California’s troubled Employment Development Department squandered millions on cell phone plans for devices that were shoved in closets and left unused, according to an investigation released Friday.
The California State Auditor revealed that the agency, better known as EDD, wasted more than $4.6 million on monthly service fees for more than 6,200 mobile devices meant to be used for its unemployment insurance branch.
During the Covid pandemic, the agency acquired 7,224 mobile devices — cell phones, smartphones, and wireless hotspots — allowing staff handling a spike in unemployment claim to work remotely.
In April 2025, years after Gov. Gavin Newsom rescinded the state’s stay-at-home order, the agency was still paying monthly service fees for most of those devices, according to the audit.
Investigators described a storage room at an unemployment office that was stuffed with boxed-up phones, many of which had sat unused for years.
Investigators located 6,285 devices that hadn’t been used for at least four months. More than five thousand sat unused for more than a year, and 478 were unused for more than four years.
But the investigation likely understates the total sum wasted because it reviewed only one of several Verizon and T-Mobile accounts the agency maintains, according to auditors.
The mobile device debacle is the latest black mark for the agency, which has struggled with fraud and mismanagement.
In 2021, the agency acknowledged paying out as much as $31 billion in fraudulent unemployment claims. Fraudsters even filed claims on behalf of prison inmates using names like “Poopy Britches” and “John Doe”, according to prosecutors, who called it potentially the biggest taxpayer scam in California history.
As of June 2022, the agency had recovered $1 billion of the pilfered funds, according to a press release from Newsom’s office.
“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,” a spokesperson for EDD said in a statement.
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