All States UI Integrity Webinar Friday, July 8th, 2011 11pm-12:30pm ET; or 3pm-4:30pm ET 1

Opening Message Gay Gilbert U.S. Department of Labor Employment & Training Administration Administrator, Office of Unemployment Insurance

Presenters Gay Gilbert, Administrator Dale Ziegler, Deputy Administrator Stephanie Garcia, UI Operations Andy Spisak, UI Performance Management

Our Agenda Review of UIPL 19-11, Reduction of Improper payments Review of UI Virtual Institute Supplemental Budget Request COP Overview Review of UIPL17-11, Performance Measure Q & A Next Steps / Closing

Reducing Improper Payments Review of UIPL 19-11 Reducing Improper Payments http://wdr.doleta.gov/directives/

UIPL 19-11 A call to action for states to join DOL in bringing down the UI improper payment rate by focusing on prevention. UI improper payment rate for 2010 is 11.2%, which is above the rate set forth by IPERA of 10%.(10.6% overpayment rate and .6% underpayment rate). Main causes of overpayments are Benefit Year Earnings (BYE), Separation, Work Search, and Employment Services (ES) Registration.

US Overpayments by Cause – FY2010 Sev./Vac./SSI/Pension $163,394,550 2.3% Dependents Allow. $38,674,704 0.5% Oth. Elig. Iss. $273,182,985 3.9% Other Issues $294,292,567 4.2% Base Period Wage Iss. $380,247,470 5.4% Able+Available $382,738,451 JS Reg. $788,343,823 11.1% Work Search Issues $1,286,707,519 18.2% Separation Issues $1,385,523,642 19.5% Benefit Year Earnings $2,094,269,508 29.5% 7 7

Strategies for Reducing Overpayments Targeting for Prevention: BYE, Separation, & ES registration States form UI Cross-Functional Integrity Taskforces to address integrity issues Mandatory use of the National Directory of New Hires (NDNH) and Automated Claimant Notification Claimant Messaging Implement State Information Data Exchange System (SIDES)

Integrity Virtual Institute High Impact States Integrity Virtual Institute

Virtual Institute on UI Integrity/Improper Payments USDOL has formed a collaboration with11 “high impact” states that have the highest dollar amount of controllable improper payments States formed cross-functional integrity task forces to do two things: Develop state specific strategic plans to bring down the state’s improper payment rate; and Develop a culture that everyone owns integrity. DOL hosted a Virtual Integrity Institute

Joint Integrity Task Force Mission The Joint Integrity Task Force’s mission is to identify a tangible and measureable action plan that will, through process, procedure and other improvements, prevent and detect overpayments in such a way as to materially reduce the overall UI overpayment rate. Further, the Task Force will identify and recommend changes which will create a common ownership over the improper payments issue for all UI staff – serving to create a culture of common ownership and innovation that will continuously improve performance. Finally, the Task Force will identify and share root problems and solutions with the USDOL (and therefore with other states) in an effort to help spread the focus on reducing overpayments throughout the UI system and help to replicate best practices throughout the Nation.

Joint Task Force Key Players: Composition of State Task Forces UI Director BPC Manager Tax Representative Call Center or Intake Representative BAM Representative Adjudications Representative Appeals Representative IT Representative Training Representative

Features of the Integrity Institute States completed a self-assessment tool to identify areas of improvement. States reviewed and analyzed a wide array of data. States task forces had concentrated facilitated sessions to target root causes and develop their action plan. States had access to federal and state Subject Matter Experts (SME) to help with data concerns and technical questions. States shared their strategies with each other.

Strategies Used (cont.) Each state facilitator led their Task Force during break-out sessions to develop the strategic plan. States and USDOL shared information and resources using a SharePoint site. States presented their strategic plans during the final UI Integrity Institute session. States submitted a formal strategic plan one week following the UI Integrity Institute.

Next Steps DOL working to refine the tools used in the Integrity Institute to create an “Institute in a Box” for use by all states Plan to roll out in early September and a call for all states to convene task forces and to create comprehensive action plans to prevent improper payments Envision webinars to train facilitators in each state – more to come on details.

SQSP Process: UIPL 21-11 New requirement to address action strategies to reduce improper payments High Impact States may use their plans developed during the Virtual Institute Encourage other states to focus first on the “call to action” in the UIPL – implementation of improved SDNH and NDNH cross matching and automated claimant notification and SIDES implementation. States can amend their SQSPs later when their comprehensive plans are completed.

Overview of Supplemental Budget Request (SBR) & Forthcoming UIPL

Overview of Supplemental Budget Request (SBR) & Forthcoming UIPL Goals of Funding Solicitation: Accelerate significant state actions to reduce improper payment rates; Provide an opportunity for states to modernize their UI Benefits and/or UI Tax Systems and design and implement technology-based tools to prevent, detect or recover improper UI payments.

SBR Structure of Funding Two Types of funding: Integrity Services Core Integrity Activities Incentive Activities Technology Infrastructure In order to qualify for any funding in either category, states must have already implemented or agree to implement a set of core integrity activities by certain specified dates for which funding is also provided.

STATE INTEGRITY ACTIVITY Core & Incentive Funds STATE INTEGRITY ACTIVITY FUNDS AVAILABLE Core Integrity Activities New Benefit Year Earnings Performance Measure N/A Cross-Functional Task Force NDNH Cross-match and Recommended Operating Procedures $250,000 SIDES Implementation $500,000 Claimant/Employer Messaging $100,000 Employment Service Registration (applies only to those states with error rates above three (3) percent) State Specific Solutions by State Size $400,000/$550,000/$750,000 Incentive Funds (only those states that have completed, or that commit to complete core activities listed above by dates specified below, may apply) $1,000,000

Incentive Funds Use Those states that have implemented, or that commit to implementing, all of the core activities listed above will qualify for additional incentive funds Worker Misclassification Implementing additional state-specific solutions to prevent improper payments

Incentive Funds Use (cont) Payment of the SIDES subscription fees Securing contract staff to support BPC efforts Implementing the TOP Implementing state-specific UI performance improvement projects

Technology Improvements Consortia Develop (or modify and develop) either of the core UI Benefits or Tax and Benefit system designs, which the two state consortia recently developed. Design an additional core UI Benefits or Tax and Benefits system using open source components that is also exportable to other states. Implement technology-based tools designed to prevent, detect or recover improper UI payments.

Application & Award of Supplemental Funds States must submit individual proposals for any or all of the projects described above in one package. However, states should complete a separate request for each activity for which the state is seeking funding. Each proposal will be considered a separate section of the state’s supplemental budget request (SBR), and each will be evaluated individually.

Application & Award of Supplemental Funds (cont.) Name of Project (20% of Total Score) Amount of Funding Requested for this Project State Contact Project Description Project Timeline Description of Costs (20% of Total Score) Staff Costs for Agency & Contract Staff Hardware, Software, & Telecommunications Equipment State Leveraged Resources (Technology Solutions, only) Other

Application & Award of Supplemental Funds (cont.) Strategic Design (30% of Total Score) Measurable Improvements Expected in UI Operations (30% of Total Score) Additional Points for Technology Improvements Use of Consortia Products – 10 points Leveraged funds above 25% - Up to 10 points

Application & Award of Supplemental Funds (cont.) The one-time funds being made available for automation must be obligated by states by September 30, 2013, and liquidated within 90 days of that date Applications to be submitted electronically. Applications are Due by Close of Business August 17, 2011.

Overview of Community of Practice

The Unemployment Insurance Community of Practice Promotes, highlights and showcases Unemployment Insurance (UI) program initiatives A vehicle for states to share and access tools and applications that can be utilized to enhance UI business processes Can be accessed via https://uiworks.workforce3one.org/

BYE Performance Measure Review of UIPL 17-11 BYE Performance Measure

UIPL 17-11 Performance Background The 2010 national Unemployment Insurance improper payment rate is 11.2 %, which exceeds the minimum acceptable Improper Payments Elimination & Recovery Act (IPERA) rate of 10%. Almost 30% of all overpayments are due to BYE errors. This measure will initially evaluate BYE fraud error reductions using BAM data from the last 3 years as a benchmark.

Proposed Measure & Acceptable Level of Performance (ALP) Measure Definition: Percentage of UI benefits overpaid due to BYE fraud. ALP: Reduce the percentage of UI benefits overpaid due to BYE fraud from the baseline level by 35% at the end of the 1st year of implementation & by 50% by the end of the 2nd year. BYE rate will be estimated by the BAM survey. Performance Period: Will be CY based on BAM data. First measurement period will be CY 2012.

