Report 2014-101 Recommendation 5 Responses

Report 2014-101: Employment Development Department: It Should Improve Its Efforts to Minimize Avoidable Appeals of Its Eligibility Determinations for Unemployment Insurance Benefits (Release Date: August 2014)

Recommendation #5 To: Employment Development Department

To reduce the number of its determinations that are overturned on appeal, EDD should improve its due diligence during the pre-appeal review process by considering appellants' reasons for appealing and by contacting claimants, employers, and third parties when necessary to obtain clarifying information that could result in a redetermination, which could eliminate or reduce the need for some appeals board hearings.

Annual Follow-Up Agency Response From September 2016

As indicated in the prior response, EDD conducted a pre-appeal review pilot from May to July 2015, using a sample of the UI Code Sections with a high California Unemployment Insurance Appeals Board (CUIAB) overturn rate.

Throughout this pilot, EDD identified ways to improve its pre-appeal review process. In August 2016, EDD offered additional guidance on reviewing and reconsidering appealed UI eligibility decisions to its statewide appeals staff through a UI Program Notice. Included in the notice were additional elements for staff to consider when reviewing appellant reasons for appeal. The notice also included guidance on how to use these elements when reassessing the EDD's original eligibility decision.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

From May to July 2015, we conducted a pre-appeal review pilot using a sample of the UI Code Sections with a high overturn rate by the California UI Appeals Board. Our team developed and applied pre-appeal review procedures in reviewing appeal letters to EDD determinations. The contents of the appeals and EDD determinations were analyzed. Data was collected regarding whether additional contact with the claimant or employer was necessary, whether the parties could be reached, the time spent on each appeal, and the number of issues affirmed, reversed, or modified.

The team reviewed 252 appealed issues. Additional information relevant to the disputed legal issue was provided in the written appeal by the appellant for only 44 (17.5%) of the 252 appealed issues. Of those 44 appealed issues, additional contact was warranted in 22 cases. Overall, 39 issues out of the 252 total issues (15.5%) were reversed or modified in favor of the appellant based on the written contents of the appeal letter and/or successful contacts to the claimant and/or employer. Despite those reversals/modifications, eight of those appellants still had outstanding issues needing to be decided by the California UI Appeals Board. On average, the time spent on each pre-appeal review took about 48 minutes, more than two times the baseline. Through this pilot we identified ways to improve our pre-appeal review process and will be providing staff clarifications on the current pre-appeals review practice. Additionally, the lessons learned will be used as a basis in implementing Recommendations 6 and 8.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

6-Month Agency Response

We established a team in January 2015 to implement this recommendation. Our team is meeting to develop their guidelines for reviewing the pre-appeal review process and determining actions that can be taken by our staff at the pre-appeal review point to help reduce the number of overturned determinations. The work of the team has been slightly delayed due to the EDD's need to ensure that our customers are being served in a timely manner during our heaviest workload season. We expect the team to start making recommendations by mid-2015.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

In order to ensure continuity and consistency in our analysis, we are establishing a team that will implement this recommendation. In a phased approach, this same team will also be implementing Recommendations 6 and 8, building on the knowledge they gather through each phase. We are currently making assignments and developing the team's scope of work. The team will begin their work in late 2014 and begin to develop their recommendations in early 2015.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2014-101

Agency responses received are posted verbatim.