Notice Requesting Public Comment on Two Proposed Unemployment Insurance (UI) Program Performance Measures To Meet Requirements in the Improper Payments Elimination and Recovery Act of 2010 (IPERA), 7604-7609 [2012-3252]

Download as PDF 7604 Federal Register / Vol. 77, No. 29 / Monday, February 13, 2012 / Notices number (202)–693–3008 (this is not a toll-free number) or by email: gibbons.scott@dol.gov. Signed in Washington, DC, this 2nd day of February 2012. Jane Oates, Assistant Secretary, Employment and Training Administration. [FR Doc. 2012–3251 Filed 2–10–12; 8:45 am] BILLING CODE 4510–FW–P DEPARTMENT OF LABOR Employment and Training Administration Notice of a Change in Status of the Payable Periods in the Emergency Unemployment Compensation 2008 (EUC08) Program for Alaska Employment and Training Administration, Labor. ACTION: Notice. AGENCY: This notice announces a change in status of the payable periods in the Emergency Unemployment Compensation 2008 (EUC08) program for Alaska. Public law 112–78 extended provisions in Public Law 111–92 which amended prior laws to create a Third and Fourth Tier of benefits within the EUC08 program for qualified unemployed workers claiming benefits in high unemployment states. The Department of Labor produces a trigger notice indicating which states qualify for EUC08 benefits within Tiers Three and Four and provides the beginning and ending dates of payable periods for each qualifying state. The trigger notice covering state eligibility for the EUC08 program can be found at: http:// ows.doleta.gov/unemploy/ claims_arch.asp. The following change has occurred since the publication of the last notice regarding the State’s EUC08 status: • Alaska’s 13-week insured unemployment rate for the week ending January 7, 2012, rose to meet the 6% threshold to trigger ‘‘on’’ to Tier 4 of the EUC08 program. The payable period for Alaska in Tier Four of EUC08 began January 22, 2012. As a result, the current maximum potential entitlement for claimants in Alaska in the EUC08 program will increase from 47 weeks to 53 weeks. erowe on DSK2VPTVN1PROD with NOTICES SUMMARY: Information for Claimants The duration of benefits payable in the EUC program, and the terms and conditions under which they are payable, are governed by Public Laws 110–252, 110–449, 111–5, 111–92, 111– VerDate Mar<15>2010 14:46 Feb 10, 2012 Jkt 226001 118, 111–144, 111–157, 111–205, 111– 312, and 112–78, and the operating instructions issued to the states by the U.S. Department of Labor. Persons who believe they may be entitled to additional benefits under the EUC08 program, or who wish to inquire about their rights under the program, should contact their State Workforce Agency. FOR FURTHER INFORMATION CONTACT: Scott Gibbons, U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance, 200 Constitution Avenue NW., Frances Perkins Bldg. Room S–4524, Washington, DC 20210, telephone number (202) 693–3008 (this is not a toll-free number) or by email: gibbons.scott@dol.gov. Signed in Washington, DC, this 2nd day of February, 2012. Jane Oates, Assistant Secretary, Employment and Training Administration. [FR Doc. 2012–3253 Filed 2–10–12; 8:45 am] BILLING CODE 4510–FW–P DEPARTMENT OF LABOR Employment and Training Administration Notice Requesting Public Comment on Two Proposed Unemployment Insurance (UI) Program Performance Measures To Meet Requirements in the Improper Payments Elimination and Recovery Act of 2010 (IPERA) Employment and Training Administration (ETA), Labor. ACTION: Notice. AGENCY: The Department of Labor (Department) is seeking public comment on two proposed UI Performs Core Measures for UI Integrity: (1) UI Improper Payments; and (2) UI Overpayment Recovery. DATES: Written comments must be submitted to the office listed in the addresses section below on or before March 14, 2012. ADDRESSES: Written comments may be submitted to the address specified below. All comments will be made available to the public. Warning: Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publically disclosed. All comments may be posted on the Internet and can be retrieved by most Internet search engines. Comments may be submitted anonymously. SUMMARY: PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 • Federal eRulemaking Portal: http:// www.regulations.gov, identified by Docket ID Number ETA–2012–0001. Follow the instructions for submitting comments. • Mail or Hand Delivery/Courier: Please submit all written comments (including disk and CD–ROM submissions) to Mr. Andrew Spisak, U.S. Department of Labor, ETA/Office of Unemployment Insurance, 200 Constitution Avenue NW., Room S– 4524, Washington, DC 20210. Be advised that mail delivery in the Washington, DC area may be delayed due to security concerns. Handdelivered comments will be received at the above address. All overnight mail will be considered to be hand-delivered and must be received at the designated place by the date specified above. Please submit your comments by only one method. The Department will not review comments received by means other than those listed above or that are received after the comment period has closed. The Department will post all comments received on http://www. regulations.gov without making any change to the comments, including any personal information provided. The http://www.regulations.gov Web site is a Federal portal, and all comments posted there are available and accessible to the public. SUPPLEMENTARY INFORMATION: I. Background IPERA [Pub. L. 111–204 (31 U.S.C. 3321 note)] amended the Improper Payments Information Act of 2002 (IPIA) [Pub. L. 107–300 (31 U.S.C. 3321 note)] and established several criteria that Federal agencies must meet in order to be in compliance with the law. According to section 3(a)(3) of IPERA: The term ‘compliance’ means that the agency (F) has reported an improper payment rate of less than 10 percent for each program and activity for which an estimate was published under section 2(b) of the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note). For the 2010 IPIA reporting period, the Department reported an improper payment rate of 11.2 percent (10.6 percent overpayment rate and 0.6 percent underpayment rate) in its Fiscal Year (FY) 2010 Agency Financial Report (AFR), p. 179, (http://www.dol.gov/_sec/ media/reports/annual2010/ 2010annualreport.pdf). For the 2011 IPIA reporting period, the Department reported an improper payment rate of 12.0 percent (11.35 percent overpayment rate and 0.65 percent underpayment rate) in its FY 2011 AFR, p. 204 (http://www.dol.gov/_sec/media/ E:\FR\FM\13FEN1.SGM 13FEN1 Federal Register / Vol. 77, No. 29 / Monday, February 13, 2012 / Notices [A]ll agencies are required to establish annual targets for their payment recapture audit programs that will drive their annual performance. The targets shall be based on the rate of recovery (i.e., amount of improper overpayments recovered divided by the amount of improper overpayments identified). Agencies have the discretion to set their own payment recapture targets for review and approval by OMB, but agencies shall strive to achieve annual recapture targets of at least 85 percent within three years (with the first reporting year being FY 2011, the second FY 2012, and the third FY 2013). In response, the Department has developed statistical models to set recovery targets based on historical performance data and the Administration’s economic assumptions. These targets have been reviewed by OMB and published in the Department’s FY 2011 AFR, p. 215. Because the UI improper payment rate exceeds the 10 percent minimum performance level in IPERA, the Department has developed an Integrity Strategic Plan to bring the UI program into compliance. In June 2011, the Department issued a ‘‘call to action’’ in Unemployment Insurance Program Letter (UIPL) No. 19–11 to ensure that UI integrity is a top priority and to provide tools and support for State agencies to develop strategic plans to reduce improper payments. UIPL No. 33–11 (September 21, 2011) launched an initiative to reduce unacceptably high levels of improper payments in six ‘‘High Priority’’ States. The Department will work closely with these States to support cross-functional teams and develop strategic plans to reduce improper payments below the 10 The Annual Report underpayment (UP) rate is the estimate of: EN13FE12.002</GPH> percent IPERA criterion. UIPL No. 34– 11 (September 28, 2011) provided information on the definition and implementation of the UI Performs Benefit Year Earnings Core Measure to reduce the leading cause of UI improper payments—claimants who return to work and who continue to claim and collect UI benefits. This notice describes and solicits comments on two proposed performance measures to meet the IPERA statutory requirements. The Department establishes measures that capture key dimensions of UI program performance in accordance with applicable legislation and sets criteria or target levels defining acceptable performance according to the measure. If a State’s performance does not attain these levels, the State must take corrective action through its annual State Quality Service Plan (SQSP) (OMB No. 1205–0132, Expiration Date 10/31/ 2014). Comments should be submitted by the date and to the address provided in the addresses section of this notice. VerDate Mar<15>2010 14:46 Feb 10, 2012 Jkt 226001 PO 00000 Frm 00041 Fmt 4703 Sfmt 4725 E:\FR\FM\13FEN1.SGM 13FEN1 EN13FE12.001</GPH> erowe on DSK2VPTVN1PROD with NOTICES II. Proposed Improper Payments Measure Definition and Acceptable Level of Performance (ALP) Measure Definition: Combined percentage of UI benefits overpaid and underpaid, estimated from the results of the Benefit Accuracy Measurement (BAM) survey of paid UI claims in the State UI, Unemployment Compensation for Federal Employees (UCFE), and Unemployment Compensation for ExService Members (UCX) programs. ALP: Section 3(a)(3)(F) of IPERA establishes ‘‘an improper payment rate of less than 10 percent for each program and activity for which an estimate was published under [IPIA].’’ Section 2(e) of IPERA amends section 2 of IPIA and defines an improper payment as ‘‘any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments).’’ In accordance with IPERA requirements, the Department is proposing an ALP of less than 10 percent, first applicable to calendar year (CY) 2012 performance. State performance for the 2011 IPIA reporting period (July 2010 through June 2011) is provided in Attachment A. This ALP will be effective unless the IPERA and/ or IPIA are amended, in which case the Department will bring its ALP into line with the amended requirement. Calculation: The measure would be calculated from BAM data using the following data elements: • Total Overpayment Amount for Key Week (BAM data element h5)—defines the amount overpaid to the claimant in the key week (the paid week selected for audit), excluding overpayments for improper payments caused by another State’s workforce agency. The amounts coded in h5 include overpayment codes 10, 11, 12, 13, and 15 in data element ei2 (Key Week Action). Overpayments attributable to a State workforce agency other than the State agency that selected and audited the payment are excluded (Prior Agency Action (data element ei6) codes 90 to 99). • Total Underpayment Amount for Key Week (BAM data element h6)— defines the amount underpaid to the claimant in the key week, excluding underpayments for improper payments caused by another State’s workforce agency. The amounts coded in h6 include underpayment codes 20, 21, and 22 in data element ei2 (Key Week Action). Underpayments attributable to a State workforce agency other than the State agency that selected and audited the payment are excluded (Prior Agency Action (data element ei6) codes 90 to 99). • Original Amount Paid (BAM data element f13)—defines the amount paid to the claimant in key week. The Annual Report overpayment (OP) rate is the estimate of: weighted by the number of paid UI weeks in the BAM survey population. reports/annual2011/2011annualreport. pdf). In addition, IPERA establishes requirements for payment recapture audits. Office of Management and Budget (OMB) guidelines in Appendix C of OMB Circular A–123, Part I(B)(3), established the follow requirements that Federal agencies must follow: It is derived from the weekly BAM samples; each week’s sample result is 7605 7606 Federal Register / Vol. 77, No. 29 / Monday, February 13, 2012 / Notices It is derived from the weekly BAM samples; each week’s sample result is weighted by the number of paid UI weeks in the BAM survey population. The improper payment (IP) rate (expressed as a percentage) is the sum of the Annual Report overpayment rate plus the underpayment rate: IP = OP + UP. Information on the BAM program is available at http://oui.doleta.gov/ unemploy/bqc.asp. Performance Period: The performance period would be based on BAM data for the CY. Per the BAM State Operations Handbook (ET Handbook 395, 5th edition), 95 percent of BAM cases must be completed within 90 days after the week ending date of the BAM sampling week (referred to as a batch), and 98 percent of BAM cases for the CY must be completed within 120 days after December 31. The first measurement period would be January 1, 2012, to December 29, 2012 (end date of the last BAM sampling batch in 2012). Sampling Error: Because this measure would be based on sample data, the sampling error of the estimated BAM improper payment rate would be taken into account in determining whether a State meets its ALP. All estimates from Performance Period: The performance period would be based on the ETA 227 and ETA 227 EUC data for the CY. Per the Unemployment Insurance Reports Handbook (ET Handbook 401, 4th edition), the December quarter ETA 227 reports are due February 1. The first measurement period would be January 1, 2012, to December 31, 2012. samples are characterized as a distribution of values around the expected value of the universe. The sampling error is used to measure the variability of that distribution, and it is used to determine the probability that the value calculated from a particular sample drawn from a universe that meets an ALP may be below (or above) the true (universe) value. Failure to Meet the ALP: States failing to meet the ALP would be expected to develop a Corrective Action Plan as part of the SQSP. Failures to attain an ALP in the first measurement period would be addressed in the 2014 SQSP (OMB No. 1205–0132, Expiration Date 10/31/ 2014). Data Collection Costs: Because the performance measure would use data collected through the BAM survey, there would be no data collection start-up costs for this performance measure. III. Proposed UI Overpayment Recovery Measure Definition and ALP Measure Definition: OMB Issuance of Revised Parts I and II to Appendix C of OMB Circular A–123 [Part 1(B)(3)] defines the recovery rate as ‘‘the amount of improper overpayments recovered divided by the amount of improper Sampling Error: Not applicable; this measure would be based on population data reported on the ETA 227 reports. Failure to Meet the ALP: States failing to meet the ALP would be expected to develop a Corrective Action Plan as part of the SQSP. Failures to meet the CY 2012 target will be addressed in the overpayments identified.’’ This ratio will be expressed as a percentage. ALP: The Department conducted an analysis of the UI recovery data and has established recovery targets of 64 percent in FY 2012 and 72 percent in FY 2013. These targets were reviewed by OMB and published in the Department’s AFR, p 125. Attachment B outlines the methodology. The Department will use this methodology to compute future recovery targets based on the most recent recovery and other performance data available. State performance data for the period October 1, 2010, through September 30, 2011, the most recent 12-month reporting period available, are provided in Attachment C. Calculation: The measure would be calculated from ETA Overpayment Detection and Recovery reports (ETA 227 and ETA 227 EUC): • Total Overpayments Recovered— section C, the sum of line 302, columns 11, 12, 13, 14, 22, and 23. • Total Overpayments Established Minus Overpayments Waived—section A, the sum of line 101, columns 4, 5, and 21, and line 103, columns 4, 5, and 21, minus section C, the sum of line 308, columns 13, 14, and 23. 2014 SQSP (OMB No. 1205–0132, Expiration Date 10/31/2014). Data Collection Costs: Because the performance measure would use data collected through the ETA 227 and ETA 227 EUC reports, there would be no data collection start-up costs for this performance measure. Attachment A UNEMPLOYMENT INSURANCE INTEGRITY RATES [From: CY 2010 QTR 3] [To: CY 2011 QTR 2] Amount paid AK .................................................................................................................... AL ..................................................................................................................... AR .................................................................................................................... AZ .................................................................................................................... CA .................................................................................................................... CO .................................................................................................................... CT .................................................................................................................... DC .................................................................................................................... DE .................................................................................................................... FL ..................................................................................................................... GA .................................................................................................................... HI ..................................................................................................................... IPIA (OP+UP) (percent) $187,793,437 423,475,745 404,922,070 612,311,633 7,878,548,634 759,225,578 910,540,113 173,907,643 130,506,869 1,981,338,921 1,051,141,752 308,105,469 VerDate Mar<15>2010 14:46 Feb 10, 2012 Jkt 226001 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 E:\FR\FM\13FEN1.SGM 13.06 24.38 12.59 21.70 6.28 16.84 6.62 7.05 11.07 8.36 5.36 3.62 13FEN1 Annual report rate (percent) 12.01 24.15 12.43 21.52 5.78 16.13 5.64 6.26 9.35 8.09 5.05 3.29 Under payment rate (percent) 1.05 .24 .16 .18 .51 .71 .98 .78 1.72 .27 .31 .32 EN13FE12.003</GPH> erowe on DSK2VPTVN1PROD with NOTICES ST 7607 Federal Register / Vol. 77, No. 29 / Monday, February 13, 2012 / Notices UNEMPLOYMENT INSURANCE INTEGRITY RATES—Continued [From: CY 2010 QTR 3] [To: CY 2011 QTR 2] ST Amount paid IA ...................................................................................................................... ID ..................................................................................................................... IL ...................................................................................................................... IN ..................................................................................................................... KS .................................................................................................................... KY .................................................................................................................... LA ..................................................................................................................... MA .................................................................................................................... MD ................................................................................................................... ME .................................................................................................................... MI ..................................................................................................................... MN ................................................................................................................... MO ................................................................................................................... MS .................................................................................................................... MT .................................................................................................................... NC .................................................................................................................... ND .................................................................................................................... NE .................................................................................................................... NH .................................................................................................................... NJ ..................................................................................................................... NM ................................................................................................................... NV .................................................................................................................... NY .................................................................................................................... OH .................................................................................................................... OK .................................................................................................................... OR .................................................................................................................... PA .................................................................................................................... PR .................................................................................................................... RI ..................................................................................................................... SC .................................................................................................................... SD .................................................................................................................... TN .................................................................................................................... TX .................................................................................................................... UT .................................................................................................................... VA .................................................................................................................... VT .................................................................................................................... WA ................................................................................................................... WI ..................................................................................................................... WV ................................................................................................................... WY ................................................................................................................... IPIA (OP+UP) (percent) 517,702,648 244,089,005 2,614,374,425 950,389,758 460,373,464 574,241,696 356,969,426 1,808,499,194 864,135,379 198,708,529 1,608,631,516 1,040,046,493 722,648,523 234,393,333 155,810,976 1,564,424,194 66,158,178 161,824,757 123,301,707 2,770,764,470 270,220,624 642,558,333 3,760,176,447 1,491,641,475 347,057,290 884,638,346 3,329,117,904 265,690,172 289,317,413 486,351,866 43,851,969 539,350,249 2,548,344,654 331,290,619 692,676,373 131,581,881 1,509,672,386 1,154,698,728 217,742,942 97,180,931 14.37 9.60 14.91 60.33 3.64 8.42 32.95 5.54 10.83 17.76 11.91 10.72 8.26 13.73 11.45 10.66 11.87 16.46 8.07 12.51 22.71 9.17 7.39 20.95 6.61 12.13 11.82 10.06 6.06 17.94 17.12 17.92 12.54 10.99 16.73 5.63 15.71 12.73 5.52 9.42 Annual report rate (percent) 12.70 9.52 13.49 59.90 3.61 7.95 31.46 4.20 10.74 16.97 11.40 10.25 7.73 13.15 10.41 10.42 11.30 15.94 6.84 10.86 21.83 8.77 6.99 19.42 6.14 11.80 11.24 8.73 5.65 17.72 16.69 17.77 12.00 10.43 16.57 5.25 15.52 12.37 5.01 8.96 Under payment rate (percent) 1.67 .08 1.42 .42 .02 .47 1.49 1.34 .09 .78 .51 .47 .54 .58 1.03 .24 .57 .52 1.23 1.65 .88 .40 .40 1.53 .47 .32 .58 1.33 .41 .22 .43 .15 .54 .56 .16 .38 .19 .36 .51 .47 Notes: 1. Amount paid includes State UI, UCFE, and UCX payments. 2. Rates exclude agency errors by States other than the sampling State. Source: Benefit Accuracy Measurement. Prepared by: ETA Office of Unemployment Insurance on 18 Jan 12. Attachment B Methodology for Establishing Recovery Targets erowe on DSK2VPTVN1PROD with NOTICES Background As required by the IPERA implementing guidance, ETA has developed UI overpayment recovery targets for FY 2011, FY 2012 and FY 2013. According to Part I(B)(3) of OMB’s IPERA guidelines, ‘‘Issuance of Revised Parts I and II to Appendix C of OMB Circular A–123’’ (April 14, 2011): [A]ll agencies are required to establish annual targets for their payment recapture audit programs that will drive their annual performance. The targets shall be based on the rate of recovery (i.e., amount of improper overpayments recovered divided by the amount of improper overpayments identified). VerDate Mar<15>2010 14:46 Feb 10, 2012 Jkt 226001 Methodology The UI recovery targets involve aggregating overpayments established and recovered under three UI program areas: State UI, permanent Extended Benefits (EB) and the temporary Emergency Unemployment Compensation (EUC) programs. Recoveries are made using the traditional tools available to States in addition to the Federal Tax Offset Program (TOP), implemented by only three States as of the date of the analysis. The recovery targets reflect separate methodologies for projecting recoveries or recovery rates for (a) State UI plus EB recoveries obtained using traditional tools; (b) recoveries of EUC overpayments made using traditional tools; and (c) recoveries of State UI, EB, and EUC overpayments through TOP. Administration economic assumptions as of the time of the analysis were taken into consideration for all projections. PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 a. Traditional State UI and EB recoveries. Recovery estimates for this segment are based on statistical (regression) models that use the historical establishment and recovery data reported on the ETA 227 report to project recoveries for State UI and EB overpayments. The models estimate the relationships between UI overpayments established and recovered for the State UI and EB programs based on several explanatory variables, including the amount of State UI and EB unemployment compensation (UC) program benefit payments, the Total Unemployment Rate (TUR), the overpayment balances available for collection, and the amount of EB program payments as a percentage of total UC benefits paid. The TUR, produced by the Department of Labor, Bureau of Labor Statistics, is used as the primary economic indicator of overall labor market conditions. UI overpayment recovery targets for FY 2011 E:\FR\FM\13FEN1.SGM 13FEN1 7608 Federal Register / Vol. 77, No. 29 / Monday, February 13, 2012 / Notices were projected for the full FY based on actual performance data for the first three quarters. Model projections for FY 2012 and FY 2013 were based on the Administration’s economic assumptions for the TUR and projections of UI and EB payments based on those assumptions. Estimates for FY 2012 and FY 2013 reflect TOP recoveries to the extent that those recoveries reduce overpayment balances available for collection by standard State recovery techniques, for example, recovery through cash, UI benefit offset, liens, wage garnishment, etc. These models exclude EUC establishments and recoveries because EUC is a temporary program without sufficient historical data. b. TOP Recoveries. In 2008, State workforce agencies gained access to TOP to recover UI fraud overpayments that were not more than 10 years old. In December 2010, new legislation expanded TOP access to include nonfraud overpayments resulting from claimants’ failures to report earnings and removed the 10-year limit on the debt. During FY 2011, three States—New York, Michigan, and Wisconsin—began participating in TOP, and data on their recoveries are reported by the U. S. Department of the Treasury. Projections of amounts recovered through TOP are based on the rates of TOP recoveries in these three States relative to the uncollected overpayment balance data from the ETA 227 report and fraud overpayments that the States wrote off as uncollectable before they gained access to TOP. At the beginning of FY 2011, States had uncollected fraud overpayment balances of approximately $3.2 billion, of which about $360 million was amounts written off during the past 10 years. Projected national totals for TOP for the country as a whole are based on very preliminary estimates of the rate at which States begin to access TOP. c. EUC Recoveries. The recovery targets also take into account overpayment establishments and recoveries contributed by the EUC program. It is assumed that EUC overpayment establishments and recoveries will continue into FY 2013 and that collections through traditional techniques and TOP will be based on the amount of unrecovered EUC overpayments. The rates reflect existing information on amounts established and recovered reported on the ETA 227 EUC report. Existing data show that EUC recovery rates are considerably lower than State UI and EB recovery rates. Targets The following table summarizes the UI overpayment recovery rate targets, rounded down to the nearest integer. The UI recovery rates are constructed by dividing UI overpayment recoveries reported on the ETA 227 UI/EB and EUC reports by overpayments established, minus overpayments waived because they are unrecoverable under State law or policy. The sharp increase in recovery targets for FY 2012 and FY 2013 reflects the expected impact of the TOP program. UI + EB + EUC including TOP (Adjusted for Waivers) FY 2011 .............................. 2012 .............................. 2013 .............................. 45% 64% 72% These targets are based on the following assumptions: • The TUR and State UI/EB outlays will not differ significantly from the Administration assumptions in the FY 2012 Budget Midsession Review. The TUR is projected as part of the Administration economic assumptions, and ETA forecasts UI and EB outlays based on the TUR and other economic assumptions. Because amounts of overpayments made, established, and recovered are highly sensitive to economic conditions, any significant change in these economic assumptions will affect the recovery rate estimates of the model. • Recovery activity for overpayments established for the EUC program is expected to continue into FY 2013 with residual recoveries for overpayments established after the expiration of the EUC program. • State agencies will begin to participate in TOP according to the adoption path reflected in the model. Based on Treasury information on State plans for adopting TOP and implementation status, the model assumes that by the end of FY 2011 three States will have enrolled in TOP; by the end of FY 2012, 26 States will participate; and by the end of FY 2013 and beyond, 49 States will participate. The implementation model is quarterly because data from the first three States suggest that over 95 percent of recoveries by TOP occur in the first or second calendar quarters, so the calendar quarter during which a State begins to participate in TOP is critical for estimates of first-year recoveries. Changes in the TOP implementation schedule will have a significant impact on recovery rates. It is important to note that these estimates are based on actual