that is responsible for coordinating all unemployment insurance fraud prevention and detection efforts. This bill is pending in the Assembly.
- Legislative Action Current As-of: October 2021
California State Auditor's Assessment of Status: Legislation Introduced
Description of Legislative Action
AB 56 (Salas, 2021) would, in part, require EDD to designate a fraud prevention and detection unit by March 1, 2022. This bill would also require EDD to include in its annual legislative report on deterrence and detection activities an assessment of the effectiveness of its fraud prevention and detection tools.
SB 232 (Nielsen, 2021) would, in part, require EDD to provide the Legislature with a plan for assessing the effectiveness of its fraud prevention and detection tools by May 1, 2022, and to provide a report to the Legislature with an update on its progress on performing this analysis by July 1, 2022. The bill would require EDD to designate a unit that is responsible for coordinating all unemployment insurance fraud prevention and detection efforts.
- Legislative Action Current As-of: July 2021
California State Auditor's Assessment of Status: Legislation Introduced
Description of Legislative Action
AB 56 (Salas) would, in part, require EDD to designate a fraud prevention and detection unit by March 1, 2022. This bill would also require EDD to include in its annual legislative report on deterrence and detection activities an assessment of the effectiveness of its fraud prevention and detection tools.
SB 232 (Nielsen) would require EDD to provide the Legislature with a plan for assessing the effectiveness of its fraud prevention and detection tools by May 1, 2022, and to provide a report to the Legislature with an update on its progress on performing this analysis by July 1, 2022. The bill would require EDD to designate a unit that is responsible for coordinating all unemployment insurance fraud prevention and detection efforts.
- Legislative Action Current As-of: May 2021
California State Auditor's Assessment of Status: Legislation Introduced
Description of Legislative Action
As of March 29, 2021, the Legislature has not taken action to address this specific recommendation.
- Legislative Action Current As-of: March 2021