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

CLASSIFICATION

UIS

CORRESPONDENCE SYMBOL

TEUPR

ISSUE DATE

November 20, 1998

RESCISSIONS

None

EXPIRATION DATE

November 30, 1999

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 07-99

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

GRACE A. KILBANE
Director
Unemployment Insurance Service

 

SUBJECT

:

UI PERFORMS -- Benefit Payment Control Measures

 

  1. Purpose. To disseminate proposed performance measures for the Benefit Payment Control (BPC) program to State Employment Security Agencies (SESAs) and to solicit comments on the proposed measures.

  2. References. UIPL 30-92; UIPL 41-95; UIPL 10-96.

  3. Background. The Performance Measurement Review (PMR) project, begun in 1988, sought to review and improve the measures used by the Unemployment Insurance Service (UIS) to evaluate SESA operations. Principles established for the measures were that they would be few in number; would have agreed upon validity; and would be primarily, if not exclusively, output measures. Timeliness and/or quality measures were tested for several areas, including first payments, continued claims, adjudication, appeals, and combined wage claims. Many of these measures proved successful and have been implemented in the system now known as UI PERFORMS.

    UIS had established the two current performance measures for BPC in 1982 for the Quality Appraisal (QA) system:

    • Dollar amounts of fraud overpayments recovered compared to fraud overpayments established during the period, and

    • Dollar amounts of nonfraud overpayments recovered compared to nonfraud overpayments established during the period.

    Early in the PMR project, the decision was made to take an incremental approach in its development; thus work in the area of BPC was deferred, and the above measures were never incorporated into PMR/UI PERFORMS.

    In 1996, work recommenced in UI PERFORMS for BPC with a test of 10 indicators some of which might supplement or replace the existing measures. These measures were field tested by three SESAs: West Virginia, Utah, and California. The indicators are in the general categories of:

    • establishment effectiveness;

    • collection effectiveness; and

    • aging of outstanding overpayments.

    See Attachment A for details of the tested measures.

    UIS thoroughly evaluated the test results and developed recommendations for new BPC measures. In September 1998, the test results and UIS' recommendations were presented to the Performance Enhancement Group (PEG), the State/Federal workgroup that has established the principles for UI PERFORMS and continues to provide guidance to its ongoing implementation. Two measures emerged from that meeting -- one from the establishment effectiveness group and one from the collection effectiveness group -- and are being proposed for inclusion in UI PERFORMS as Tier II (non-criterioned) measures.

  4. Proposal. The two measures are:

    The consensus of the PEG was that establishment effectiveness is one of the foundations of a successful BPC program and that it is highly desirable to have a measure in this area. Other ideas were considered in addition to the ones tested, but it was concluded that measure number (1) above was the best alternative. However, weaknesses in this measure were recognized, namely that a low percentile score for this measure could be the result of a very effective prevention program, as opposed to a reflection of weak operations in the area of overpayment establishment. For this reason, the PEG emphasized that SESAs should be encouraged to give serious consideration to this proposal and, if possible, suggest alternatives for establishment effectiveness.

    The second area of importance in a successful BPC program is collection effectiveness. This area has been gauged in the past by the existing measures from the Quality Appraisal (QA) system. The PEG recommended measure number (2) above to replace the QA measures. Both measures (QA and proposed) record the overpaid dollars collected. The difference between them is that in the QA measures, overpaid dollars collected are compared to overpaid dollars established during the period; while in the proposed measure, overpaid dollars collected would be compared to the overpaid dollars considered collectible at the beginning of the period (line 210 on the ETA-227 Report from the end of the previous reporting period), plus overpayments established during the period, minus dollars waived during the period, minus dollars written-off during the period, minus dollars from accounts that have been suspended in accordance with State written law/policy. The proposed measure is considered an improvement over the QA measures because: (1) it focuses on all dollars that should be targeted for collection during the period, and (2) the results are less likely to be "gamed" by decreasing the establishment of overpayments. Consideration was also given to adding "dollars established during the period" to the denominator (the overpaid dollars considered collectible during the period), but consensus was not reached on the matter.

    Unlike the QA measures for BPC, the proposed measures will combine figures from the ETA-227 Report for the fraud and nonfraud categories and for the program categories of UI and UCFE/UCX. This will be consistent with the other UI PERFORMS benefits measures where aggregate figures are tallied, e.g., the first payment time lapse measure combines intrastate and interstate for State UI, UCFE, and UCX; the nonmonetary determination quality measure combines all programs.

  5. Issuance of Federal Register Notice. UIS invites comments on this proposal. Comments received will be used to develop a final proposal that UIS will publish in the Federal Register for further comments from a broader audience.

  6. Action Required. SESA Administrators are requested to review the proposed BPC measures and provide comments to the UIS National Office (attention: Bob Whiting), with a copy to the Regional Office, within 30 days of the date of this document.

  7. Inquiries. Direct any questions to the appropriate Regional Office.

  8. Attachments:

    1. BPC Measures Project Evaluation

    2. Results of Field Test