Report 2020-628.2 Recommendation 5 Responses

Report 2020-628.2: Employment Development Department: Significant Weaknesses in EDD's Approach to Fraud Prevention Have Led to Billions of Dollars in Improper Benefit Payments (Release Date: January 2021)

Recommendation #5 To: Employment Development Department

To ensure that it provides legitimate claimants with benefits but does not pay benefits related to fraudulent claims, EDD should immediately obtain from Bank of America a comprehensive list of claimants' accounts that are frozen. EDD should immediately thereafter evaluate the list—including considering using ID.me to verify claimants' identities—to identify accounts that should be unfrozen. By March 2021, it should direct Bank of America to take action to freeze or unfreeze accounts as appropriate.

The EDD has obtained and reviewed comprehensive lists of claimants' debit card accounts that have been frozen. The EDD has evaluated the lists of Bank of America frozen accounts against EDD claim information, and has identified and required claimants to verify their identities or provide additional verification information to resolve other eligibility issues, if necessary. The EDD has provided Bank of America with a list of all verified claimants through March 2021 in order for Bank of America to take action as appropriate.

California State Auditor's Assessment of Status: Fully Implemented

EDD obtained from Bank of America a list of frozen accounts as of 3/31/2021 and provided us with procedures for how it evaluated that list. Based on its evaluation, EDD provided Bank of America with a list of claimant accounts to unfreeze. As claimants continue to provide EDD with information that satisfactorily resolves EDD's concerns about identity and eligibility, EDD must continue to request that Bank of America unfreeze accounts. It is critical to the full implementation of this recommendation that EDD continue to request Bank of America unfreeze accounts that EDD believes belong to legitimate claimants.

All Recommendations in 2020-628.2

Agency responses received are posted verbatim.