UIPL_22-17_Acc.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION Unemployment Insurance CORRESPONDENCE SYMBOL OUI DATE RESCISSIONS None EXPIRATION DATE Continuing ADVISORY UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. TO STATE WORKFORCE AGENCIES FROM BYRON ZUIDEMA Deputy Assistant Secretary SUBJECT Unemployment Insurance UI Supplemental Funding Opportunity for State Consortia to Modernize Tax and B enefit S ystems 1.Purpose. To notify State Workforce Agencies SWAs of the avai lability of Fiscal Year FY 2017 funds for continued support of state consortia to modernize UI tax and benefit systems by addressing outdated information technology system infrastructures. 2.References. 26 U B Confidentiality and Disclosure of Returns and Return Information 20 CUnemployment Compensation Data Exchange Standardization for Improved Interoperability C U ter UIPL No. 26-11 Unemployment Insurance Supplemental Funding Opportunity for Program Integrity and Performance and System Improvements July 18 2011 UIPL No. 17-12 Unemployment Insurance UI State Information Data Exchange System Mes saging and Communications Toolkit Availability May 9 2012 UUnemployment Insurance Supplemental Funding Opportunity for Program Integrity and Performance and System Improvements May 11 2012 UUnemployment Insurance Supplemental Funding Opportunity for Program Integrity and Performance and System Improvements July 25 2013 UUnemployment Insurance Supplemental Funding Opportunity for Program Integrity and Performance and System Improvements June 16 2014 UUnemployment Insurance Supplemental Funding Opportunity for Program Integrity and Performance and System Improvements June 15 2015 UUnemployment Insurance Supplemental Budget Request SBR Activities Quarterly Program Reporting Form and Instructions April 21 2017 UUnemployment Insurance Supplemental Funding Opportunity for Improved Operations August 21 2017 Tr Employment N otice TEN No. 34-13 Publication of the Final Rule for the Federal-State Unemployment Insurance Program - Data Exchange Standardization as 2 Required by Section 2104 of the Middle Class Tax Relief and Job Creation Act of 2012 June 9 2014 and TEN No. 28-14 Pre -Implementation Planning Checklist for State Unemployment Insurance UI Information Technology IT Modernization Projects March 27 2015 . 3. Background. State UI programs are a critical component of the nation s social and economic safety net. States are heavily dependent on information technology IT systems to carry out their UI operations and to pay benefits to claimants in a timely manner. UI programs in many states operate using aging IT systems some dating from the 1970s. States with these obsolete systems had difficulty ramping up to process recession-level workloads and modifying their systems to accommodate required programs changes such as the Emergency Unemployment Compensation and Federal Additional Compensation programs that were in place during the most recent recession and to implement new Federal requirements. These difficulties delayed payments to eligible unemployed workers and frustrated potential beneficiaries. Problems inherent in these aging systems include lack of flexibility to adapt to program changes and difficulty obtaining maintenance and support due to a scarcity of technical personnel with knowledge of older hardware and software languages. In addition older systems are not designed to meet the expectations of the public claimants and employers for electronic and web-based services. The limited availability of resources to modernize state UI IT infrastructure over the last two decades has left these systems at risk of failure to meet their essential mission. Based on the experience of the few states that have been able to develop new benefits or tax systems and those that are currently in development the cost for a new customized system on average is about 40 to 50 million per benefit or tax system. Most states are in need of a new benefit or tax system or both. The Employment and Training Administration s ETA budget estimates show that the cost of funding individual customized state systems for every state that needs them even if costs were spread over multiple years is unaffordable in the current budget environment and that states must seek collaborative solutions to address the challenge. It is also important to note that the cost of maintaining IT systems has grown substantially and states are spending a much greater percentage of their UI administrative grants on IT infrastructure which cuts into their ability to fund staff to carry out mission critical functions. To address this critical program challenge in FY 2009 ETA began providing funds to state consortia to modernize their UI IT systems as a strategy to reduce cost and accelerate the replacement of the outdated UI benefit and tax systems. The consortia strategy promotes the following principles Development of a core system for multiple states that is only customized as needed for individual states to accommodate state laws and that can be maintained and improved jointly thus reducing costs Limited use of proprietary products and use of open software products where feasible to enable ease of transfer of the system architecture and code base to other states Leveraging all of the products developed by existing consortia for other individual states or other consortia of states moving forward and 3 Positioning the consortia that complete their projects to on-board additional states or to enable the consortia to transfer their code to other states or consortia. ETA continues to work with states to improve UI program performance and modernize outdated IT infrastructures. Following the initial investment in FY 2009 ETA funded SBRs for state consortia to modernize their UI tax and benefit systems in FY 2011 UIPL No. 26- 11 FY 2012 UIPL No. 18-12 FY 2013 UIPL No. 24-13 FY 2014 UIPL No. 13-14 FY 2015 UIPL No. 16-15 and FY 2016 UIPL No. 19-16 . As a condition of funding eligibility those opportunities required states to implement specific strategies in order to qualify for the additional consortium funding. 4. Structure of Funding Opportunity. In recent years some funds appropriated for state administration have remained available due to lower -than-projected workloads. These unearned above-base state UI administration funds were available at the end of the fiscal year for ETA to offer states supplemental funding opportunities for improved operations. This supplemental funding enabled states to implement many of the strategic priorities contained in ETA s integrity strategic plan and to support modernization of state UI systems. Specifically this funding has led to widespread state adoption of strategies such as cross- matching with the National Directory of New Hires NDNH for detecting UI claimants who have returned to work use of the Treasury Offset Program TOP for the recovery of fraud and certain non-fraud overpayments and adopting the State Information Data Exchange System SIDES for timely and accurate exchange of information required from employers to make benefit eligibility determinations. For FY 2017 it is still not certain whether unearned above-base state UI administration funding will become available. As a result ETA is unable to offer SBR funding opportunities for improved operations. In the event that some amount of unearned above- base funding remains available at the end of the fiscal year ETA will use the limited funds remaining to augment base funding for states. ETA continues to strongly encourage all states to prioritize the use of the above-base funding to support for improved operations through the prevention and detection of UI improper benefit payments and efforts to enhance state performance. We are pleased to announce however that the enacted FY 2017 appropriation included 50 million in supplemental funding specifically for continued support of state consortia efforts to modernize UI tax and benefit systems including compliance with the req uirements of 26 U.S.C. 6103 l 10 B . See the Report for the Departments of Labor Health and Human Services and Education and Related Agencies accompanying the Consolidated Appropriations Act of 2017 Public Law No. 115-31 May 5 2017 available at https rules.house.gov sites republicans.rules.house.gov files 115 OMNI DIVISION 20H- 20LABORHHS 20SOM 20OCR 20FY17.pdf . Section 6 of this UIPL describes the SIDES requirements for applicants and how states are able to satisfy these requirements that are a condition of eligibility. To receive any funding through this solicitation a states must attest to the status of SIDES implementation and fully implement and begin using SIDES Web Services and SIDES E-Response see Attachment A . 4 Section 5 of this UIPL describes the types of consortium funding opportunities for UI IT modernization projects that are available to states for FY 2017. State requests must include a realistic timeline with milestones and goals for the project s it commits to implement. By accepting these supplemental funds a state agrees to satisfy the commitment s made in its application. States progress in achieving the timelines and completing the deliverables established in the grant s statement of work will be monitored on a quarterly basis using the reporting format discussed in Section 7 of this UIPL. 5. Consortium Projects. State consortia planning to submit a proposal must comply with the requirements provided in this section and th e SIDES requirements established in Section 6 of this UIPL. The proposal must clearly indicate total project costs including a breakdown of individual state costs. States must indicate the minimum funds necessary to complete the proposed project s . States interested in forming a consortium or on-boarding to a consortium are strongly encouraged to consult with the UI Information Technology Support Center ITSC operated by the National Association of State Workforce Agencies NASWA and to review the UI Information Technology Modernization Guide and other information provided on the UI ITSC website at http itsc. org Pages default.aspx . The purposes for which a consortium of states may submit a proposal are outlined below An existing consortium deploying cloud solutions that need to interface with the Internal Revenue Service IRS and the Social Security Administration whether previously funded by ETA or using state funds may request funds to support compliance with the requirements of 26 U.S.C. 6103 l 10 B and to cover the costs of meeting security requirements. An existing consortium whether funded by ETA or using state funds with completed business requirements for a UI benefits and or tax system may submit a proposal for the design development and implementation activities needed to on -board an additional state to the existing UI benefits and or tax system consortium if a fit- gap analysis has previously been conducted and completed and the states are prepared to move forward with development to on-board the new state. An existing consortium whether funded by ETA or using state funds that has substantially completed development of its system may submit a proposal to conduct a fit-gap analysis to enable on-boarding a new state. The proposal must demonstrate a commitment by the consortium and the state to be on-boarded in order to integrate the new state into the consortium and reflect an agreement to revise the existing consortium agreement governance structure and operating model to accommodate the inclusion of the new state agency. 5 A new consortium of states may submit a proposal to adapt a mature code base from another consortium or state into a modernized UI benefits and or tax system. The consortium must use open source components to the extent feasible and the components must be transferable and available to be shared by multiple SWAs without the need for significant customization. In very limited circumstances such as unanticipated costs for additional subject matter experts SMEs to assist with the project ETA may provide additional funding to an existing consortium that received IT modernization funding under an earlier SBR. The rationale for a request must be compelling and demonstrate that changes in circumstances or situations that were unforeseeable are the cause for the need for additional funding. An existing consortium whether funded by ETA or using state funds may request funds for the development of a subsystem module or component of a UI benefits and or tax system. In recent years a few individual states have used innovative approaches to cost- effectively modernize their IT systems. These approaches include modernization of specific subsystems modules or components that support critical business functions and integrate them within their existing system. For the consortium system a subsystem module or component that is proposed for development must use open source components to the extent feasible be transferable and be available to be shared by multiple states without the need for significant customization and or be hosted in one state which will provide automated services to other states. To promote future cost efficiencies across states and to enable greater leveraging of existing UI modernization investments a consortium of states may request funds to develop a model for the shared management of maintena nce and operational costs. This model is intended to promote cost efficiencies across states and enable greater leveraging of existing UI modernization investments. The model may also include shared state approaches on consortium system maintenance ongoing modernization and adoption of new technologies a shared approach process for procurement to support the consortium s system and coordination among consortium states to enable development. The model is to be developed as a replicable model that may be used by other consortia. Examples of possible consortia applicants for this funding include but are not limited to a group of more than one consortium of states or a consortium of states and an individual state or states. It is expected that the members of a consortium applying for funds in this category will share a common operational element such as a common vendor a common technology approach or platform that poses similar maintenance operations and upgrade challenges. Funding cannot be used to support actual maintenance costs. Examples of what funds in this category can be used to support include securing technology expertise system organizational design experts consultants procurement expertise and coordination among consortium states to enable development of the model. Funding for development costs may be considered in future funding opportunities based on the model created . 6 Consortia are reminded that the project planned by a state consortium must specifically address the following requirements if applicable to their specific SBR proposal Data outputs that meet UI Required Reporting requirements in ETA Handbook No. 401 UI Data Validation requirements as referenced in ETA Handbook No. 361 System interfaces with the ICON network applications System interfaces with SIDES Compliance with appropriate assurances as referenced in ETA Handbook No. 336 Chapter VII including the requirements for Contingency Planning and Automated Information Systems Security Compliance with 20 CFR Part 619 the final rule for Data Exchange Standardization that designates data exchange standards for UI administration with further guidance in TEN No. 34-13 If the project includes an integrated UI Tax system it must provide for the continued reporting of wage records monthly employment and any other factors required under the Quarterly Census of Employment and Wages program and Use of the UI IT Modernization pre -implementation checklist set out in TEN No. 28-14 as a planning tool and repeat the checklist review for these critical elements when the consortium is within at least six months of going live with a newly modernized UI IT system. 6. SIDES Requirements. States must meet each of the SIDES requirements identified in this section to be eligib le for consortium funding through this solicitation. For each strategy states must either commit to implementation and recommend a timeline for completion or attest that the strategy is already complete and provide the completion date. Full Implementation and Use of SIDES. All states must commit to fully implement and use both SIDES Web Services and SIDES E-Response in order to improve the timeliness and quality of separation information needed to adjudicate non-monetary determinations. States must attest to the status of SIDES implementation as part of the application for funding see Attachment A . SIDES is a web-based system that allows electronic transmission of UI information requests from SWAs to employers and Third Party Administrators TPAs as well as transmission of responses containing the requested information back to the requesting agencies. SIDES provides for two methods by which employers can receive and respond to information requests from states SIDES Web Services is a computer-to-computer system best suited for employers and TPAs that typically deal with a large volume of UI information requests. For employers with a limited number of UI claims throughout the year the SIDES E- Response Web site provides an easy and efficient portal for electronically posting responses to information requests from state agencies. SIDES E-Response is available in participating states to any employer or TPA with Internet access. 7 The NASWA ITSC SIDES Team manages the day-to-day operations and maintenance of SIDES. ETA interprets full implementation of SIDES Web Services and SIDES E-Response as the state collaborating with the NASWA ITSC SIDES Team and completing all the steps necessary in order to establish SIDES separation i nformation data exchanges with employers and TPAs on a continuous basis. Full implementation includes the following Use of SIDES Web Services as the only mechanism to communicate all separation requests with employers and TPAs with whom the state is currently exchanging information. As states adopt SIDES Web Services continuing to operate a parallel or dual system or using some other method for obtaining job separation information diminishes the efficiency of the information gathering process and requires state staff employers and TPAs to be trained in and to use multiple methods for data exchange. The exclusive use of SIDES Web Services for receiving all requests and responses to other participants is required by the SIDES Agreement to Participate. 1 ETA knows that a number of states operate centralized business communication hubs for a variety of business interactions across multiple state agencies. States with centralized employer business communication hubs should contact NASWA ITSC SIDES team for technical assistance to support using SIDES in a centralized environment using a single-sign-on option. Implementation of SIDES Web Services with all employers and TPAs that currently participate in SIDES in that state and beginning the SIDES data exchange with newly participating employers and TPAs within 12 months after those parties have completed testing certification with the NASWA ITSC SIDES Team. If a particular employer or TPA is the cause of the delay in implementing the exchange the implementation date will be based on a negotiated schedule with the NASWA ITSC SIDES Team. Expansion of the overall state usage of SIDES Web Services and E-Response with a goal for states to receive employer responses through SIDES Web Services and SIDES E-Response for at least 50 percent of all UI initial claims 2 processed and separately a goal of at least 35 percent of all UI initial claims processed through the SIDES E-Response. To promote employer participation states are strongly encouraged to use SIDES E-Response as the default method by which employers respond to separation information requests. By making SIDES E- Response the default method employers are automatically directed to SIDES E- Response with an opt-out to decline its use. States that have employed the default method approach have dramatically increased employer uptake and use of SIDES. 1 For states to participate in SIDES the NASWA ITSC SIDES Team requires a signed Agreement to Participate. 2 The total number of new initial and additional claims as reported in the ETA 5159 monthly report. 8 Development and implementation of a sustained outreach plan to increase employer participation in SIDES. SIDES offers significant efficiencies to employers and their TPAs especially those that operate in more than one state. Providing standard formats for employer use for information exchanges with state agencies eliminates the need for inefficient manual processes and the need to develop systems to handle each state s forms and processes separately. States also should use at least one SIDES messaging tool either one included in the SIDES marketing toolkit as outlined in UIPL No. 17-12 or another state developed messaging tool to ensure that employers are fully aware of the benefits that SIDES offers. Commitment to work with the NASWA ITSC SIDES Team on a mutually agreeable schedule to accomplish software enhancements and changes within a specific timeframe. This mutually agreed schedule may include timeframes for testing of the business functionality and security features and scheduling of the changes enhancements. SIDES technical staff is available to assist states during this process. The NASWA ITSC SIDES Team provides states with at least six months notice of major software changes upgrades and works with states to determine a feasible and mutually agreeable implementation date. 7. Quarterly Reporting Requirements . E ach state recipient of SBR funds must submit a narrative Quarterly Progress Report ETA 9178 and Quarterly Financial Report ETA 9130 containing updates on the progress and implementation of each grant project as listed in the award letter. For SBRs provided to state consortia for IT modernization projects the lead state is expected to provide the status report on behalf of the partner states. Please refer to UIPL No. 19-15 Change 1 for additional guidance on the submission of quarterly progress reports to meet the reporting and record keeping requirements of these grants. 8. Application and Award of Supple mental Funds. To apply for supplemental funds the lead state in a consortium will be responsible for submitting a joint application on behalf of the participating states using the 2017 SBR Application provided in Attachment A. All consortium proposals must identify a lead state agency identify the states participating in the consortium and explain the projected allocation of and fiscal responsibility for expenditures. Only the lead state must provide a completed Attachment A application. Partner states must only submit a separate SF-424 and SF-424A as well as a budget narrative using the instructions in Attachment C. The proposal must clearly indicate total project costs including a breakdown of individual state costs and how much funding if any the state s are contributing to the project. States must indicate the minimum funds necessary to complete the proposed project s . Depending on the availability of funding and number of proposals deemed eligible for funding it may be necessary to negotiate project funding. The FY 2017 Appropriation provides the authority for states to provide subgrants to other states and non-state entities for activities in accordance with the purpose and conditions of the grant. Additionally proposals must include a copy of the signed agreement s with all participating states. A cover letter must be included and signed by the Administrator of the lead state 9 agency and it must explain the roles of the participating state s in the project as described in the consortium agreement. An application package should contain the following Form provided in Attachment A. An electronic version of Attachment A will be made available to states through the ETA regional offices Form SF-424 OMB No. 4040-0004 http apply07.grants.gov apply forms sample SF424 2 1-V2.1.pdf and SF-424A OMB No. 4040-0006 http apply07.grants.gov apply forms sample SF424A-V1.0.pdf covering all projects in the SBR. Please refer to Attachment B for additional instructions on completing the SF-424 and SF-424A A Budget Narrative to explain the projected costs reflected in each line item of the SF- 424A demonstrating how grant funds will be used. See Attachment C for instructions on completing the budget narrative A copy of the signed agreement s with all participating states and Indirect Costs Applicant states that include indirect costs in the budget must include either a The approved indirect cost rate with a copy of the Negotiated Indirect Cost Rate Agreement NICRA a description of the base used to calculate indirect costs along with the amount of the base and the total indirect costs requested OR b For those applicant states that meet the requirements to use the 10 de minimis rate as described in 2 CFR 200.414 f a description of the modified total direct cost base see 2 CFR 200.68 for definition used in the calculation along with the amount of the base and the total indirect costs requested based on the 10 de minimis rate. The following link contains information regarding the NICRA at DOL http www.dol.gov oasam