How a California state agency spent millions on unused cell phones

from Adam AshtonCalMatters

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California’s unemployment agency continued to pay cell phone bills for four and a half years without verifying that its employees were actually using the devices.

That’s how it accumulated $4.6 million in fees for mobile devices that workers didn’t use, according to a new state audit detailing wasteful spending at several government agencies.

The employment development department’s exorbitant mobile phone bills date back to the COVID-19 pandemic, when call center workers were relegated to telecommuting and faced pressure to releasing benefits for millions of suddenly unemployed Californians.

It acquired 7,224 cell phones and wireless hotspots by December 2020. State auditors analyzed 54 months of invoices since then and found that half the devices had not been used for at least two years, 25% had not been used for three years, and 99% had not been used at all.

The investigation, which auditors launched after receiving a tip, identified 6,285 devices that had not been used for at least four consecutive months and said the department spent $4.6 million in monthly service fees for them.

Since its inception, the department has had about 2,000 more cellphones than call center employees, according to the audit. The gap widened over time after the pandemic ended and the department’s staff returned to normal numbers.

As of April, the audit said the department had 1,787 jobless call center employees but paid monthly fees to service 5,097 mobile devices.

“While receiving mobile devices during COVID-19 may have been a good idea to serve the public, continuing to pay monthly service fees for so many unused devices, especially after COVID-19, was wasteful,” the audit said.

Department officials told auditors they were unaware of the spending, but auditors pointed to regular invoices from Verizon that showed which phones were not being used.

“We would expect EDD management to reconsider the need to pay monthly service fees for so many devices that did not use voice, messaging or data,” the audit said.

The unemployment office began acting on auditors’ findings in April, when it canceled service plans for 2,825 devices. It has since implemented a policy of terminating service plans for devices that have not been used for 90 days.

California’s state auditor highlighted mobile devices in its regular report on “improper activities by state agencies and officials.” The audit also found that the California Air Resources Board overpaid $171,000 to an employee who was on extended leave as he prepared to retire.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.