In a recent audit, California’s Employment Development Department (EDD) was found to have spent more than $4.6 million on monthly service fees for a fleet of over 6,200 mobile devices that were initially meant to support the surge in unemployment claims during the COVID‑19 pandemic. These phones, smartphones and hotspots—acquired in 2020 to let staff work from home—continued to accrue charges well into 2025, long after the statewide stay‑at‑home order was rescinded by Gov. Gavin Newsom.
The audit uncovered thousands of devices that had never left the storage closets of an unemployment office. In one room, investigators catalogued 6,285 phones that had gone unused for a minimum of four months. More than five thousand had been idle for over a year, and almost five hundred had not been activated in more than four years. Because the review looked at only a handful of Verizon and T‑Mobile accounts, the real amount of waste could be even higher.
The discovery adds another blemish to a department already grappling with mismanagement and fraud. In 2021 the agency confirmed that fraudsters had exploited the system for as much as $31 billion in false claims, even filing paperwork on behalf of inmates using names like “Poopy Britches” and “John Doe.” Prosecutors described the scheme as potentially the biggest taxpayer scam in California’s history. By June 2022, the agency had reclaimed $1 billion of those stolen funds.
When the issue surfaced, an EDD spokesperson 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.”
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