U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

OWS/OIS

ISSUE DATE

October 31, 2001

RESCISSIONS

None

EXPIRATION DATE

Continuing

DIRECTIVE

:

ET HANDBOOK NO. 401, 3RD EDITION, CHANGE 3

 

TO

:

ALL STATE WORKFORCE AGENCIES

 

FROM

:

     /s/
EMILY STOVER DeROCCO
Assistant Secretary

 

SUBJECT

:

ETA 227 Report - Correction and Delay in Effective Date

 

  1. Purpose. To transmit a revised version of the ETA-227 Report, Overpayment Detection and Recovery Activities, with corrected reporting instructions; and to delay the effective date for implementation of the changes.

  2. Background. Change 1 to the 3RD Edition of ET Handbook No. 401 was issued on February 9, 2001, to announce approval of continuation of the ETA-227 Report and to make certain revisions to the report format. Change 2 revised the report format and instructions pertaining to penalties. Change 3 makes an additional revision in the report format to correct an error with Receivables Removed at End of Period and the Outstanding (Balance) at End of Period.

  3. Explanation of Change. Most state laws contain provisions for writing off receivables that are uncollectible; however, some states do not have such provisions. Over the years, the outstanding balances of overpayments had become high in states where uncollectible accounts could not be written off. In order to obtain a better picture of outstanding overpayments for national analyses and planning, ETA had added an Allowance for Doubtful Accounts to the ETA-227 Report. This item reported estimated amounts of overpayments for which "prospects of collection were improbable." The method for estimating this amount was not specified in the report instructions; it was left to each individual state. Allowance for Doubtful Accounts was not used in the calculation to determine the Outstanding (Balance) at End of Period. The Allowance for Doubtful Accounts was subtracted from the Amount Outstanding at End of Period, to obtain Overpayments Considered Collectible at the End Period, an item that was not included in the Outstanding (Balance) at End of Period.

    The revision published in Change 1 replaced the item Allowance for Doubtful Accounts with a new item Receivables Removed at End of Period. This new item sought to standardize the calculation by specifying the age at which reporting of overpayments was to be discontinued for all states, thus making the reporting of overpayments on the ETA-227 consistent with reporting of delinquent taxes on the ETA-581 Report. However, Change 1 neglected to incorporate the new line, Receivables Removed at End of Period, into the calculation to obtain the Outstanding (Balance) at End of Period. Change 3 to the reporting instructions corrects this oversight.

  4. Report Format Changes. The following are the changes to the report format, Section C, Recovery/Reconciliation. The entire chapter is being reissued to reflect these and other minor edits.

    1. Lines 312 and 313.  The order of the items is reversed so that Receivables Removed at End of Period precedes Outstanding at End of Period.

    2. Line 314.  The item Overpayments Considered Collectible at the End of Period is deleted.

  5. Change to Item by Item Instructions 

    1. Line 312.  The narrative instructions for Receivables Removed at End of Period have been amended to state that amounts receivable should be reported on line 506 for three report periods (rather than two) before being removed.

    2. Line 313.  The narrative instructions for Outstanding at End of Period have been corrected to indicate that Penalty from line 109 is used in the computation for Nonfraud, columns 13-14.

  6. New Effective Date. The effective date for implementation of the new report has been changed to provide states with additional time to make the changes. The revised reporting instructions will become effective beginning with the first quarter of Calendar Year 2002; the report is due in the National Office by May 1, 2002. States are responsible for ensuring that all necessary reprogramming is completed by December 31, 2001.

  7. Office of Management and Budget (OMB) Approval. These reporting requirements have been approved by the OMB under the Paperwork Reduction Act of 1995, OMB Approval No. 1205-0173, expiration date November 30, 2003. Persons are not required to respond to this collection of information unless it displays a current valid OMB control number. Respondents' obligation to reply to this reporting requirement is mandatory under the Social Security Act, Section 303(a)(6). Public reporting burden for this collection of information is estimated to average 14 hours per response, including gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the U.S. Department of Labor, Office of Workforce Security, Room S-4231, 200 Constitution Avenue, NW, Washington, DC 20210 (Paperwork Reduction Project 1205-0173).

  8. Handbook Maintenance 

  9. Action Required. State administrators are requested to ensure that the necessary reprogramming is completed by December 31, 2001, in order to accommodate the transition to the revised report format.

  10. Inquiries. Address all inquiries to the appropriate Regional Office.

  11. Attachment. Pages IV-3-1 - IV-3-16 (9/2001).