Aging and slow, EDD’s computers await upgrade

When Gov. Arnold Schwarzenegger went to Germany on March 2 to proclaim California the “high-tech capital of the world,” he didn’t mention that the heart of the state’s ability to get benefits to millions of Californians depends on a decades old, COBOL-based computer system that faces an enormous load and is years overdue for an overhaul.

The system handles claims and checks for the Employment Development Department, which provides benefits for people who have lost their jobs. Lately, that task is unusually difficult: California’s unemployment rate is 10.1 percent, its highest since 1983 and far higher than the national average of 7.6 percent. To Californians, particularly those facing the anguish of unemployment, the EDD is one of the most visible arms of state government.

In January, the state EDD processed a record 525,000 initial claims and extensions for jobless benefits; last month, it was nearly as high. “We had never surpassed more than 500,000 in one month before,” said Loree Levy, EDD’s communications director.

During the same period, the EDD was providing benefits to more than 700,000 people and by one estimate about 1.9 million people were out of work. The average weekly unemployment payment is $307, and in January and February the EDD sent out more than $1.1 billion worth in checks that ranged from $65 to $475 a week. The enormous level of traffic is taxing the system.

The state has been making gradual, incremental improvements in the system and thus far has been able to send out checks in a timely fashion, Levy said. Depending on timing and the Post Office, in most cases it takes about three weeks from the time an application is submitted to the time that the first check is received.

“The long and short of it is that because we have a 30-year-old system based on COBOL language, we really do these walking steps before we bring it up to the point where it is flexible enough (to upgrade),” she said. “It is already a system that is stressed under the current unprecedented demand.” COBOL, an acronym for Common Business-Oriented Language, was first developed in 1959.

Problems with the EDD’s antiquated computer system were reported earlier by the Los Angeles Times.

The $787 billion federal economic recovery package signed last month by President Obama includes some $60 million to overhaul the EDD’s computer system. Just how soon the computer system will be upgraded is uncertain, officials say, although partial upgrades could be accomplished as early as this year.

The computer improvements are crucial in enabling the state to meet conditions set by the federal government so that low-wage jobless workers can qualify for benefits. A full overhaul could take 18 months, however.

About $66 million in federal money flowed to the state several years ago for upgrades at EDD’s electronics. Those projects include enhancing the EDD’s call center and improving the department’s claims-handling capabilities.

Those improvements haven’t yet been completed at least in part because of the extensive vetting and approval process in place for the state’s technology contracting, the result of a number of other major state computer projects that were found over the years to be systemically flawed and too costly.

A dispute over a controversial, $95 million software contract with Oracle several years ago was one of several cases that prompted calls for increased vigilance in state technology contracting. The result: getting approval for major technology upgrades can be a lengthy process.

“The computer system puts a barrier in front of us,” Steffanie A. Watkins, assistant secretary of the California Labor and Workforce Development Agency, told a hearing of the Assembly Insurance Committee.

Want to see more stories like this? Sign up for The Roundup, the free daily newsletter about California politics from the editors of Capitol Weekly. Stay up to date on the news you need to know.

Sign up below, then look for a confirmation email in your inbox.


Support for Capitol Weekly is Provided by: