Introduction

	Welcome to the Tax Performance System (TPS) tutorial.  It is designed to assist new TPS reviewers and to provide an overview of TPS design. It acts as a supplement to TPS Operations Handbook ET No. 407. The tutorial consists of the following sections:   Introduction TPS and its relationship with State and Federal programs is explained. What to Expect The role and responsibilities of each TPS reviewer are described. Overview of TPS' Components TPS' major design components are presented, followed by detailed descriptions of each component.
	Computed Measures Systems Reviews Acceptance Sampling Methods Surveys Annual Report A discussion on presenting TPS findings. Background In the mid 1990s, the US Department of Labor implemented a State operated oversight program known as Revenue Quality Control (RQC), which was later renamed as the Tax Performance System (TPS). The purpose of TPS is to: Measure the quality of State Unemployment Insurance (UI) tax operations Assist State Administrators in improving tax systems Help carry out Federal oversight and technical assistance responsibilities Each TPS reviewer is responsible for producing a TPS Annual Report on the quality of the State's UI tax system. Findings from this Annual Report also become a part of the US Department of Labor's "UI PERFORMS" package.  For information about the UI program, click here.
	UI PERFORMS UI PERFORMS is the UI Program's single, comprehensive performance management system.  It incorporates UI tax, benefits and appeals activity.  Listed below are the key components and what is measured. TPS - Tax Performance System Accuracy, timeliness and quality of UI tax revenue collection and processing are measured. BAM - Benefit Accuracy Measure Accuracy of UI benefit payments and denials are calculated. BTQ - Benefits Timeliness and Quality Measures quality of UI benefit decisions and lower authority appeals.  Timeliness in rendering determinations, appeals, and paying UI benefits are also measured. DV - Data Validation Performance data being reported to US DOL are examined for accuracy. These UI performance measures are categorized as either Tier I or Tier II. Tier I and Tier II Measures There are distinct differences between these two classifications.
	Tier I measures are considered so important that national criteria have been established for each. Measurement criteria are uniform from State to State and allow for comparisons between States. States performing below criterion must submit corrective action plans, and continued poor performance may result in enforcement actions by the US DOL, such as withholding the FUTA tax credit or administrative grants, or deeming State ineligible to participate in certain initiatives. NOTE: Presently, Tier I tax measures only include new employer Status Determination quality and timeliness. (TPS level of acceptable error is set at 2 or fewer failures in a sample of sixty status cases, while the UI PERFORMS level is set at 6 or fewer failures to better reflect minimally satisfactory performance.) Also under consideration for inclusion as a Tier I measure is the timeliness of employer payment deposit to the State's clearing account.
	Tier II measures are also important, but have no uniform national criterion, often because the meaning of measures vary from State to State. Instead, a continuous improvement approach is stressed. States and Regional Offices may negotiate performance targets through the annual State Quality Service plan process. All the other TPS measures fall into the Tier II category.
	Click here for a full list of all TPS measures.
	Federal Data Management Performance data is gathered and entered into the UI database by each State. This information is compiled, extracted and analyzed by the US DOL. UI PERFORMS then produces an Annual Report on the previous year's performance.  For an example, click here .
	To receive Administrative Grants from the US DOL, States submit "Annual Performance and Budget Plans" (also known as State Quality Service Plans (SQSP)) to the US DOL.  Findings on each State's UI performance are  factored into these discussions These plans: Review past performance in relation to Tier I and Tier II. Describe Corrective Action Plans (CAPs) for UI programs that did not meet Tier I criteria. Describe CAPs for any DOL programs (TPS, BAM, etc.) that were not fully performed. Set goals for program improvement. Negotiate problem areas. For more details on the SQSP process, click here. (To be developed by UI Perf staff) Some UI performance information will go into annual reports to Congress.  This is mandated by the Government Performance and Results Act (GPRA)
	GPRA integrates planning, performance, and budget.  It requires States to: Identify long term goals, measures and strategies in a 5-year Strategic Plan. Produce Annual Performance Plans and reports each March. Identify any obstacles and contingency plans to overcome them. Measure and report performance results on annual targets in an Annual Performance accountability report. Submit these reports along with current year's budget request. The following UI-related activity is included in GPRA plans: Tier I UI PERFORMS measures (including new employer Status Determination accuracy and timeliness) Rate of UI recipiency Wage replacement rate Trust Fund solvency Rate of re-employment As can be seen, information related to UI tax activity is a key element at State and Federal levels - considered very important and a critical factor in assessing overall UI performance. How does this relate to the TPS reviewer? Role of the TPS Reviewer Each TPS reviewer is directly responsible for producing, evaluating and reporting a significant portion of this critical information. TPS data will go to the State Administrator, The Regional Office TPS team leader, The US DOL's National Office in Washington, DC And to the US Congress. Conclusion The rest of this tutorial is designed to assist the TPS reviewer in becoming a key participant in the State-Federal relationship.  Please continue working through this tutorial for more details.  The next portion will describe What to Expect as a reviewer.