Attachment A State Baseline Performance Data & ALP Targets BYE Fraud Rate (Percent of UI Benefits Paid) BYE Fraud Amount Overpaid* Percent of Total BYE Fraud Overpayments 35% Rate Reduction CY 2012 50% Rate Reduction CY 2013 AK 1.75% $2,941,461 0.32% 1.14% 0.88% AL 1.72% $8,472,575 0.91% 1.12% 0.86% AR 5.19% $25,174,572 2.71% 3.37% 2.60% AZ 2.96% $20,621,815 2.22% 1.92% 1.48% CA 2.02% $180,019,495 19.38% 1.31% 1.01% CO 0.64% $5,167,189 0.56% 0.42% CT 1.38% $14,086,765 1.52% 0.90% 0.69% DC 4.47% $7,611,013 0.82% 2.91% 2.24% DE 2.43% $3,880,367 1.58% 1.22% FL 0.78% $18,734,665 0.51% 0.39% GA 0.80% $9,704,799 1.04% 0.52% 0.40% HI 0.10% $335,895 0.04% 0.07% 0.05% IA 0.06% $388,641 0.03% ID 1.77% $5,306,623 0.57% 1.15% 0.89% IL 1.07% $35,695,867 3.84% 0.70% 0.54% IN 1.51% $19,957,187 2.15% 0.98% 0.76% KS $8,065,649 0.87% KY 0.67% $4,941,035 0.53% 0.44% 0.34%

Attachment A State Baseline Performance Data & ALP Targets BYE Fraud Rate (Percent of UI Benefits Paid) BYE Fraud Amount Overpaid* Percent of Total BYE Fraud Overpayments 35% Rate Reduction CY 2012 50% Rate Reduction CY 2013 LA 7.27% $26,891,993 2.89% 4.73% 3.64% MA 1.26% $26,928,388 2.90% 0.82% 0.63% MD 2.05% $18,253,682 1.96% 1.33% 1.03% ME 0.72% $1,486,522 0.16% 0.47% 0.36% MI 0.74% $19,443,703 2.09% 0.48% 0.37% MN 1.18% $13,414,613 1.44% 0.77% 0.59% MO $16,879,423 1.82% 1.36% 1.05% MS 3.34% $8,371,203 0.90% 2.17% 1.67% MT 0.50% $660,194 0.07% 0.33% 0.25% NC 1.79% $36,152,567 3.89% 1.16% ND 0.93% $643,910 0.60% NE $1,853,650 0.20% NH 1.15% $2,126,951 0.23% 0.75% 0.58% NJ $21,231,488 2.29% NM 3.09% $8,337,030 2.01% 1.55% NV 4.77% $38,680,880 4.16% 3.10% 2.39% NY 1.40% $54,666,166 5.88% 0.91% 0.70% OH 1.99% $37,463,596 4.03% 1.29% 1.00%

Attachment A State Baseline Performance Data & ALP Targets BYE Fraud Rate (Percent of UI Benefits Paid) BYE Fraud Amount Overpaid* Percent of Total BYE Fraud Overpayments 35% Rate Reduction CY 2012 50% Rate Reduction CY 2013 OK 1.05% $3,996,826 0.43% 0.68% 0.53% OR 1.91% $21,596,394 2.32% 1.24% 0.96% PA 2.06% $78,866,327 8.49% 1.34% 1.03% PR 3.40% $9,261,672 1.00% 2.21% 1.70% RI 2.09% $6,794,132 0.73% 1.36% SC 2.41% $16,003,760 1.72% 1.57% 1.21% SD 0.61% $280,864 0.03% 0.40% 0.31% TN 1.89% $13,292,396 1.43% 1.23% 0.95% TX 0.52% $14,177,209 1.53% 0.34% 0.26% UT 0.88% $3,228,108 0.35% 0.57% 0.44% VA 1.74% $14,300,604 1.54% 1.13% 0.87% VT $1,656,272 0.18% WA $16,673,952 1.79% 0.62% 0.48% WI 1.51% $20,589,945 2.22% 0.98% 0.76% WV 0.60% $1,487,164 0.16% 0.39% 0.30% WY 2.19% $2,261,733 0.24% 1.42% 1.10% US 1.58% $929,058,930 100.0% 0.79%

Any Questions????