The U.S. Department of Labor is threatening to cut off federal grant money from California's Employment Development Department unless the state can show furloughs aren't affecting unemployment insurance administration.
Here's the intro from the Monday letter (stamped, "RECEIVED OCT 7 2009") that Richard C.Trigg, regional administrator of the Labor Department's Employment and Training Administration in San Francisco, wrote to EDD Director Patrick Henning:
In light of the fact that the unemployment insurance program (UI) has not been exempted from the state-wide furlough of employees imposed by the Governor, we are writing to advise you that UI Program Letter (UIPL) number 09-98 requires you to demonstrate that no decline in the performance of the UI program will occur as the result of this state-wide action.
The letter cites Social Security Act law as the basis for the Labor Department's concern:
This requirement is intended to ensure proper and prompt delivery of UI services to claimants and employers. Any state action that does not take into account the UI service delivery needs of workers and employers in not a "method of administration" consistent with Section 303(a)(1), SSA. Federal grants to the State could be jeopardized by failure to meet this "methods of administration" requirement of Section 303(a)(l), SSA.
Click here to read Section 303(a)(l).
Then Trigg throws in a bit of recent history:
We note that California is already experiencing difficulty in several critical performance areas including first pay timeliness, non-monetary determination timeliness, appeals timeliness and appeals case aging. Despite Corrective Action Plans for timeliness of first pays, non-monetary determination and appeals, performance has continued to decline over the past year. Your response must specifically address these issues and should cover the California Unemployment Insurance Appeals Board.
We called EDD and then e-mailed several questions about the federal notice. We'll post the department's response when we get it.
Read Trigg's letter by clicking this link.
Thanks to blog user J for sending it our way.