UIPL_21-15_Acc.pdf

ETA Advisory File Text

ADVISORY UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 21-15 TO STATE WORKFORCE AGENCIES FROM PORTIA WU s Assistant Secretary SUBJECT Fiscal Year FY 2016 State Workforce Agency Unemployment Insurance UI Resource Planning Targets and Guidelines 1. Purpose. To provide a. Preliminary FY 2016 dollar and staff year base resource planning targets for UI operations to be used in planning and developing State Quality Service Plans SQSP b. General guidelines for FY 2016 resource planning and c. An explanation of how the Department of Labor Department allocates base resources among states. 2. References. a. Employment and Training ET Handbook No. 336 18th Edition Unemployment Insurance UI State Quality Service Planning SQSP and Reporting Guidelines b. ET Handbook No. 410 4th Edition Resource Justification Model RJM and c. Training and Employment Guidance Letter TEGL No. 05-06. 3. FY 2016 Base Funding Level. Over the past several years actual UI claims-related workloads have been steadily declining to the point where base workloads allocated at a 2.4 million average weekly insured unemployment AWIU level have a high likelihood of exceeding the total actual workloads experienced during the year. As such it has become necessary to lower the level at which base workloads are allocated to a 2.2 million AWIU level. This will help ensure proper and efficient utilization of available administrative funding. The total amount for the FY 2016 UI planning targets formulated at a 2.2 million AWIU is 2 461 201 000. This includes 2 344 468 000 for base UI administration and 116 733 000 for postage. These amounts are included in the Administration s FY 2016 Budget request. If the final appropriation differs significantly from the request adjustments may be made to the allocations. 4. Data Inputs. Minutes Per Unit MPU values annual hours worked non-workload staff years personal services personnel benefits PS PB rates and non-personal services NPS dollars for FY 2016 are drawn from the Resource Justification Model RJM data collection submitted in 2015. The RJM data collection methodology is explained in ET Handbook No. EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION UI CORRESPONDENCE SYMBOL OUI DFAS DATE August 20 2015 RESCISSIONS None EXPIRATION DATE September 30 2020 410. Base workloads are developed by the actuarial staff subject to the national limits of base workloads. The following table shows the data inputs used for the planning targets for FY 2015 and FY 2016. These inputs are described in more detail in section 7. DATA INPUTS CATEGORY FY 201 5 Targets FY 2016 Targets Base Workloads National Office projections formulated at a 2.4 million AWIU National Office projections formulated at a 2.2 million AWIU MPU values Average of actual for FY 2011 2012 and 2013 less state dollars hours Average of actual for FY 2012 2013 and 2014 less state dollars hours Annual hours worked FY 201 5 projected FY 201 6 projected Non -Workload Staff Years FY 2013 actual FY 2014 actual PS PB rates FY 201 3 actual increased annually by 3 percent FY 201 4 actual increased annually by 3 percent NPS dollars Average o f actual expenditures in FY 2011 inflated to FY 2013 FY 2012 inflated to FY 2013 and FY 2013 not including state dollars and one-time costs and increased annually by 3 percent. Average of actual expenditures in FY 2012 inflated to FY 2014 FY 2013 inflated to FY 2014 and FY 2014 not including state dollars and one-time costs and increased annually by 3 percent . Both state supplemental PS PB expenditures and the hours worked paid associated with those expenditures were excluded from state RJM inputs effectively leaving the PS PB rates intact but reducing annual hours worked and MPU values. 5. Reduction to Availability. The data inputs described above supports a national total base state funding request of 2 713 549 256 for FY 2016. At this requested funding level the total amount available for the FY 2016 base allocation would be 2 344 468 000. The amount of funds available for allocation in each category e.g. Workload Support Administrative Staff and Technical Services AS T and NPS is determined by multiplying the percent each category represented of the total requested amount by the total dollars available with two exceptions the requested amounts for Benefit Payment Control BPC and UI Performs were not changed in the targets. 6. Highlights of Base Planning Targets. a. Economic Assumptions. The FY 2016 UI planning targets reflect the economic assumptions used in the FY 2016 President s budget request. 2 b. Base Workload Level. As mentioned above the FY 2016 national base claims-related workloads were formulated at 2.2 million AWIU. This results in all states receiving some reduction in FY 2016 base funding from the FY 2015 allocation. c. Funding Period. The funding period is the period during which states may obligate funds. The State Unemployment Insurance and Employment Service Operations SUIESO appropriation language contained in the FY 2016 President s budget request provides that states may obligate FY 2016 UI grant funds through December 31 2016. However states may obligate FY 2016 UI grant funds through September 30 2018 if such obligations are for automation acquisitions competitive grants awarded to states for improved operations to conduct in-person assessments and reviews and provide reemployment services and referrals or for activities addressing worker misclassification. The FY 2016 SUIESO appropriation language also included a provision that would allow funding for automation acquisitions carried out through consortia of states to be obligated by states through September 30 2021 and expended by September 30 2022. States have an additional 90 days after the end of the funding period to liquidate obligations. If an extension of the liquidation period is necessary a state must seek the approval of the Grant Officer. States should submit requests to extend the liquidation period in writing to the regional office at least 30 days before the existing deadline. 7. Allocation Methodologies. A detailed description of the allocation methodologies follows. a. UI Base Staff. Workload Functions Allocation Methodology. The allocation methodology seeks to achieve four objectives to the greatest extent possible equitably allocate available resources so that the same level of service to claimants and employers is available in all states promote administrative efficiency enable resources to shift with workloads and avoid abrupt shifts of resources among states from year to year. Data Sources. Time Factors. The MPU values are an average of the data for FY 2012 FY 2013 and FY 2014. The MPUs were calculated from data submitted in the RJM data collection instrument. Work Hours. The hours per staff year are the FY 2016 projected hours reported in the January 2015 RJM submission. Workload Forecasts. Each state s total FY 2016 workloads for the six workload activities -- initial claims weeks claimed nonmonetary determinations appeals subject employers and wage records -- were forecasted using statistical models developed by the Department s actuaries. Each state s estimated workload in each category was reduced by multiplying it by the ratio of the national total base 3 workload for that category to the estimated national total workload for the category i.e. each state receives funding for the same percentage of its estimated total workload in its base budget allocation. Additional funds are available on a quarterly basis for claims-related workloads processed above the base level. Determination of Allowable MPU Values. For FY 2016 the calculation using states unreduced MPU values from the RJM data collection yielded 18 640 workload staff years. To fit the targets within available funds the allocated MPU values were developed for the six base workload activities by reducing the MPU values for most states so that the number of targeted workload staff years equaled the 15 884.1 staff years for which funds are projected to be available. MPU reductions in each of the six activities were made as follows MPUs were arrayed from the highest to the lowest MPU value. The lowest ten MPU values were not reduced. Within each of the six workload categories the difference was calculated between each of the top 43 MPU values and the tenth lowest MPU. Differences were then reduced by a percentage determined by anticipated available resources and the result for each state was added back to the tenth lowest MPU to obtain the allocated MPU for each state. In general the higher the MPU the greater its reduction however reductions in MPUs for states with relatively smaller workloads were mitigated by up to 25 percent of what the reduction otherwise would have been. The percent of the mitigation was determined by the relationship of the state s workload to the largest workload among states being reduced. Non-Workload Staff Years Allocation Methodology. Staff years for non-workload functions are drawn from the FY 2014 data in the RJM data collection. Other than adjusting for any state supplemental funding no reduction was applied to BPC and UI Performs staff years. Support and AS T staff years were reduced by using the MPU reduction algorithm. The algorithm used the percentages that Support and AS T staff represented of each state s total requested staff. The ten states with the lowest percentages in each category were not reduced. In general the higher the percentage Support and or AS T staff represented of the total the larger the reduction in Support and or AS T staff years. In addition no state s Support staff years were reduced below the lesser of 15 staff years and the number of actual Support staff years used in FY 2014. b. Personnel Compensation Costs. The FY 2016 PS PB rates were determined by using each state s FY 2014 PS PB rate for each functional activity and increasing the result by 3 percent annually. As provided in P.L. 113-235 December 16 2014 Division i Title 1 section 105 and TEGL No. 05-06 no PS PB rates were permitted to exceed the latest enacted Executive Level II rate which is currently 183 300. See 4 http www.opm.gov policy-data-oversight pay-leave salaries-wages salary- tables pdf 2015 EX.pdf c. Non-Personal Services. The FY 2016 NPS allocation was based on an average of the states FY 2012 2013 and 2014 NPS expenditures reported in the RJM less any state supplemental NPS dollars