[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Notices]
[Pages 9164-9166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-2490]


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DEPARTMENT OF LABOR

Employment and Training Administration


Proposed Modification to Unemployment Insurance (UI) Benefit 
Accuracy Measurement (BAM) Investigative Procedures; Submitted for 
Public Comment and Recommendations

ACTION: Notice.

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SUMMARY: The Department of Labor, as part of its continuing effort to 
reduce paperwork and respondent burden, conducts a preclearance 
consultation program to provide the general public and Federal agencies 
with an opportunity to comment on proposed and/or continuing 
collections of information in accordance with the Paperwork Reduction 
Act of 1995 (PRA95) [44 U.S.C. 3506(c)(A)]. This program helps to 
ensure that requested data can be provided in the desired format, 
reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the impact of 
collection requirements on respondents can be properly assessed. 
Currently, the Employment and Training Administration (ETA), Office of 
Workforce Security, is soliciting comments concerning the proposed 
modification of the case investigation procedures for the BAM data 
collection. A copy of the proposed information collection request (ICR) 
can be obtained directly by accessing this Web site: http://www.doleta.gov/Performance/guidance/OMBControlNumber.cfm.

DATES: Written comments must be submitted to the office listed in the 
ADDRESSES section below on or before April 24, 2006.

ADDRESSES: Andrew W. Spisak, U.S. Department of Labor, ETA, Room S-
4522, 200 Constitution Avenue, NW., Washington, DC 20210, Phone: 202-
693-3196 (This is not a toll-free number), Fax: 202-693-3975, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    During fiscal year (FY) 2003, the Department of Labor Office of the

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Inspector General (OIG) conducted an audit of the BAM program. The OIG 
final report (OIG Report Number 22-03-009-03-315, September 30, 2003) 
concluded that the BAM program is methodologically sound and accurately 
detects and reports UI payment errors; however, the BAM case 
investigation procedures potentially miss overpayments caused by 
unreported earnings during the claimant's benefit year. The OIG 
recommended that the BAM audit procedures be modified to include 
crossmatching UI beneficiaries' Social Security Numbers (SSN) against 
the state's intrastate wage records or the State Directory of New Hires 
(SDNH).
    The use of the state wage record files was considered when BAM was 
designed but was not included in the methodology because the data are 
not available in time to insure the completion of BAM case 
investigations within the 90-day timeliness standard which was set to 
insure that information bearing on the propriety of UI payments is 
accurate and contemporaneous. Use of the SDNH as a BAM audit resource 
is encouraged but not required by the current BAM State Operations 
Handbook (ET Handbook No. 395, 4th ed., chapter VI, p. 5):
    The potential for claimant employment during the benefit year 
should be verified using the State Directory of New Hires where 
available. This new hire directory is mandatory under section 453A of 
the Social Security Act, and BAM should access this resource when 
possible.
    Following the OIG's recommendation, ETA conducted a pilot test of 
wage record and SDNH crossmatches as part of the BAM case investigation 
methodology between August 2004 and June 2005. Seven states 
participated--Alabama, Idaho, Illinois, Maine, Missouri, South 
Carolina, and Washington. The pilot showed that use of either the wage 
record or SDNH crossmatch resulted in increased detection of UI 
overpayments. Use of wage record data resulted in an estimated increase 
of 0.36 percentage points in the overpayment rate, and use of the state 
new hire data added an estimated 0.45 percentage points to the 
overpayment rate. The complete BAM Crossmatch Pilot Final Report is at 
http://workforcesecurity.doleta.gov/unemploy/pdf/xmatch_pilot_report.pdf.
    The states that participated in the BAM crossmatch pilot reported 
no significant implementation or operational issues.

II. Review Focus

    The Department of Labor is particularly interested in comments 
which:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submissions of responses.

