Treasury Offset Program State of Wisconsin Pam James Integrity Conference - March 2012

Treasury Offset Program (TOP) for Wisconsin  TOP Overview  Wisconsin’s TOP Project Approach Technical Strategy Timeline Results  Challenges  Lessons Learned  Questions

TOP Overview  States can refer delinquent unemployment compensation debts to TOP for offset against Federal tax refund payments Initially law limited to debts due to fraud  Expanded in December of 2010 to allow states to recover Non-fraud overpayments and associated penalties/interest if debt is due to failure to report earnings Uncollected employer contributions

TOP Overview  Three Key Work Streams to Get Started Send 60–day notice to debtors  intent to certify Complete IRS Safeguards Procedures Report  SPR/SPR Addendum with IRS to ensure compliance with Publication 1075 – Federal Tax Information (FTI) Security Guidelines Work with FMS on file transfer processes  certify debts  receive offset payments  maintain records

Wisconsin’s TOP Project - Approach  Scope of Wisconsin Implementation Limited to fraud overpayments Excluded Non-fraud due to state law limitation Excluded Employer Delinquencies  Approached with 3 major Work Streams Notification to the Claimants Working with IRS on SPR Addendum Working with FMS on Certification Process  Implemented Processes in Phases Mailed notices in October 2010 (60 day requirement) Certification Weekly Update and Offset – Received 1 st offsets in February 2011

Wisconsin’s Technical Strategy

New TOP Database to house data identified as FTI  Payment Type  Payment Source  Batch Number  Audit Data Secured so that contractors and non-authorized FTI users do not have access UI data base does not contain FTI data  FTI visible on screens to FTI authorized users only  Certain screens – no print allowed  Some export allowed to secure directory for FTI users  For Non-authorized users Claimant Payment Type Blurred on screens Payment Type and Source Blurred when printed

TOP Timeline

Wisconsin TOP Results  Go live 2/15/11  2011 TOP Receipts thru 2011 $3,055,893  2012 TOP Receipts thru 2/08/2012 $4,589,018  Internal Cost – 2800 hours (IT only) Had previous SPR and audit for 1099 data

Wisconsin TOP Results TOP Deposits by Month – through 2/16/2012* March2011 1,598,913 April ,610 May ,123 June ,833 July ,319 August ,495 September ,764 October ,159 November ,471 December2011 1, Total 3,055,893 January2012 9,556 February2012 4,579, Total 4,589,018 LTD Total 7,644,911 *$1.5 million pending

Wisconsin Call Volume Experience

TOP Challenges for Wisconsin  Securing FTI Data in Accordance with Pub 1075  System Design to Secure FTI DATA No contractors can have access to FTI Data Suppressed ability to print screens containing FTI data Blurred data on screens for non-FTI approved users

Wisconsin - TOP Lessons Learned  Contractors cannot have access to FTI data  Able to keep UI file separate from other state agency’s file using TOP  Can certify at the debtor level or the debt level  Cannot use IRS addresses for any purpose other than TOP This is FTI data  Develop and test in phases  Any data returned on the collection file is considered FTI data  Take advantage of webinars and conference calls on TOP and Pub 1075  Be prepared for increase in phone calls

Next Steps  After initial implementation Implemented Warehouse for Analysis Proposed law change to expand for non-fraud Need to tighten process for pending – currently double collecting from DOR and TOP for some debts 1 st Audit – April 2012

Questions?