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

CLASSIFICATION

UI/RQC

CORRESPONDENCE SYMBOL

TEU

ISSUE DATE

November 9, 1992

RESCISSIONS

None

EXPIRATION DATE

January 31, 1993

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 4-93

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

BARBARA ANN FARMER
Administrator
for Regional Management

 

SUBJECT

:

Draft Revenue Quality Control (RQC) Design Documents

  1. Purpose. To report on the progress of the RQC project and to request comments on the proposed RQC State Operations Handbook.

  2. References. UIPL 24-92 (April 23, 1992); UIPL 44-90 (September 21, 1990); UIPL 8-90 (November 15, 1989); UIPL 14-89 (February 8, 1989).

  3. Background.  As indicated in the above directives, RQC is being developed in four separate components: Core RQC, Benefit Charging, Data Validation, and Employer Compliance. Employer Compliance and Data Validation are still in the developmental stages. A pilot study has been completed on B Benefit Charging, and a portion has been incorporated into the Quality Control program. This directive addresses Core RQC.

  4. Consultation Process. State employment security agencies (SESAs) have already received for comment the first two Federal Register Notices setting forth RQC design issues, UIPL 44-90 which included proposed design and the draft RQC State Operations Handbook, and UIPL 24-92 which provided summaries of comments on the proposed RQC design as well as the policy and design decisions which reflected those comments.

    In addition to the changes resulting from feedback to UIPLs and Federal Register Notices, continuous improvements were being made to the design based on meetings with Federal Regional tax specialists. Also, discussions were conducted by the contracting firm of Abt Associates with a panel of State tax experts and Administrators from Connecticut, New York, the District of Columbia, Florida, South Carolina, Wisconsin, Missouri, Oklahoma, North Dakota, California, and Washington.

    Testing the Design. In 1990, the core RQC module was pre-tested in seven States (Massachusetts, Pennsylvania, Kentucky, Oklahoma, Colorado, Hawaii, and Alaska), and pilot-tested in eight States from 1991 to 1992 (New York, Maryland, the District of Columbia, South Carolina, Wisconsin, Iowa, Montana, and California). Revisions were made to the design and to the handbook as a result of these studies. The Benefit Charging module was also pilot tested during 1991 in New York, West Virginia, North Carolina, Minnesota, Utah, and Washington, and the results of this pilot study will be released under separate cover.

    During the four-year development period, the major design and many subsequent improvements were initiated and produced by tax experts serving on assignments from 11 different States (Florida, Alabama, Illinois, Texas, Kansas, New Mexico, Colorado, Utah, California, Oregon, and Washington). The attached RQC Operations Handbook is proposed as the final product.

  5. Core RQC Design. The Core RQC design combines three major methodologies: Computed Measures, Program Reviews, and Surveys.

    1. Computed Measures. Utilizing, for the most part, currently reported data, 14 different indicators of quality will be generated by the SESAs' ongoing quarterly reporting systems. They will continue to be reported and will be used annually by RQC reviewers to prepare their Final Reports on SESA tax operations.

    2. Program Reviews. Based on the Audit model, Program Reviews consist of Systems Reviews and Acceptance Sampling. Systems Reviews extensively examine the SESA's particular set of internal controls and quality assurance systems. This will be done once every three years unless problems have been discovered in acceptance sampling or in previous reviews, or if major changes have taken place since the previous review. To confirm that the SESA's controls are effective in ensuring accurate outputs, small Acceptance Samples of the tax unit outputs or transactions will be examined yearly (e.g., a sample of 46 completed new employer status determinations will be examined once every year to ensure they are accurate).

    3. Surveys. Information will be gathered on methods used to:

      1. facilitate employer compliance,

      2. resolve delinquent reports, and

      3. collect accounts receivable.

      The survey will be completed only once every three years (unless significant changes have occurred in the SESA).

      By analyzing the findings in conjunction with Program Reviews and Computed Measures, exemplary practices can be identified and shared with all SESAs in compendium format or via electronic bulletin board to provide technical assistance.

      The attached RQC Handbook dated July 31, 1992, encompasses the Program Reviews for all the major tax functions - and describes the surveys, sampling specifications, and computed measures associated with each.

  6. Implementation of RQC. Mandatory implementation of Core RQC is scheduled for fiscal year 1993. A period of transition is offered for SESAs to use as lead time for staffing, preparation, training, familiarization, identification of sampling specifications, installation of sampling extraction systems, and practice prior to the mandatory implementation. It is anticipated that further design modifications will be made as a result of the transition process.

  7. Action Required. SESA Administrators are requested to:

    1. Make copies of the proposed RQC State Operations Handbook available to appropriate tax staff and

    2. Comment on the RQC Handbook 45 days from the date of this directive. Comments should be sent to Eve MacDonald, S-4015, Frances Perkins Building, 200 Constitution Ave., N.W., Washington, D.C. 20210, with a copy to the appropriate Regional Office (RO).

  8. Inquiries.  Please direct all inquiries to the appropriate Employment and Training Administration Regional Office.

  9. Attachments. 

NOTE: Attachments not available to DMS