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Audit ordered over denied state claims

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POSTED March 13, 2014 8:10 p.m.

SACRAMENTO . (AP) — California lawmakers have ordered an audit to look into a state agency’s handling of unemployment claims and why so many are denied.

A legislative committee voted unanimously Wednesday to direct the state auditor to examine the reasons that half of the Employment Development Department’s initial denials of claims are later overturned by administrative judges, the Los Angeles Times reported.

The high number of appeals being won by claimants means there is a “breakdown in the system,” said Assembly Insurance Committee Chairman Henry T. Perea, D-Fresno, who requested the examination.

“This audit will get to the bottom of the breakdown and help us implement practices that will streamline the system so people won’t have to go through the difficult process of appeal while having no means to pay their bills or put food on the table,” he said.

In a separate vote, the Assembly-Senate Joint Legislative Audit Committee told State Auditor Elaine Howle to make the audit a top priority.

EDD spokeswoman Patti Roberts said the agency “understands the reason for this audit and is supportive of finding ways to avoid any unnecessary appeals that may delay benefits to our customers.”

Howle estimated that her audit would cost $222,360 plus travel and administrative expenses.

The Employment Development Department handles the largest unemployment-insurance program in the nation, doling out $6.6 billion to about 1 million unemployed Californians last year. A software upgrade last September was expected to ease the agency’s ability to verify who was eligible to receive benefits, but it instead resulted in delayed payments to about 150,000 residents.

Last month, the administration of Gov. Jerry Brown announced an overhaul of the unemployment insurance system.

David Lanier, the governor’s secretary of labor and workforce development, unveiled a seven-point initiative that he said is aimed at boosting EDD services, citing the agency’s “unacceptable levels of payment delays and unanswered phone calls.” The plans include hiring 435 new staffers and retaining or rehiring 300 temporary and former workers. Lanier also called for investing in telephone upgrades.

The department said it is now hiring and training additional staff.

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