October 14, 2011

 Benefit Year Earnings (BYE): 2008 – 2011 Root Causes : BYE - 12% of total overpayments  Claimant Causes:  Unreported Earnings 68%, Incorrect Earnings 23%  Fraud  Confusion on reporting requirements  Estimating past wages without documentation  Agency and Employer  All other causes 9% 2

 Benefit Year Earnings (BYE): Planned action(s) to address:  Expand State Directory of New Hires to include date of new hire and rehire if separation of more than 60 days  Communications Outreach Principal milestones:  Pass required legislation by March 2012  Complete required computer modification by June 2012  Execute employer education strategy by June

 Separations (SEPs): 2008 – 2011 Root Causes Identified: 8% of total overpayments Very complicated state law – all parties bear some responsibility, especially for voluntary quit issues  Claimant solely responsible 39% of the time  Agency and claimant share 23% responsibility  All three parties responsible in 12% of cases  Common factors include:  Complexity of adjudications  Duration of conditional payments as claims adjudicated  Untimely, incomplete responses to info requests 4

 Separations:  Planned action items:  User testing of exiting employer sep information  Employer education and outreach to help employers actively manage claims and prevent fraud  Possible reprioritization of conditional pays in work queues  Explore non-SIDES technology enhancements  Principal milestones:  Review work queue priorities before winter peak 2011  Complete user testing and launch web campaign by March 2012  Design timely response campaign by March 2012  Launch campaign by June 2012  Computer feasibility TBD  (resource challenges) 5

 Work Search Issues: Root Causes Identified: 65% of total overpayments  Agency Causes  State law very stringent  High standard for documentation  No warning for “first failure”  Insufficient time for claimants to respond to in- person interview requirements  Claimant Causes  Inattention to requests for information  Confusion about requirements  Misunderstanding serious consequences of failing job search requirements 6

 Work Search Issues :  Planned Action: Comprehensive Review and Overhaul of Job Search Review Program  Policy, data, operations, claimant messaging and outreach, and technology requirements reviews  Formal recommendations presented to senior agency leadership  Implementation as major project with project management and dedicated staffing  Principal milestones:  Agency project lead already identified  High level planning underway  Incremental changes as possible with full implementation by December

8  Data Integrity  Root causes  Data validation failures on ETA 227  Lack of consistent IT support due to competing priorities  Instability of aging GUIDE system  Possible inconsistent scoring by BAM reviewers  High supervisory and staff turnover  Lack of formal training systems  Few incentives for BAM staff to remain long-term  Planned action(s) to address issue  Trouble-shoot data validation issues  Audit BAM methodology  Review BAM staffing model  Principle milestones  Compete all data integrity tasks by December 2011

 Strategies to Support Owning UI Integrity and Overall Integrity Communications:  No distinction among groups about the importance of integrity, only about which message to send  Pulling demographic information on overpayments by claimant, industry, occupation for targeting purposes  Awaiting DOL research results on what messages work among different target audiences  Trying to identify non-traditional ways to communicate:  (We know what doesn’t work, but not what does…)  Putting together a bare-bones budget that will actually move the needle 9

“Integrity: Own It!”  Questions?  State Contact for follow-up: Jill Will: Phone: