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Audit: California jobless agency's inaction led to fraud

Rich Pedroncelli/AP

FILE — In his Dec. 18, 2020 file photo a runner passes the office of the California Employment Development Department in Sacramento, Calif. California reported a significant surge in unemployment claims last week for independent contractors, accounting for more than a quarter of all such climbs nationally and raising concerns about a return of widespread fraud, Thursday, Jan. 21, 2021. (AP Photo/Rich Pedroncelli, File)

Employment Development Department - EDD (FILE)

By: Associated Press

Posted at 1:55 PM, Jan 28, 2021

and last updated 2021-01-28 16:55:24-05

SACRAMENTO, Calif. (AP) — A new audit blames California's unemployment agency for “significant missteps and inaction” that led to at least $10.4 billion in payments for fraudulent jobless claims during the pandemic.

The report released Thursday by California State Auditor Elaine Howle said the true amount of fraudulent payments is likely far higher. The agency itself this week said it's investigating another $20 billion in payments for possible fraud.

Howle said last spring the federal government warned the Employment Development Department it was at risk for increased fraud. But the agency waited four months to make any substantive changes.

The agency said the Trump administration did not provide it enough support, while Howle said state officials missed fraud because of their lax approach.

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