counts of UI overpayments identified and recovered by the State agencies and reported on the ETA 227 reports for the FY 1986 to the third quarter of FY 2011 period, not the estimated UI overpayment rates and amounts that are reported in the Department’s AFR for the IPIA, which are based on the results of the BAM audits of paid claims samples. Targets are also adjusted to exclude overpayments that are waived as unrecoverable by State agencies, according to the definition in the UI Reports Handbook (ET Handbook 401, 4th edition). Additionally, although these targets were developed using historical FY counts of UI overpayments identified and recovered as reported on the ETA 227, they may be applied to a calendar year measurement cycle. As actual data on recoveries accumulate—driven largely by the rate at which States implement TOP—the out-year targets are likely to be revised. Attachment C STATE UI OVERPAYMENTS ESTABLISHED AND RECOVERED [October 2010–September 2011] UI + EB + EUC overpayments established erowe on DSK2VPTVN1PROD with NOTICES ST AK .................................................................................... AL ..................................................................................... AR .................................................................................... AZ .................................................................................... CA .................................................................................... CO .................................................................................... CT .................................................................................... DC .................................................................................... DE .................................................................................... FL ..................................................................................... GA .................................................................................... HI ..................................................................................... IA ...................................................................................... ID ..................................................................................... IL ...................................................................................... IN ..................................................................................... KS .................................................................................... KY .................................................................................... LA ..................................................................................... MA .................................................................................... VerDate Mar<15>2010 18:19 Feb 10, 2012 Jkt 226001 PO 00000 Frm 00044 $10,786,946 43,289,401 15,834,291 49,972,545 355,671,845 68,391,997 24,034,518 12,220,616 8,965,003 147,623,645 23,231,700 2,770,116 15,843,340 15,065,271 182,087,681 42,788,522 34,676,662 19,160,015 26,509,327 52,507,008 Fmt 4703 Sfmt 4703 UI + EB + EUC adjusted OPs established $10,786,946 43,109,121 15,535,040 49,153,663 319,473,699 61,271,197 23,869,538 12,202,781 8,935,039 145,775,041 22,569,632 2,357,971 15,754,367 14,128,402 182,087,681 42,788,522 34,144,019 19,160,015 25,299,358 49,520,685 E:\FR\FM\13FEN1.SGM UI + EB + EUC overpayments recovered $4,926,536 10,989,706 3,548,631 17,927,220 88,802,967 29,375,647 9,940,414 3,673,039 4,552,476 44,571,895 8,087,146 1,435,108 9,341,187 7,303,007 70,338,632 26,348,519 10,576,328 8,310,033 7,617,548 19,786,563 13FEN1 Pct. rec. (percent) 45.67 25.49 22.84 36.47 27.80 47.94 41.64 30.10 50.95 30.58 35.83 60.86 59.29 51.69 38.63 61.58 30.98 43.37 30.11 39.96 7609 Federal Register / Vol. 77, No. 29 / Monday, February 13, 2012 / Notices STATE UI OVERPAYMENTS ESTABLISHED AND RECOVERED—Continued [October 2010–September 2011] UI + EB + EUC overpayments established ST MD ................................................................................... ME .................................................................................... MI ..................................................................................... MN ................................................................................... MO ................................................................................... MS .................................................................................... MT .................................................................................... NC .................................................................................... ND .................................................................................... NE .................................................................................... NH .................................................................................... NJ ..................................................................................... NM ................................................................................... NV .................................................................................... NY .................................................................................... OH .................................................................................... OK .................................................................................... OR .................................................................................... PA .................................................................................... PR .................................................................................... RI ..................................................................................... SC .................................................................................... SD .................................................................................... TN .................................................................................... TX .................................................................................... UT .................................................................................... VA .................................................................................... VT .................................................................................... WA ................................................................................... WI ..................................................................................... WV ................................................................................... WY ................................................................................... 74,634,081 11,251,820 159,904,300 78,107,121 43,124,208 24,647,373 8,315,543 29,499,484 2,829,616 9,203,878 8,765,741 217,078,665 26,144,403 79,263,713 173,450,225 110,977,907 13,589,431 52,034,282 179,666,995 9,015,270 12,555,567 42,786,170 2,598,766 26,502,776 200,713,633 24,886,880 37,941,504 3,181,382 144,933,042 81,590,555 8,231,348 6,047,490 UI + EB + EUC adjusted OPs established 73,857,637 10,473,860 154,893,349 78,107,121 43,124,208 24,647,373 8,243,443 26,206,623 2,819,461 9,203,878 6,758,020 216,569,050 26,144,403 75,184,087 136,332,802 110,839,890 13,589,431 43,226,825 178,969,168 9,015,270 11,690,902 42,315,788 2,511,814 25,426,645 193,763,711 24,659,843 37,941,504 2,097,223 137,873,967 78,734,237 8,231,348 5,741,420 UI + EB + EUC overpayments recovered Pct. rec. (percent) 24,762,560 4,290,528 46,695,875 34,172,193 17,194,165 10,327,401 3,282,896 13,432,770 1,590,573 6,117,042 2,106,741 173,289,168 7,695,583 11,304,039 119,837,684 40,467,585 6,334,034 15,972,461 71,342,580 4,352,634 4,753,249 18,882,525 1,280,515 9,965,361 83,402,654 11,568,309 15,385,906 917,377 71,128,301 53,254,357 3,020,124 2,155,330 33.53 40.96 30.15 43.75 39.87 41.90 39.82 51.26 56.41 66.46 31.17 80.02 29.43 15.04 87.90 36.51 46.61 36.95 39.86 48.28 40.66 44.62 50.98 39.19 43.04 46.91 40.55 43.74 51.59 67.64 36.69 37.54 Notes: 1. UI includes State UI, UCFE, and UCX overpayments. 2. Overpayments established exclude overpayments waived. Source: ETA 227 and ETA 227 EUC Reports. Prepared by Div. of Performance Management on: 18 Jan 12. Signed in Washington, DC, this 2nd day of February, 2012. Jane Oates, Assistant Secretary for Employment and Training. [FR Doc. 2012–3252 Filed 2–10–12; 8:45 am] BILLING CODE 4510–FW–P OFFICE OF MANAGEMENT AND BUDGET Office of Federal Procurement Policy Policy Letter 11–01, Performance of Inherently Governmental and Critical Functions Office of Federal Procurement Policy, Office of Management and Budget. ACTION: Notice; correction to final policy letter. erowe on DSK2VPTVN1PROD with NOTICES AGENCY: The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) is making a correction to the Final Policy SUMMARY: VerDate Mar<15>2010 14:46 Feb 10, 2012 Jkt 226001 Letter ‘‘Performance of Inherently Governmental and Critical Functions’’ (76 FR 56227–56242, September 12, 2011) to clarify that the Policy Letter applies to both Civilian and Defense Executive Branch Departments and Agencies. The original publication of the policy letter was inadvertently addressed only to the Heads of The Civilian Executive Departments and Agencies. Also, OFPP has corrected the citation for additional guidance about conduct of Federally Funded Research and Development Centers (FFRDCs), because the original notice referenced an incorrect Part of the Federal Acquisition Regulation. The corrections below should be used in place of text previously published in the September 12, 2011 notice. All other information from the published Final Policy remains unchanged. The full text of the original notice is available at http:// www.gpo.gov/fdsys/pkg/FR-2011-09-12/ pdf/2011-23165.pdf. FOR FURTHER INFORMATION CONTACT: Mathew Blum, OFPP, (202) 395–4953 or PO 00000 Frm 00045 Fmt 4703 Sfmt 9990 mblum@omb.eop.gov, or Jennifer Swartz, OFPP, (202) 395–6811 or jswartz@omb.eop.gov. Corrections In the Federal Register on September 12, 2011, correct the addressee section for the policy letter on page 56236 of the Federal Register to read as follows: POLICY LETTER 11–01 TO THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES SUBJECT: Performance of Inherently Governmental and Critical Functions. In the Federal Register on September 12, 2011, correct the last sentence in 5– 1(c) on page 56238 to read: Agencies shall also refer to the requirements in FAR Part 35 regarding requirements pertaining to the conduct of FFRDCs. Lesley A. Field, Acting Administrator, Office of Federal Procurement Policy. [FR Doc. 2012–3190 Filed 2–10–12; 8:45 am] BILLING CODE P E:\FR\FM\13FEN1.SGM 13FEN1

Agencies

[Federal Register Volume 77, Number 29 (Monday, February 13, 2012)]
[Notices]
[Pages 7604-7609]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3252]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Employment and Training Administration


Notice Requesting Public Comment on Two Proposed Unemployment 
Insurance (UI) Program Performance Measures To Meet Requirements in the 
Improper Payments Elimination and Recovery Act of 2010 (IPERA)

AGENCY: Employment and Training Administration (ETA), Labor.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Department of Labor (Department) is seeking public comment 
on two proposed UI Performs Core Measures for UI Integrity: (1) UI 
Improper Payments; and (2) UI Overpayment Recovery.

DATES: Written comments must be submitted to the office listed in the 
addresses section below on or before March 14, 2012.

ADDRESSES: Written comments may be submitted to the address specified 
below. All comments will be made available to the public. Warning: Do 
not include any personally identifiable information (such as name, 
address, or other contact information) or confidential business 
information that you do not want publically disclosed. All comments may 
be posted on the Internet and can be retrieved by most Internet search 
engines. Comments may be submitted anonymously.
     Federal eRulemaking Portal: http://www.regulations.gov, 
identified by Docket ID Number ETA-2012-0001. Follow the instructions 
for submitting comments.
     Mail or Hand Delivery/Courier: Please submit all written 
comments (including disk and CD-ROM submissions) to Mr. Andrew Spisak, 
U.S. Department of Labor, ETA/Office of Unemployment Insurance, 200 
Constitution Avenue NW., Room S-4524, Washington, DC 20210. Be advised 
that mail delivery in the Washington, DC area may be delayed due to 
security concerns. Hand-delivered comments will be received at the 
above address. All overnight mail will be considered to be hand-
delivered and must be received at the designated place by the date 
specified above.
    Please submit your comments by only one method. The Department will 
not review comments received by means other than those listed above or 
that are received after the comment period has closed. The Department 
will post all comments received on http://www.regulations.gov without 
making any change to the comments, including any personal information 
provided. The http://www.regulations.gov Web site is a Federal portal, 
and all comments posted there are available and accessible to the 
public.

SUPPLEMENTARY INFORMATION:

I. Background

    IPERA [Pub. L. 111-204 (31 U.S.C. 3321 note)] amended the Improper 
Payments Information Act of 2002 (IPIA) [Pub. L. 107-300 (31 U.S.C. 
3321 note)] and established several criteria that Federal agencies must 
meet in order to be in compliance with the law. According to section 
3(a)(3) of IPERA:

    The term `compliance' means that the agency (F) has reported an 
improper payment rate of less than 10 percent for each program and 
activity for which an estimate was published under section 2(b) of 
the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note).

    For the 2010 IPIA reporting period, the Department reported an 
improper payment rate of 11.2 percent (10.6 percent overpayment rate 
and 0.6 percent underpayment rate) in its Fiscal Year (FY) 2010 Agency 
Financial Report (AFR), p. 179, (http://www.dol.gov/_sec/media/reports/annual2010/2010annualreport.pdf). For the 2011 IPIA reporting 
period, the Department reported an improper payment rate of 12.0 
percent (11.35 percent overpayment rate and 0.65 percent underpayment 
rate) in its FY 2011 AFR, p. 204 (http://www.dol.gov/--sec/media/

[[Page 7605]]

reports/annual2011/2011annualreport.pdf).
    In addition, IPERA establishes requirements for payment recapture 
audits. Office of Management and Budget (OMB) guidelines in Appendix C 
of OMB Circular A-123, Part I(B)(3), established the follow 
requirements that Federal agencies must follow:

    [A]ll agencies are required to establish annual targets for 
their payment recapture audit programs that will drive their annual 
performance. The targets shall be based on the rate of recovery 
(i.e., amount of improper overpayments recovered divided by the 
amount of improper overpayments identified).
    Agencies have the discretion to set their own payment recapture 
targets for review and approval by OMB, but agencies shall strive to 
achieve annual recapture targets of at least 85 percent within three 
years (with the first reporting year being FY 2011, the second FY 
2012, and the third FY 2013).

