Audit faults California unemployment agency for ‘appalling’ missed opportunity to recover $516 million in overpayments
By Jim Miller, The Sacramento Bee | |
McClatchy-Tribune Information Services |
Thursday's report by the
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EDD officials told auditors that the department lacked staffing to make the computer programming changes necessary to participate in the federal program at the same time that it had eight other computer projects costing
"EDD did not even attempt to hire any contractors to perform the work, so Official B's conclusion that EDD could not hire anyone with the appropriate skills to perform the work was pure speculation at best," read the audit, referring to an unnamed "high-ranking EDD official," whom it described as retired, as "Official B."
The Treasury Offset Program allows states to garnish federal tax refunds and other payments to recover various debts. In 2010, it invited states to participate in an effort to collect on unemployment overpayments, most of which stem from people lying about when they returned to work.
Some EDD staff attended briefings on the Treasury program and recommended the department's participation, but superiors dragged their feet, the audit found. Thirty-one other states have signed up.
In their response to the audit, EDD officials said they were hindered by the lack of federal regulations until 2011. Other states still managed to prepare for the program's launch, auditors noted. Department officials also wanted the audit to reflect that the department had participated in the federal program since 2004 to recover outstanding state personal income taxes and disability insurance contributions.
"The EDD values this program and had every intention of using it to collect UI benefit overpayments, but was delayed for other reasons,"
That makes the latest case particularly egregious, the auditor responded.
"Considering EDD's extensive familiarity with the effectiveness of the Offset Program as a collection mechanism over the past decade, we find its delay in using the program to collect unemployment benefit overpayments to be even more appalling," the audit said.
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