California's unemployment agency wasted $4.6 million on unused phones

California's Employment Development Department (EDD) wasted more than $4.6 million⧉ in state funds paying monthly service fees on mobile devices that sat unused for four or more consecutive months -- in some cases, for more than four years.▸ A California State Auditor investigation, triggered by a whistleblower complaint, found the department never scaled back a fleet of phones it built up during the pandemic, long after the staff who needed them had gone.

In March 2020, EDD's Unemployment Insurance (UI) Branch had 1,264 call representatives.▸ By September 2020⧉, as claims surged during the pandemic, that number had grown to 5,139. To let this expanded workforce operate remotely, EDD procured a total of 7,224 mobile devices -- phones, smartphones, and wireless hotspots -- through December 2020. But staffing didn't stay at pandemic levels: by April 2025, EDD's UI call representatives numbered just 1,787. The devices, and the bills for them, didn't shrink to match.

Of the 7,250 devices the UI Branch procured between November 2020 and April 2025, 87% went unused for at least four consecutive months⧉, more than half sat unused for at least two years, and 7% -- 478 devices -- went unused for four-plus years.▸ Ninety-nine devices were never used at all since EDD started paying their monthly fees in 2020. Investigators found roughly 420 of the unassigned devices stockpiled in a UI Branch storage room, sitting in boxes and on shelves; of 14 devices sampled there, nine hadn't been used in 33 consecutive months, and one had never been used.

EDD management told investigators it hadn't realized it was paying for so many unused devices.▸ The auditor called that explanation implausible⧉: EDD had received monthly nonusage reports from its carrier, Verizon, since 2017, and Verizon's own invoices listed usage and charges side by side for every phone line. EDD said designated staff in each branch were supposed to review those invoices -- but the UI Branch told investigators its staff never actually checked whether the devices were being used.

Once the investigation began, EDD started cutting the fat: on April 13, 2025, it terminated service for 2,825 mobile devices⧉ and began drafting a policy to cut off any device unused for 90 straight days, formally adopted departmentwide on September 3, 2025.▸ The auditor's office also cautions that its own $4.6 million figure is likely a floor, not a ceiling -- it examined just one of EDD's 22 Verizon accounts, the one with the worst nonusage problem, and covers only monthly service fees, not what EDD spent buying the devices in the first place (most were acquired free or discounted through promotions, and EDD couldn't produce complete purchasing records for the rest).

The EDD finding was one of five separate whistleblower investigations bundled into the same California State Auditor report⧉, which together identified more than $5 million in wasted, misused, or unreported state funds.▸ In a smaller but similarly telling finding, the California Air Resources Board kept paying an employee for nearly 15 months after he had fully used up his leave and stopped working, due to inaccurate leave tracking -- a $171,446 overpayment.

At a December 2025 legislative hearing⧉ on the report, Assemblymember John Harabedian, who chairs the Joint Legislative Audit Committee, didn't mince words: "Whether it's a cent, whether it's a dollar, whether it's $4.6 million, it's inexcusable to waste any of that money."▸ Committee vice chair Senator John Laird offered a partial explanation, noting other state departments had loaned EDD staff during the pandemic: "I know at the time other departments were actually loaning staff members to EDD, but it's possible that phones and things were left over from that."