Auditor: EDD Paid $4.6M for Unused Mobile Devices

The California State Auditor on Friday reported that the Employment Development Department (EDD) wasted $4.6 million on unused cellphones — an issue which it has since taken steps to resolve.

The problem goes back to the early days of the COVID-19 pandemic, when EDD — along with every other state agency in the nation providing unemployment benefits — experienced a historic surge of benefit applications. To deal with the surge, EDD quadrupled the number of call center staff and purchased equipment to support them.

That included 6,285 mobile devices that EDD paid service fees on even as they went unused for at least four consecutive months. Those fees amounted to $4.6 million.

Verizon, one of the carriers EDD contracted with, provides the agency with a monthly report on inactive devices. Half the devices that went to the Unemployment Insurance (UI) Branch were unused for more than two years; 99 were never used at all.

The agency was paying monthly service fees for 5,097 mobile devices as of April 2025, according to the audit, while its call-taking staff in the UI Branch only amounts to 1,787. During its investigation, State Auditor staff found a storage room containing boxes of unused mobile devices. An EDD manager told the investigators that the devices were stockpiled for future hires or device replacements.

“The results of our investigation likely understate the total amount of EDD’s wasteful spending because we only reviewed one of the department’s 22 Verizon accounts,” the report reads.

While EDD staff told the State Auditor that staff had been directed to review invoices from Verizon, those employees didn’t specifically evaluate whether the devices were being used. The report concluded that “EDD should have realized that it was paying the monthly fees for significantly more mobile devices than it had employees and taken steps to cancel the unneeded lines.”

Since the investigation began, the report noted, EDD has been taking steps to address the issue. The agency’s IT Branch has terminated service for 2,825 devices. The agency is also working on a policy to terminate service for devices that go unused for at least 90 days. The IT Branch has already begun monitoring device usage and sending regular non-usage reports.