Report 2020-128/628.1 Recommendation 8 Responses

Report 2020-128/628.1: Employment Development Department: EDD's Poor Planning and Ineffective Management Left It Unprepared to Assist Californians Unemployed by COVID‑19 Shutdowns (Release Date: January 2021)

Recommendation #8 To: Employment Development Department

To continue providing timely payment of benefits to Californians in need while also effectively responding to the Department of Labor's directive regarding immediately resuming all eligibility determinations and resolving all suspended determinations, EDD should do the following:

-Perform a risk assessment of its deferred workloads, including deferred eligibility determinations and retroactive certifications. EDD's assessment should take into account the relative likelihood that it issued payments to ineligible claimants by considering historic overpayment trends as well as the new or altered eligibility requirements the federal government adopted in response to the pandemic. If necessary, EDD should either partner with another state agency or contract for assistance in performing the analysis in support of this assessment.

The EDD entered into a contract with Accenture to perform the risk assessment of its deferred workloads in support of this recommendation. The overall Deferred Workloads Population was subdivided into three, non-mutually exclusive sub-populations: claims subject to suspended determinations, retroactive certifications, and employer protests. Accenture performed a risk assessment framework to segment the overall population and sub-populations into low, high-medium, and high risk of potential ineligibility. Qualitative guidance from field offices and case workers was incorporated to inform the quantitative analysis. The use of historical data since 2008 was included to compute ineligibility risk and then applied findings to the current population as appropriate. The deferred workloads population consists of claimants of both UI and PUA programs, and each sub-population was assessed for estimated risk of potential ineligibility for these programs. Both State and Federal level Extension programs were also considered as part of this assessment.

Based on the different availability and granularity of data for each respective population, the risk assessment consists of deterministic and probabilistic approaches, and in some cases - population sizing, where data may be limited in availability. The risk assessment outputs then estimate the upper and lower bounds of likeliness of ineligibility of claims and, of the associated dollar amounts paid out to said claims. As part of this assessment, reference and operational tables have been produced to support the prioritization of determination efforts.

California State Auditor's Assessment of Status: Fully Implemented

The risk analysis commenced on April 12, 2021 and, has continued to progress. Submission of the final analysis is expected by August 31, 2021.

Within the completed risk analysis conducted, the Employment Development Department (EDD) will provide directional estimated ranges of ineligible payments made by EDD corresponding to certain populations of claims. These populations, as identified by the EDD, will include claims, subject to suspended determinations, retroactive certifications, and employer protests based on available data. Additionally, the projections contained in the analysis will consider available historical data to inform expectations from retrospective trends. For illustration, a sample of the on-going analysis related to claims subject to suspended determinations accompanies this update.

At times, the risk analysis may be subject to certain constraints due to the availability of data or, for other reasons. For example, claims subject to only employer protests, that is, claims mutually exclusive from the other populations, population-sizing may be performed with estimated ranges of ineligible payments. Similarly, the ineligible payments segment of the analysis for this specific population may be restricted to those claims with "identity not confirmed", given data constraints.

Based on the risk analysis, the EDD will derive operational tables associated with these populations to identify the impacted SSNs, at the record level. The EDD is also collecting other supporting artifacts, including the attendant business requirements document, data dictionary (where available), and data Q&A records available for review.

California State Auditor's Assessment of Status: Pending

The Unemployment Insurance Branch (UIB) has initiated meetings with a contracted vendor, Accenture, who will assist with a risk assessment of the deferred workloads. Data requirements for analysis have been documented, and data is being gathered for the population of claimant account records in scope. Further definition of business requirements for the output is being conducted to ensure that the analysis will optimally inform the EDD of how to prioritize the workload. This output should help to advise the EDD on downstream considerations for staffing and support.

California State Auditor's Assessment of Status: Pending

All Recommendations in 2020-128/628.1

Agency responses received are posted verbatim.