The audit revealed, at the beginning of the pandemic, the EDD call center answered less than 1% of the calls it received.
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Assemblyman Jim Patterson, (R) Fresno, said, "The auditor found that the call center was essentially worthless."
The state indicated at least $11 billion in fraudulent jobless claims have been paid, while many who qualified for unemployment insurance never received it.
In a letter to Gov. Newsom and lawmakers, State Auditor Elaine Howle said, " EDD responded to the claim surge by suspending its determinations of eligibility for most claimants, thereby compromising the integrity of the UI program."
Patterson believed 2.4 million Californians may be forced to pay back some of their benefits. He explained, "The legitimate ones when the EDD lowered the eligibility requirements are now going to be held to a higher standard and forced to repay."
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The audit added the EDD needed to develop a recession plan and start tracking call center issues.
The agency's new director Rita Saenz said the EDD was committed to implementing state recommendations but added, "The government needs to make investments in good times in infrastructure, technology, funding, and staff training."
Patterson said, "We have technology across the board that is failing Californians, particularly in the EDD."
The audit showed weaknesses in processing could lead to a continued EDD backlog of claims. Over 941,000 Californians still awaited their unemployment checks.