    In response, the Department has developed statistical models to set 
recovery targets based on historical performance data and the 
Administration's economic assumptions. These targets have been reviewed 
by OMB and published in the Department's FY 2011 AFR, p. 215.
    Because the UI improper payment rate exceeds the 10 percent minimum 
performance level in IPERA, the Department has developed an Integrity 
Strategic Plan to bring the UI program into compliance. In June 2011, 
the Department issued a ``call to action'' in Unemployment Insurance 
Program Letter (UIPL) No. 19-11 to ensure that UI integrity is a top 
priority and to provide tools and support for State agencies to develop 
strategic plans to reduce improper payments.
    UIPL No. 33-11 (September 21, 2011) launched an initiative to 
reduce unacceptably high levels of improper payments in six ``High 
Priority'' States. The Department will work closely with these States 
to support cross-functional teams and develop strategic plans to reduce 
improper payments below the 10 percent IPERA criterion. UIPL No. 34-11 
(September 28, 2011) provided information on the definition and 
implementation of the UI Performs Benefit Year Earnings Core Measure to 
reduce the leading cause of UI improper payments--claimants who return 
to work and who continue to claim and collect UI benefits.
    This notice describes and solicits comments on two proposed 
performance measures to meet the IPERA statutory requirements. The 
Department establishes measures that capture key dimensions of UI 
program performance in accordance with applicable legislation and sets 
criteria or target levels defining acceptable performance according to 
the measure. If a State's performance does not attain these levels, the 
State must take corrective action through its annual State Quality 
Service Plan (SQSP) (OMB No. 1205-0132, Expiration Date 10/31/2014). 
Comments should be submitted by the date and to the address provided in 
the addresses section of this notice.

II. Proposed Improper Payments Measure Definition and Acceptable Level 
of Performance (ALP)

    Measure Definition: Combined percentage of UI benefits overpaid and 
underpaid, estimated from the results of the Benefit Accuracy 
Measurement (BAM) survey of paid UI claims in the State UI, 
Unemployment Compensation for Federal Employees (UCFE), and 
Unemployment Compensation for Ex-Service Members (UCX) programs.
    ALP: Section 3(a)(3)(F) of IPERA establishes ``an improper payment 
rate of less than 10 percent for each program and activity for which an 
estimate was published under [IPIA].'' Section 2(e) of IPERA amends 
section 2 of IPIA and defines an improper payment as ``any payment that 
should not have been made or that was made in an incorrect amount 
(including overpayments and underpayments).'' In accordance with IPERA 
requirements, the Department is proposing an ALP of less than 10 
percent, first applicable to calendar year (CY) 2012 performance. State 
performance for the 2011 IPIA reporting period (July 2010 through June 
2011) is provided in Attachment A. This ALP will be effective unless 
the IPERA and/or IPIA are amended, in which case the Department will 
bring its ALP into line with the amended requirement.
    Calculation: The measure would be calculated from BAM data using 
the following data elements:
     Total Overpayment Amount for Key Week (BAM data element 
h5)--defines the amount overpaid to the claimant in the key week (the 
paid week selected for audit), excluding overpayments for improper 
payments caused by another State's workforce agency.
    The amounts coded in h5 include overpayment codes 10, 11, 12, 13, 
and 15 in data element ei2 (Key Week Action). Overpayments attributable 
to a State workforce agency other than the State agency that selected 
and audited the payment are excluded (Prior Agency Action (data element 
ei6) codes 90 to 99).
     Total Underpayment Amount for Key Week (BAM data element 
h6)--defines the amount underpaid to the claimant in the key week, 
excluding underpayments for improper payments caused by another State's 
workforce agency.
    The amounts coded in h6 include underpayment codes 20, 21, and 22 
in data element ei2 (Key Week Action). Underpayments attributable to a 
State workforce agency other than the State agency that selected and 
audited the payment are excluded (Prior Agency Action (data element 
ei6) codes 90 to 99).
     Original Amount Paid (BAM data element f13)--defines the 
amount paid to the claimant in key week.
    The Annual Report overpayment (OP) rate is the estimate of:

    [GRAPHIC] [TIFF OMITTED] TN13FE12.001
    

    It is derived from the weekly BAM samples; each week's sample 
result is weighted by the number of paid UI weeks in the BAM survey 
population.
    The Annual Report underpayment (UP) rate is the estimate of:

    [GRAPHIC] [TIFF OMITTED] TN13FE12.002
    


[[Page 7606]]


    It is derived from the weekly BAM samples; each week's sample 
result is weighted by the number of paid UI weeks in the BAM survey 
population.
    The improper payment (IP) rate (expressed as a percentage) is the 
sum of the Annual Report overpayment rate plus the underpayment rate:

    IP = OP + UP.

    Information on the BAM program is available at http://oui.doleta.gov/unemploy/bqc.asp.
    Performance Period: The performance period would be based on BAM 
data for the CY. Per the BAM State Operations Handbook (ET Handbook 
395, 5th edition), 95 percent of BAM cases must be completed within 90 
days after the week ending date of the BAM sampling week (referred to 
as a batch), and 98 percent of BAM cases for the CY must be completed 
within 120 days after December 31. The first measurement period would 
be January 1, 2012, to December 29, 2012 (end date of the last BAM 
sampling batch in 2012).
    Sampling Error: Because this measure would be based on sample data, 
the sampling error of the estimated BAM improper payment rate would be 
taken into account in determining whether a State meets its ALP. All 
estimates from samples are characterized as a distribution of values 
around the expected value of the universe. The sampling error is used 
to measure the variability of that distribution, and it is used to 
determine the probability that the value calculated from a particular 
sample drawn from a universe that meets an ALP may be below (or above) 
the true (universe) value.
    Failure to Meet the ALP: States failing to meet the ALP would be 
expected to develop a Corrective Action Plan as part of the SQSP. 
Failures to attain an ALP in the first measurement period would be 
addressed in the 2014 SQSP (OMB No. 1205-0132, Expiration Date 10/31/
2014).
    Data Collection Costs: Because the performance measure would use 
data collected through the BAM survey, there would be no data 
collection start-up costs for this performance measure.

III. Proposed UI Overpayment Recovery Measure Definition and ALP

    Measure Definition: OMB Issuance of Revised Parts I and II to 
Appendix C of OMB Circular A-123 [Part 1(B)(3)] defines the recovery 
rate as ``the amount of improper overpayments recovered divided by the 
amount of improper overpayments identified.'' This ratio will be 
expressed as a percentage.
    ALP: The Department conducted an analysis of the UI recovery data 
and has established recovery targets of 64 percent in FY 2012 and 72 
percent in FY 2013. These targets were reviewed by OMB and published in 
the Department's AFR, p 125. Attachment B outlines the methodology. The 
Department will use this methodology to compute future recovery targets 
based on the most recent recovery and other performance data available. 
State performance data for the period October 1, 2010, through 
September 30, 2011, the most recent 12-month reporting period 
available, are provided in Attachment C.
    Calculation: The measure would be calculated from ETA Overpayment 
Detection and Recovery reports (ETA 227 and ETA 227 EUC):
     Total Overpayments Recovered--section C, the sum of line 
302, columns 11, 12, 13, 14, 22, and 23.
     Total Overpayments Established Minus Overpayments Waived--
section A, the sum of line 101, columns 4, 5, and 21, and line 103, 
columns 4, 5, and 21, minus section C, the sum of line 308, columns 13, 
14, and 23.

[GRAPHIC] [TIFF OMITTED] TN13FE12.003


    Performance Period: The performance period would be based on the 
ETA 227 and ETA 227 EUC data for the CY. Per the Unemployment Insurance 
Reports Handbook (ET Handbook 401, 4th edition), the December quarter 
ETA 227 reports are due February 1. The first measurement period would 
be January 1, 2012, to December 31, 2012.
    Sampling Error: Not applicable; this measure would be based on 
population data reported on the ETA 227 reports.
    Failure to Meet the ALP: States failing to meet the ALP would be 
expected to develop a Corrective Action Plan as part of the SQSP. 
Failures to meet the CY 2012 target will be addressed in the 2014 SQSP 
(OMB No. 1205-0132, Expiration Date 10/31/2014).
    Data Collection Costs: Because the performance measure would use 
data collected through the ETA 227 and ETA 227 EUC reports, there would 
be no data collection start-up costs for this performance measure.

Attachment A

                                     Unemployment Insurance Integrity Rates
                                              [From: CY 2010 QTR 3]
                                               [To: CY 2011 QTR 2]
----------------------------------------------------------------------------------------------------------------
                                                                                   Annual report   Under payment
                       ST                           Amount paid    IPIA  (OP+UP)       rate            rate
                                                                     (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
AK..............................................    $187,793,437           13.06           12.01            1.05
AL..............................................     423,475,745           24.38           24.15             .24
AR..............................................     404,922,070           12.59           12.43             .16
AZ..............................................     612,311,633           21.70           21.52             .18
CA..............................................   7,878,548,634            6.28            5.78             .51
CO..............................................     759,225,578           16.84           16.13             .71
CT..............................................     910,540,113            6.62            5.64             .98
DC..............................................     173,907,643            7.05            6.26             .78
DE..............................................     130,506,869           11.07            9.35            1.72
FL..............................................   1,981,338,921            8.36            8.09             .27
GA..............................................   1,051,141,752            5.36            5.05             .31
HI..............................................     308,105,469            3.62            3.29             .32

[[Page 7607]]

 
IA..............................................     517,702,648           14.37           12.70            1.67
ID..............................................     244,089,005            9.60            9.52             .08
IL..............................................   2,614,374,425           14.91           13.49            1.42
IN..............................................     950,389,758           60.33           59.90             .42
KS..............................................     460,373,464            3.64            3.61             .02
KY..............................................     574,241,696            8.42            7.95             .47
LA..............................................     356,969,426           32.95           31.46            1.49
MA..............................................   1,808,499,194            5.54            4.20            1.34
MD..............................................     864,135,379           10.83           10.74             .09
ME..............................................     198,708,529           17.76           16.97             .78
MI..............................................   1,608,631,516           11.91           11.40             .51
MN..............................................   1,040,046,493           10.72           10.25             .47
MO..............................................     722,648,523            8.26            7.73             .54
MS..............................................     234,393,333           13.73           13.15             .58
MT..............................................     155,810,976           11.45           10.41            1.03
NC..............................................   1,564,424,194           10.66           10.42             .24
ND..............................................      66,158,178           11.87           11.30             .57
NE..............................................     161,824,757           16.46           15.94             .52
NH..............................................     123,301,707            8.07            6.84            1.23
NJ..............................................   2,770,764,470           12.51           10.86            1.65
NM..............................................     270,220,624           22.71           21.83             .88
NV..............................................     642,558,333            9.17            8.77             .40
NY..............................................   3,760,176,447            7.39            6.99             .40
OH..............................................   1,491,641,475           20.95           19.42            1.53
OK..............................................     347,057,290            6.61            6.14             .47
OR..............................................     884,638,346           12.13           11.80             .32
PA..............................................   3,329,117,904           11.82           11.24             .58
PR..............................................     265,690,172           10.06            8.73            1.33
RI..............................................     289,317,413            6.06            5.65             .41
SC..............................................     486,351,866           17.94           17.72             .22
SD..............................................      43,851,969           17.12           16.69             .43
TN..............................................     539,350,249           17.92           17.77             .15
TX..............................................   2,548,344,654           12.54           12.00             .54
UT..............................................     331,290,619           10.99           10.43             .56
VA..............................................     692,676,373           16.73           16.57             .16
VT..............................................     131,581,881            5.63            5.25             .38
WA..............................................   1,509,672,386           15.71           15.52             .19
WI..............................................   1,154,698,728           12.73           12.37             .36
WV..............................................     217,742,942            5.52            5.01             .51
WY..............................................      97,180,931            9.42            8.96             .47
----------------------------------------------------------------------------------------------------------------
Notes: 1. Amount paid includes State UI, UCFE, and UCX payments.
2. Rates exclude agency errors by States other than the sampling State.
Source: Benefit Accuracy Measurement.
Prepared by: ETA Office of Unemployment Insurance on 18 Jan 12.

Attachment B

Methodology for Establishing Recovery Targets

Background

    As required by the IPERA implementing guidance, ETA has 
developed UI overpayment recovery targets for FY 2011, FY 2012 and 
FY 2013. According to Part I(B)(3) of OMB's IPERA guidelines, 
``Issuance of Revised Parts I and II to Appendix C of OMB Circular 
A-123'' (April 14, 2011):

[A]ll agencies are required to establish annual targets for their 
payment recapture audit programs that will drive their annual 
performance. The targets shall be based on the rate of recovery 
(i.e., amount of improper overpayments recovered divided by the 
amount of improper overpayments identified).

Methodology

    The UI recovery targets involve aggregating overpayments 
established and recovered under three UI program areas: State UI, 
permanent Extended Benefits (EB) and the temporary Emergency 
Unemployment Compensation (EUC) programs. Recoveries are made using 
the traditional tools available to States in addition to the Federal 
Tax Offset Program (TOP), implemented by only three States as of the 
date of the analysis. The recovery targets reflect separate 
methodologies for projecting recoveries or recovery rates for (a) 
State UI plus EB recoveries obtained using traditional tools; (b) 
recoveries of EUC overpayments made using traditional tools; and (c) 
recoveries of State UI, EB, and EUC overpayments through TOP. 
Administration economic assumptions as of the time of the analysis 
were taken into consideration for all projections.
    a. Traditional State UI and EB recoveries. Recovery estimates 
for this segment are based on statistical (regression) models that 
use the historical establishment and recovery data reported on the 
ETA 227 report to project recoveries for State UI and EB 
overpayments. The models estimate the relationships between UI 
overpayments established and recovered for the State UI and EB 
programs based on several explanatory variables, including the 
amount of State UI and EB unemployment compensation (UC) program 
benefit payments, the Total Unemployment Rate (TUR), the overpayment 
balances available for collection, and the amount of EB program 
payments as a percentage of total UC benefits paid. The TUR, 
produced by the Department of Labor, Bureau of Labor Statistics, is 
used as the primary economic indicator of overall labor market 
conditions. UI overpayment recovery targets for FY 2011

[[Page 7608]]

were projected for the full FY based on actual performance data for 
the first three quarters. Model projections for FY 2012 and FY 2013 
were based on the Administration's economic assumptions for the TUR 
and projections of UI and EB payments based on those assumptions. 
Estimates for FY 2012 and FY 2013 reflect TOP recoveries to the 
extent that those recoveries reduce overpayment balances available 
for collection by standard State recovery techniques, for example, 
recovery through cash, UI benefit offset, liens, wage garnishment, 
etc. These models exclude EUC establishments and recoveries because 
EUC is a temporary program without sufficient historical data.
    b. TOP Recoveries. In 2008, State workforce agencies gained 
access to TOP to recover UI fraud overpayments that were not more 
than 10 years old. In December 2010, new legislation expanded TOP 
access to include nonfraud overpayments resulting from claimants' 
failures to report earnings and removed the 10-year limit on the 
debt. During FY 2011, three States--New York, Michigan, and 
Wisconsin--began participating in TOP, and data on their recoveries 
are reported by the U. S. Department of the Treasury. Projections of 
amounts recovered through TOP are based on the rates of TOP 
recoveries in these three States relative to the uncollected 
overpayment balance data from the ETA 227 report and fraud 
overpayments that the States wrote off as uncollectable before they 
gained access to TOP. At the beginning of FY 2011, States had 
uncollected fraud overpayment balances of approximately $3.2 
billion, of which about $360 million was amounts written off during 
the past 10 years. Projected national totals for TOP for the country 
as a whole are based on very preliminary estimates of the rate at 
which States begin to access TOP.
    c. EUC Recoveries. The recovery targets also take into account 
overpayment establishments and recoveries contributed by the EUC 
program. It is assumed that EUC overpayment establishments and 
recoveries will continue into FY 2013 and that collections through 
traditional techniques and TOP will be based on the amount of 
unrecovered EUC overpayments. The rates reflect existing information 
on amounts established and recovered reported on the ETA 227 EUC 
report. Existing data show that EUC recovery rates are considerably 
lower than State UI and EB recovery rates.

