California Lawmakers Blast Unemployment Agency Over Payment Delays

She said she didn’t know when that one consolidated call center would go online, but speculated that wouldn’t be until after mid-October. 

“These timelines seem out of step with the urgency of the moment we are in,” Petrie-Norris said, noting that the agency is just now appointing a single point of contact for each legislative office, something lawmakers requested in April. “This just exemplifies how slowly things are moving.”

The department has also been slow to handle its case backlog. Hilliard proudly announced that it has 239,000 cases awaiting resolution, a figure Assembly member David Chiu, D-San Francisco, disputed. He said there are at least 889,000 whose claims have not been addressed because the EDD “needs more information.” 

“Your online portal doesn’t tell the constituents what information the EDD needs,” he said. “EDD doesn’t send communication to the constituents that specify what information EDD needs. Our constituents cannot reach people through your call centers to tell you what you need. So how on Earth are these 889,000 Californians supposed to figure out how to resolve their claims?”

Hilliard said the agency has been sending email prompts to those who may be eligible for benefits but still need to answer some basic questions. 

“If people don’t go in and certify there is nothing we can do,” she said.

Chiu further accused the department of hiding the true extent of its backlog through conflicting statements to lawmakers and the press.

“Director Hilliard, why did you lie to us? Why have you been hiding this information from the public?" he asked.

"I would never lie to the public or the legislative body,” Hilliard said. “It has been a struggle for us to pull data, the way people want to hear the data is not the way our system was designed. It’s an old antiquated system.”

The computer system the EDD uses to manage its unemployment insurance program runs on the 30 year-old programming language COBOL. 

“I view this failure as predominantly an IT failure,” Assembly member Jay Obernolte, R- Big Bear Lake, said. "It’s horrifying to think about the fact that we have some of these systems still running in COBOL. In my day I was actually a pretty good programmer and I know COBOL, so if public service doesn’t work out for me, you should look me up.” 

Obernolte said the department should have a streamlined system to resolve problems without huge call centers. 

Hilliard agreed, saying the department will award a contract at the end of October “for a complete end-to-end replacement of our system.”

The EDD’s relationship with Deloitte, the vendor that built its online unemployment insurance system was also a sore point with Chiu. He noted that the EDD spent $259 million on no-bid contracts with the vendor over the last 10 years.

It was a debacle reminiscent of another massive tech project Deloitte spearheaded with the California judiciary during the height of the Great Recession, one that ended in the Legislature pulling funding after cost projections soared into the billion dollar range.

He said the EDD hired Deloitte to work on a project expected to take four years to complete and cost $47 million. The timeline stretched to six years and the cost ballooned to $94 million 

“That project massively failed, created massive delays in paid unemployment claims” he said, citing an Assembly insurance committee report from 2013. 

“I understand Deloitte continues to be a vendor of yours. Our office has met with Deloitte a few times. They claim no responsibility over anything that has taken place with your web-based systems. They say they’re not at fault for what’s happening, they don't have authority to fix things. Given how much you pay them I want to ask you what you think they actually do.”

Hilliard said Deloitte staff assists with maintaining the system, running the data and adding new features. Chiu said her answers contradicted the vendor’s. 

“They have abdicated responsibility and have given us answers that are the exact opposite,” he said. “And you keep signing new contracts with Deloitte. Why do we keep entering into no-bid contracts with someone with a history of cost overruns and problematic IT work?”

Chiu said the enormous amount spent with Deloitte represents another failure. “This vendor has also failed California. That’s a lot of UI [unemployment insurance] checks and because of the collective failure of EDD and Deloitte, millions of Californians haven’t gotten theirs.”

Thursday’s hearing follows Governor Gavin Newsom’s announcement touting the creation of a “strike team” to help the agency process unpaid claims and modernize its technology. 

Assemblymember Jim Cooper, D-Elk Grove, who chairs the budget subcommittee on state administration, noted the peculiar timing of the announcement, released just before the hearing was set to take place. 

 “I was pleased to see the government's announcement yesterday that he deployed a strike team to address the problems at the EDD,” he said. “The curious timing of the strike team announcement is not lost on the Legislature.”

Nazarian went even further, suggesting that the governor and the unemployment department were playing at political gamesmanship. He pointed to a link at the bottom of Newsom’s announcement that leads to a set of explanatory letters from the department that outlines corrective measures.

"It almost strikes me as a cloak-and-dagger game that we would play in elementary school in trying to say ‘I did this but it’s too bad that you didn't see it,’” Nazarian said. “It’s so unfortunate because there are people’s lives at stake.”

Follow @MariaDinzeo

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit