Employment Development Department Mismanagement Costs $53 Million. Mismanagement by technology staff at the Employment Development Department (EDD) has resulted in cost overruns of approximately $53 million. The funds were part of the federal stimulus money appropriated to California last year.
A report produced for the Assembly Insurance Committee said the $53 million is in addition to a five-year delay and previous cost increases of more than $80 million on computer modernization projects at EDD.
Assemblyman Charles Calderon told senior officials at EDD during a hearing: "You've all been here long enough to be held accountable. Quite frankly, if you were in the private sector, you would be fired."
Several other legislators also weighed in on the issue. Assemblyman Jose Solorio said that due to the "decade of mishaps" relating to the department's modernization efforts, the Legislature has lost confidence in the department's leadership.
EDD officials defended the department, and said the "cost overruns" are merely a discrepancy between the initial estimates by the department and the final project contract costs.
EDD currently uses an outdated computer system that has been blamed for numerous delays in disability and unemployment payments to low-income and out-of-work Californians. With increased state unemployment, the already-lagging computer system has had to meet a larger service demand.
"I'm shocked at how bad this situation has become," Mr. Calderon said. He continued: "If there's anything that government should be doing in these economic times, it's to be getting unemployment money to families that need it. If we can't do that, what else are we going to do? We can't govern." (Source: The Sacramento Bee, February 9.)
(Cal-Tax recommendation: The Legislature should set up a follow-up hearing to see what progress can be made by the department, and state bureaucrats should be held accountable. If the department is unable to perform its basic functions, the state should consider reducing the size of the technology staff and instead contracting out the duties.)
Cal-TaxReports, February 16, 2010
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