III. Current Actions

    Based on the results of the pilot, ETA concluded that of the two 
methods tested, crossmatching BAM cases with the new hire directory is 
superior for the following reasons.
     Investigating cases identified by the state wage record 
crossmatch costs a little more than twice as much as investigating 
cases identified by the new hire directory.
     Pilot results indicated that the new hire directory 
crossmatch is somewhat more effective than the wage record crossmatch 
in detecting additional overpayment errors.
     The wage record crossmatch would require the revision of 
BAM payment accuracy rates to reflect the results of the post-audit. 
Chapter VI of ET Handbook No. 395 requires that ``a minimum of 98 
percent of cases for the year must be completed within 120 days of the 
ending date of the Calendar Year.'' Final BAM data could not be 
published until all of the wage record follow-up audits are completed, 
which could be several months after the 120-day close-out deadline for 
the original BAM investigations. In comparison, because the new hire 
directory crossmatches are concurrent with the rest of the BAM 
investigation, the BAM data publication schedule should not be 
adversely affected.
     Implementation of a post-audit requirement would also 
likely have a negative impact on BAM case completion timeliness. As 
each quarter's cases are crossmatched with the most recent wage 
records, BAM investigators would have to follow-up on hits for several 
completed cases while they are conducting audits for current cases. 
This would likely delay completion of the on-going sample cases. The 
pilot states that conducted new hire directory crossmatches as part of 
their BAM investigations reported no change in their case completion 
timeliness.
    In August 2004, Public Law 108-295, section 3, authorized state 
workforce security agencies to access the National Directory of New 
Hires (NDNH) ``for purposes of administering an unemployment 
compensation program under Federal or State law''. During FY 2005, the 
Texas, Utah, and Virginia UI agencies participated in a pilot test 
which matched UI payments against the NDNH data. The results of this 
pilot indicate that because the NDNH includes data for out-of-state, 
Federal civilian, and military employment, and in-state hires by some 
multi-state employers, it is a more effective tool in identifying 
potentially disqualifying employment than the SDNH, which includes only 
intrastate employment data.
    According to the regulation establishing a quality control program 
for UI, each state shall:
    Perform the requirements of this section in accordance with 
instructions issued by the Department, pursuant to Sec.  602.30(a) of 
this part, to ensure standardization of methods and procedures in a 
manner consistent with this part [20 CFR 602.21].
    Further, each state shall:
    Complete prompt and in-depth case investigations to determine the 
degree of accuracy and timeliness in the administration of the State UI 
law and Federal programs with respect to benefit determinations, 
benefit payments, and revenue collections; and conduct other 
measurements and studies necessary or appropriate for carrying out the 
purposes of this part [20 CFR 602.21].
    In order to enhance the ability of BAM to detect erroneous UI 
benefit payments and to ensure that each state follows standard methods 
and procedures with respect to case investigations, ETA proposes to 
modify ET Handbook No. 395, Chapter VI (Investigative Procedures), to 
incorporate crossmatches with the NDNH into the BAM case investigation 
methodology:
    Section 453(i) of the Social Security Act [42 U.S.C. 653(i)] 
directs the Secretary of Health and Human Services to maintain an 
automated database of the State Directory of New Hires records in the 
National Directory of New Hires (NDNH). Public Law 108-295, section 3,

[[Page 9166]]

authorizes state workforce security agencies to access the NDNH ``for 
purposes of administering an unemployment compensation program under 
Federal or State law''. BAM must utilize this resource as part of the 
audit of paid claims to detect and investigate claimant employment 
during the benefit year to determine its effect on the claimant's 
eligibility for UI.
    This requirement will be effective with BAM batch 200801 (sampling 
week beginning December 30, 2007, and ending January 5, 2008). States 
may begin to use the NDNH crossmatch as part of their BAM paid claims 
investigations prior to the effective date. States not participating in 
the NDNH crossmatch prior to the effective date may crossmatch BAM paid 
claims sample cases with their SDNH. However, once the state begins to 
access the NDNH, they must utilize the NDNH as part of the BAM paid 
claims investigation instead of the SDNH. All BAM paid claims 
investigations must include the NDNH crossmatch by the effective date 
(BAM sampling batch 200801).
    BAM auditors will conduct fact-finding for those BAM cases in which 
the claimant's SSN matches one or more records in the NDNH (or SDNH) to 
determine if there are any issues affecting the claimant's eligibility 
for UI benefits for the sampled week. Agencies will conduct fact-
finding according to the procedures in ET Handbook No. 395.
    Pending approval of this information collection request by the 
Office of Management and Budget, ETA will issue technical 
specifications for crossmatching BAM cases with the new hire 
directories. BAM program managers will be responsible for identifying 
the organizational unit within their state that administers their 
state's participation in the NDNH or manages their SDNH and for 
determining the procedures needed to link BAM data with the NDNH or 
SDNH data.
    State agencies that currently use their state's wage records as 
part of the BAM investigation may continue to do so. However, the use 
of wage records as part of the BAM investigation is not required.
    Type of Review: Revision of a currently approved collection.
    Agency: Employment and Training Administration.
    Title: Modification to Unemployment Insurance Benefit Accuracy 
Measurement Investigative Procedures.
    OMB Number: 1205-0245.
    Agency Form Number: BAM State Operations Handbook (ET Handbook No. 
395, 4th ed.).
    Recordkeeping: States are required to follow their state laws 
regarding public record retention in retaining records for this 
proposed data collection system.
    Affected Public: State Workforce Agencies (Primary), individuals, 
businesses, and not-for-profit institutions.
    Total Respondents: 188,984 (unchanged).
    Estimated Total Burden Hours: 429,805 (+6,562 from current burden).
    Total Burden Cost (capital/startup): $38,411 ($739 per agency, 
annualized over 3-year life cycle).
    Total Burden Cost (operating/maintaining): $504,000 (unchanged).
    Comments submitted in response to this comment request will be 
summarized and/or included in the request for Office of Management and 
Budget approval of the information collection request; they will also 
become a matter of public record.

    Dated: February 6, 2006.
Cheryl Atkinson,
Administrator, Office of Workforce Security.
 [FR Doc. E6-2490 Filed 2-21-06; 8:45 am]
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