Targets

    The following table summarizes the UI overpayment recovery rate 
targets, rounded down to the nearest integer. The UI recovery rates 
are constructed by dividing UI overpayment recoveries reported on 
the ETA 227 UI/EB and EUC reports by overpayments established, minus 
overpayments waived because they are unrecoverable under State law 
or policy. The sharp increase in recovery targets for FY 2012 and FY 
2013 reflects the expected impact of the TOP program.

------------------------------------------------------------------------
                                                         UI + EB + EUC
                                                         including TOP
                         FY                              (Adjusted for
                                                           Waivers)
------------------------------------------------------------------------
2011................................................                 45%
2012................................................                 64%
2013................................................                 72%
------------------------------------------------------------------------

    These targets are based on the following assumptions:
     The TUR and State UI/EB outlays will not differ 
significantly from the Administration assumptions in the FY 2012 
Budget Midsession Review. The TUR is projected as part of the 
Administration economic assumptions, and ETA forecasts UI and EB 
outlays based on the TUR and other economic assumptions. Because 
amounts of overpayments made, established, and recovered are highly 
sensitive to economic conditions, any significant change in these 
economic assumptions will affect the recovery rate estimates of the 
model.
     Recovery activity for overpayments established for the 
EUC program is expected to continue into FY 2013 with residual 
recoveries for overpayments established after the expiration of the 
EUC program.
     State agencies will begin to participate in TOP 
according to the adoption path reflected in the model. Based on 
Treasury information on State plans for adopting TOP and 
implementation status, the model assumes that by the end of FY 2011 
three States will have enrolled in TOP; by the end of FY 2012, 26 
States will participate; and by the end of FY 2013 and beyond, 49 
States will participate. The implementation model is quarterly 
because data from the first three States suggest that over 95 
percent of recoveries by TOP occur in the first or second calendar 
quarters, so the calendar quarter during which a State begins to 
participate in TOP is critical for estimates of first-year 
recoveries. Changes in the TOP implementation schedule will have a 
significant impact on recovery rates.
    It is important to note that these estimates are based on actual 
counts of UI overpayments identified and recovered by the State 
agencies and reported on the ETA 227 reports for the FY 1986 to the 
third quarter of FY 2011 period, not the estimated UI overpayment 
rates and amounts that are reported in the Department's AFR for the 
IPIA, which are based on the results of the BAM audits of paid 
claims samples. Targets are also adjusted to exclude overpayments 
that are waived as unrecoverable by State agencies, according to the 
definition in the UI Reports Handbook (ET Handbook 401, 4th 
edition).
    Additionally, although these targets were developed using 
historical FY counts of UI overpayments identified and recovered as 
reported on the ETA 227, they may be applied to a calendar year 
measurement cycle. As actual data on recoveries accumulate--driven 
largely by the rate at which States implement TOP--the out-year 
targets are likely to be revised.

Attachment C

                                 State UI Overpayments Established and Recovered
                                          [October 2010-September 2011]
----------------------------------------------------------------------------------------------------------------
                                     UI + EB + EUC       UI + EB + EUC       UI + EB + EUC
               ST                    overpayments        adjusted OPs        overpayments          Pct. rec.
                                      established         established          recovered           (percent)
----------------------------------------------------------------------------------------------------------------
AK..............................         $10,786,946         $10,786,946          $4,926,536               45.67
AL..............................          43,289,401          43,109,121          10,989,706               25.49
AR..............................          15,834,291          15,535,040           3,548,631               22.84
AZ..............................          49,972,545          49,153,663          17,927,220               36.47
CA..............................         355,671,845         319,473,699          88,802,967               27.80
CO..............................          68,391,997          61,271,197          29,375,647               47.94
CT..............................          24,034,518          23,869,538           9,940,414               41.64
DC..............................          12,220,616          12,202,781           3,673,039               30.10
DE..............................           8,965,003           8,935,039           4,552,476               50.95
FL..............................         147,623,645         145,775,041          44,571,895               30.58
GA..............................          23,231,700          22,569,632           8,087,146               35.83
HI..............................           2,770,116           2,357,971           1,435,108               60.86
IA..............................          15,843,340          15,754,367           9,341,187               59.29
ID..............................          15,065,271          14,128,402           7,303,007               51.69
IL..............................         182,087,681         182,087,681          70,338,632               38.63
IN..............................          42,788,522          42,788,522          26,348,519               61.58
KS..............................          34,676,662          34,144,019          10,576,328               30.98
KY..............................          19,160,015          19,160,015           8,310,033               43.37
LA..............................          26,509,327          25,299,358           7,617,548               30.11
MA..............................          52,507,008          49,520,685          19,786,563               39.96

[[Page 7609]]

 
MD..............................          74,634,081          73,857,637          24,762,560               33.53
ME..............................          11,251,820          10,473,860           4,290,528               40.96
MI..............................         159,904,300         154,893,349          46,695,875               30.15
MN..............................          78,107,121          78,107,121          34,172,193               43.75
MO..............................          43,124,208          43,124,208          17,194,165               39.87
MS..............................          24,647,373          24,647,373          10,327,401               41.90
MT..............................           8,315,543           8,243,443           3,282,896               39.82
NC..............................          29,499,484          26,206,623          13,432,770               51.26
ND..............................           2,829,616           2,819,461           1,590,573               56.41
NE..............................           9,203,878           9,203,878           6,117,042               66.46
NH..............................           8,765,741           6,758,020           2,106,741               31.17
NJ..............................         217,078,665         216,569,050         173,289,168               80.02
NM..............................          26,144,403          26,144,403           7,695,583               29.43
NV..............................          79,263,713          75,184,087          11,304,039               15.04
NY..............................         173,450,225         136,332,802         119,837,684               87.90
OH..............................         110,977,907         110,839,890          40,467,585               36.51
OK..............................          13,589,431          13,589,431           6,334,034               46.61
OR..............................          52,034,282          43,226,825          15,972,461               36.95
PA..............................         179,666,995         178,969,168          71,342,580               39.86
PR..............................           9,015,270           9,015,270           4,352,634               48.28
RI..............................          12,555,567          11,690,902           4,753,249               40.66
SC..............................          42,786,170          42,315,788          18,882,525               44.62
SD..............................           2,598,766           2,511,814           1,280,515               50.98
TN..............................          26,502,776          25,426,645           9,965,361               39.19
TX..............................         200,713,633         193,763,711          83,402,654               43.04
UT..............................          24,886,880          24,659,843          11,568,309               46.91
VA..............................          37,941,504          37,941,504          15,385,906               40.55
VT..............................           3,181,382           2,097,223             917,377               43.74
WA..............................         144,933,042         137,873,967          71,128,301               51.59
WI..............................          81,590,555          78,734,237          53,254,357               67.64
WV..............................           8,231,348           8,231,348           3,020,124               36.69
WY..............................           6,047,490           5,741,420           2,155,330               37.54
----------------------------------------------------------------------------------------------------------------
Notes: 1. UI includes State UI, UCFE, and UCX overpayments.
2. Overpayments established exclude overpayments waived.
Source: ETA 227 and ETA 227 EUC Reports.
Prepared by Div. of Performance Management on: 18 Jan 12.


    Signed in Washington, DC, this 2nd day of February, 2012.
Jane Oates,
Assistant Secretary for Employment and Training.
[FR Doc. 2012-3252 Filed 2-10-12; 8:45 am]
BILLING CODE 4510-FW-P