EDD Should Do More to Eliminate Avoidable Appeals, Auditor Says

The Employment Development Department (EDD) needs to improve its efforts to minimize avoidable appeals of its eligibility determinations for unemployment insurance benefits, and should show up at appeals hearings to defend its decisions, the state auditor said in a new audit report.

The auditor found:

  • The California Unemployment Insurance Appeals Board frequently decides in favor of claimants who initiate first-level appeals of EDD’s benefit determinations for the unemployment insurance program.

  • The appeals board frequently overturns EDD determinations that claimants made false statements, as EDD does not adequately establish that the statements were made willfully.

  • EDD does not always successfully contact claimants and employers before making its benefits eligibility determinations.

  • EDD and the appeals board do not systematically identify trends in the reasons that EDD’s benefit determinations are overturned on appeal.

“Additionally, attendance at the appeal hearing by the claimant, employer, or EDD can significantly affect the outcome of the appeal,” the auditor noted. “We found that EDD rarely attends hearings. By not attending the hearings, EDD does not provide any active counter-argument to appellants’ testimonies, which may make the appeals process more favorable toward appellants than it otherwise would be.”

The auditor recommended that the agency identify the types of appeals that could be most influenced by EDD’s attendance at the appeal hearing, and analyze the feasibility and cost-effectiveness of participating in those hearings by telephone.

The auditor said a 2012 internal review cited many of the same problems. “Although the review contained several recommendations for improving EDD’s processes, EDD has not implemented any of them,” the auditor wrote. (Source: California State Auditor Report 2014-101, August 2014.)

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