Full Breakdown
California's Employment Development Department Faces Scrutiny Over Wasted Funds
12/13/2025, 6:07:05 AM
Audit Reveals Significant Waste in Mobile Device Spending
An investigation by the California State Auditor has uncovered that the California Employment Development Department (EDD) wasted over $4.6 million on unused mobile devices intended for its unemployment insurance branch. The audit, released on December 12, 2025, highlighted that the EDD acquired 7,224 mobile devices—including cell phones, smartphones, and wireless hotspots—during the COVID-19 pandemic to facilitate remote work for staff managing a surge in unemployment claims. However, as of April 2025, years after the state lifted its stay-at-home order, the agency continued to incur monthly service fees for these devices, many of which were found stored unused in closets.
The audit revealed that out of the 7,224 devices, 6,285 had not been used for at least four months, with over 5,000 remaining inactive for more than a year. Alarmingly, 478 devices had not been used for over four years. Investigators noted that the reported figures likely underestimate the total waste, as the audit examined only one of several accounts maintained by the EDD with Verizon and T-Mobile.
Background on EDD's Challenges
The EDD has faced ongoing challenges related to fraud and mismanagement. In 2021, the agency acknowledged that it had paid out approximately $31 billion in fraudulent unemployment claims, including claims filed on behalf of prison inmates using fictitious names. This incident has been described as potentially the largest taxpayer scam in California's history. As of June 2022, the EDD had recovered $1 billion of the funds lost to fraud, according to a statement from Governor Gavin Newsom's office.
Official Responses and Actions Taken
In response to the audit findings, a spokesperson for the EDD stated, “Upon leadership being alerted to the issue, we took action immediately. We adopted all auditor recommendations, applied phone shutdown efforts right away, and formalized a policy for automatic phone disconnection controls moving forward.” This statement reflects the agency's commitment to addressing the identified issues and preventing future waste.
Criticism and Opposition
Critics have raised concerns about the EDD's management practices, emphasizing that the waste of taxpayer funds on unused devices is indicative of broader systemic issues within the agency. The repeated failures in managing unemployment claims and resources have led to calls for increased oversight and reform to ensure accountability and efficiency in the future.
Conflicting Reports & Gaps
While the audit provides a detailed account of the financial waste, it does not address the full scope of the EDD's operational inefficiencies or the potential for further waste in other areas. The lack of comprehensive data on all accounts managed by the EDD raises questions about the overall management of state resources.
Verbatim Quotes
“Upon leadership being alerted to the issue, we took action immediately. We adopted all auditor recommendations, applied phone shutdown efforts right away and formalized a policy for automatic phone disconnection controls moving forward,” — EDD Spokesperson
The findings from the California State Auditor serve as a critical reminder of the need for effective management and oversight within state agencies, particularly in times of crisis.
