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 prevents fraud associated with incarcerated individuals, the Legislature should amend state law to do the following:
- Require EDD to regularly cross-match UI benefit claims against information about individuals incarcerated in state prisons and county jails to ensure that it does not issue payments to people who are ineligible for benefits. The Legislature should specify that EDD perform the cross-matches as quickly as possible after individuals file claims and with as little disruption of legal and eligible claims as possible.
- Require CDCR and any other necessary state or local government entities to securely share information about incarcerated individuals with EDD to enable EDD to prevent fraud.
- Require EDD to include, in its annual report to the Legislature about fraud, an assessment of the effectiveness of its system of cross-matching claims against information about incarcerated individuals. The assessment should include how regularly EDD performs the cross-matches, how successful the cross-matches are in detecting and preventing fraud, and whether the cross-matches negatively affect eligible claimants attempting to legally obtain benefits.
Description of Legislative Action
AB 110 (Chapter 511, Statutes of 2021) requires CDCR to provide the name, known aliases, birth date, SSN, and booking date and expected release date, if known, of a current inmate to EDD for the purposes of preventing payments on fraudulent claims for unemployment compensation benefits. This information must be provided to EDD on the first of every month and upon the EDD's request. For purposes of preventing payments on fraudulent claims for unemployment compensation benefits, the EDD Director is required to verify with the information provided by CDCR that the claimant is not an inmate currently incarcerated in the state prisons. EDD is required to complete necessary system programming or automation upgrades to allow electronic monitoring of CDCR inmate data to prevent payment on fraudulent claims for unemployment compensation benefits at the earliest possible date, but not later than September 1, 2023.
AB 56 (Chapter 510, Statutes of 2021), in part, requires EDD to assess the effectiveness of its system of cross matching claims against information about incarcerated individuals. The assessment shall include how regularly EDD performs the cross matches, how successful the cross matches are in detecting and preventing fraud, and whether the cross matches negatively affect eligible claimants attempting to legally obtain benefits. EDD is required to include this assessment in its annual report on fraud deterrence and detection activities. Details on fraud methods and tools may be generalized, excluded, or redacted to protect the department's fraud deterrence practices.
- Legislative Action Current As-of: October 2021
California State Auditor's Assessment of Status: Legislation Enacted
Description of Legislative Action
AB 23 (Chen, 2021) would, beginning July 1, 2021, require EDD to cross-check all claimant information with state and county correctional facility inmate data in an effort to detect fraudulent applications.
AB 110 (Petrie-Norris, 2021) would require CDCR to provide specified information on current inmates to EDD for the purposes of preventing payments on fraudulent claims for unemployment compensation benefits on the first of every month and upon the EDD's request.
SB 39 (Grove, 2021) would require CDCR to provide the names and SSNs of current inmates to EDD, upon request of EDD, for the purposes of preventing payments on fraudulent UI claims. The EDD Director would be required to verify for any UI benefits paid on and after July 1, 2021, that the claimant currently incarcerated in the state prisons before making any benefit payment. This bill would require EDD to notify CDCR and DOJ of the attempt to make a fraudulent claim for UI benefits if EDD determines a claimant is currently incarcerated.
- Legislative Action Current As-of: July 2021
California State Auditor's Assessment of Status: Legislation Proposed But Not Enacted
Description of Legislative Action
AB 23 (Chen) would, beginning July 1, 2021, require EDD, to cross-check all UI claimant information with state and county correctional facility inmate data in an effort to detect fraudulent applications.
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 system of cross matching claims against information about incarcerated individuals and the effectiveness of its fraud prevention and detection tools.
AB 110 (Petrie-Norris) would require CDCR to provide the names and SSNs of current inmates to EDD on the first of every month or upon EDD's request for the purposes of preventing payments on fraudulent claims for UI benefits. Finally, this bill would require the EDD Director to verify with the information provided by CDCR that the claimant is not an inmate currently incarcerated in the state prisons or an inmate currently serving a sentence in a county jail before making any payment of UI benefits.
SB 39 (Grove) would require CDCR to provide the names and SSNs of current inmates to EDD for the purposes of preventing payments on fraudulent claims for UI benefits. This bill would require, for any unemployment compensation benefits paid on and after July 1, 2021, the EDD Director to verify with the information provided by CDCR that the claimant is not an inmate currently incarcerated in the state prisons before making any payment of unemployment compensation benefits.
- Legislative Action Current As-of: May 2021
California State Auditor's Assessment of Status: Legislation Introduced
Description of Legislative Action
AB 23 (Chen) would, beginning July 1, 2021, require EDD, as part of its process for determining eligibility for unemployment insurance benefits, cross-check all claimant information with state and county correctional facility inmate data in an effort to detect fraudulent applications.
AB 110 (Petrie-Norris) would require CDCR to provide the names and SSNs of current inmates to EDD for the purposes of preventing payments on fraudulent claims for unemployment compensation benefits. The bill would also require a county to provide the names and SSNs of inmates currently serving a sentence in the county's jail to EDD for those same purposes. The bill would require the names and SSNs to be provided to EDD on the first of every month and upon the EDD's request. Finally, this bill would require, for purposes of preventing payments on fraudulent claims for unemployment compensation benefits, the EDD Director to verify with the information provided by CDCR and counties before making any payment of unemployment compensation benefits that the claimant is not an inmate currently incarcerated in the state prisons or an inmate currently serving a sentence in a county jail.
SB 39 (Grove) would require CDCR to provide the names and SSNs of current inmates to EDD for the purposes of preventing payments on fraudulent claims for unemployment compensation benefits. This bill would require, for any unemployment compensation benefits paid on and after July 1, 2021, the EDD Director to verify with the information provided by CDCR that the claimant is not an inmate currently incarcerated in the state prisons before making any payment of unemployment compensation benefits.
- Legislative Action Current As-of: March 2021