boc dcd index.htm . Applications that do not follow the format prescribed in this section will be judged to be non- responsive and will not be considered for funding. ETA also reserves the right to negotiate grant amounts with each applicant. States will be required to submit revised forms SF-424 and SF-424A if the final award amount is different from the initial request. New grant agreements will be executed for supplemental funds awarded under this UIPL. The one-time funds available for support of state consortia to modernize UI tax and benefit systems must be obligated by states by September 30 2022 and liquidated by September 30 2023. Funds obligated for state staff and services related to automation acquisitions projects such as SMEs application developers or project management oversight must be obligated by September 30 2022 and liquidated within 90 days thereafter. Funding for state staff cannot be obligated for use at a future date and the obligation may only occur at the time the staff performs services on the project. When projects have been approved a Letter of Award will be issued to the state s listing the proposal that is being funded by the SBR. It will include the funding level and the allocation among states for any consortium projects. Additionally the state will also receive a grant 10 award package that includes a Notice of Obligation as well as the Grant Terms and Conditions. The standard Federal award terms and conditions for FY 2017 ETA grants are available here https www.doleta.gov grants pdf 17StandTermsConds.pdf. 9. Project Modifications. If during the performance period a state wishes to reallocate funds among categories projects within its SBR it must submit a new SF-424A OMB No. 4040- 0006 to the appropriate ETA regional office for approval with a copy to the National Office if the amount to be moved is equal to or exceeds 10 percent of the total grant award received under this UIPL. The state must also submit a request for modification of the grant signed by the state s signatory authority. This information will be submitted to the Grants Officer with a request for modification of the SBR grant to reflect the requested changes. T his request must be provided to the National Office by the lead state. Also all future modification requests to the grant should be sent by email to OUI.IntegritySBRs dol.gov with a copy to the appropriate ETA r egional office. By accepting these funds each state agrees to meet the commitment s made in its application. States may not elect to abandon an approved project and move funds to a different project. State progress in achieving the timelines and completing the deliverables established in the grant s statement of work will be monitored on a quarterly basis using the reporting format discussed in Section 7 of this UIPL. A state s failure to meet these performance requirements could result in questioned costs that must be repaid. 10. OMB Information Collection. OMB Information Collection No 1225-0086 expires on May 31 2019. According to the Paperwork Reduction Act of 1995 no person is required to respond to a collection of information unless such collection displays a valid OMB control number. Public reporting burden for this collection of information is estimated to average 20 hours per response including time for reviewing instructions searching existing data sources gathering and maintaining the data needed and completing and reviewing the collection of information. Send comments about the burden estimated or any other aspect of this collection of information including suggestions for reducing this burden to the U.S. Department of Labor to the attention of the Departmental Clearance Officer 200 Constitution Avenue NW Room N1301 Washington D.C. 20210. Comments may also be emailed to DOL PRA PUBLIC dol.gov. PLEASE DO NOT RETURN THE COMPLETED APPLICATION TO THIS ADDRESS. SEND IT TO THE SPONSORING AGENCY AS SPECIFIED IN THIS ANNOUNCEMENT. 11. Action Requested. State Administrators are requested to a Review the funding opportunity and determine whether the state will apply for any funds under this solicitation b Coordinate with UI program and IT staff to develop a proposal s under this solicitation c Work with the appropriate ETA r egional office to develop an SBR that will best serve the needs of the state. An electronic version of Attachment A will be made available to states through the ETA regional offices and d Submit the SBR application by e-mail to OUI.IntegritySBRs dol.gov by the close of business on October 23 2017 with an electronic copy provided to the appropriate ETA 11 regional office. Late applications will not be accepted. The subject line of the e- mail should include the name of the state and the title Consortium SBR 2017. 12. Inquiries. Questions should be directed to the appropriate ETA r egional office. 13. Attachments. Attachment A 2017 Supplemental Budget Request SBR Application Attachment B Additional Instructions to Complete the SF-424 and SF-424A Attachment C General Instructions for the Completion of a Budget Information Narrative