SACRAMENTO -- State lawmakers on Wednesday ordered a formal audit of the troubled Employment Development Department and how it may have botched the handling of thousands of unemployment insurance claims.
By a unanimous vote, a legislative committee directed the state auditor to find out the reasons that administrative judges are overturning more than half of EDD caseworkers' initial denials of claims.
In a separate vote, the Assembly-Senate Joint Legislative Audit Committee told State Auditor Elaine Howle to make the audit -- requested by Assembly Insurance Committee Chairman Henry T. Perea, D-Fresno -- a top priority.
"When over half of unemployment insurance claimants who appeal their EDD decision win their cases, there is clearly a breakdown in the system," he said after the vote.
EDD spokeswoman Patti Roberts said the agency "understands the reason for this audit and is supportive of finding ways to avoid any unnecessary appeals that may delay benefits to our customers."
Howle estimated that her audit would cost $222,360 plus travel and administrative expenses.
The high rate of denials is the latest of the agency's problems highlighted in a series of stories in The Los Angeles Times. Other problems have included a phone system so overloaded that up to 90 percent of all incoming calls go unanswered. The agency also is struggling to overcome the continuing effects of a massive computer glitch in September that delayed payments to as many as 150,000 people.
Perea's insurance committee in November held oversight hearings into the meltdown at EDD. He followed up with a Jan. 27 request to the Joint Legislative Audit Committee asking for a detailed probe into the "specific EDD policies and practices" that "generate claims decisions that are consistently overturned."
The audit follows an announcement last month that the administration of Gov. Jerry Brown is committed to a sweeping overhaul of the unemployment insurance system.
David Lanier, the governor's secretary of labor and workforce development, decried the agency's "unacceptable levels of payment delays and unanswered phone calls" and announced an initiative that he said is aimed at boosting services.