and one-time expenditures. Before calculating the 3-year average the FY 2012 and FY 2013 expenditures were inflated to FY 2014 dollars by using the Gross Domestic Product deflators 1.6 percent in FY 2012 and 1.5 percent in FY 2013. The resulting 3-year average was then increased by 3 percent annually to arrive at the FY 2016 level which was reduced across-the-board so that the sum across all states equaled the NPS anticipated funding availability of 407 381 815. Attachment I shows a breakout of each states NPS base planning level. d. Hold-Harmless Provisions. There is one hold-harmless provision for the FY 2016 planning targets. Total Dollars. A stop-loss of 5 percent is imposed on states that would have lost more in total base dollars from FY 2015. This adjustment is shown on a separate line in Attachment I. e. Postage. For FY 2016 the Department will allocate 116 733 000 in base postage resources directly to states. The postage allocation methodology uses projected base weeks claimed and subject employer workloads which are totaled for each state base postage resources are then calculated pro rata based on each state s share of the total workload. Attachment III displays the state-level detail regarding this allocation. 8. General Guidelines for Above-Base Workload Resource Levels. The State Administration budget activity includes a reserve for above-base workloads. The Department will use the quarterly hours data on the UI-1 OMB Approval No. 1205- 0132 report the allocated claims activity staff years paid and the allocated annual MPU values in the FY 2016 above-base certification process. States should submit the UI-1 OMB Approval No. 1205-0132 report by October 1 2015 the annual hours on the report should agree with the annual work hours used for each state s FY 2016 target allocation. a. Above-Base Overhead. The above-base overhead percentage will remain at 19 percent. b. Above-Base Resources. Above-base resources are tied directly to above-base workloads. If above-base workloads decline less above-base funding will be made available to the state agencies. During periods of declining above-base resources adjustment to staffing levels may be necessary. c. Above-Base Instructions. General instructions for completing UI-3 OMB Approval No. 1205-0132 reports are in ET Handbook No. 336 Chapter II. Specific implementation procedures for the above-base certification process will be issued later this year in an 5 Unemployment Insurance Program Letter UIPL promulgating the final FY 2016 UI allocations. 9. Standard Form SF 424. All states should submit an SF-424 OMB Approval No. 4040- 0004 for FY 2016 base resources. Instructions for completing these forms are in ET Handbook No. 336 Chapter I. The forms are available in Portable Document Format PDF at http apply07.grants.gov apply FormsMenu select SF424 Family . When completing the form states should ensure that total UI dollars are the same as the allocated levels. Only states that vary the quarterly number of claims activity staff years paid should submit the SF- 424A OMB Approval No. 4040-0006 and show the quarterly distribution in item 23 Remarks of the form. All states should submit the SF-424B OMB Approval No. 4040- 0007 . 10. Bottom-Line Authority. All state UI administrative grant funds must be used in accordance with Section 303 a 8 of the Social Security Act and the cost principles contained in 2 CFR Part 200 and 2 CFR Part 2900. The allocation methodology is a detailed process that determines the funding level for each state however as provided in ETA Handbook No. 336 the assignment of resources by categories resulting from the methodology is not binding on state agencies management. Since FY 1987 states have had full authority to shift resources among UI program categories as they deem appropriate and necessary to manage their UI programs to meet established program goals and requirements. Thus states have the flexibility to move UI resources among UI program categories among quarters within a fiscal year and among specific cost categories. States are held accountable on a bottom-line basis giving states the discretion to use UI administrative resources to meet their assessment of needs and to meet UI performance requirements. The only exception to bottom-line authority is that states may not change the staff-year level in the claims activities category from the allocated staff-year level for purposes of computing above-base resources. This is to ensure that states do not earn more above-base resources than they would otherwise have been entitled to earn. Bottom-line authority does not apply to funding issued for special projects or supplemental budge requests funding for these purposes must be spent in accordance with the spending plans approved for these respective projects. 11. Nationally Funded Activities. As provided in the State Unemployment Insurance and Employment Service Operations appropriation the Department will on behalf of the states make payments to the entities operating the National Directory of New Hires and the State Information Data Exchange System for use by the states. 12. Action Requested. State Administrators are requested to a. Provide to the appropriate staff the FY 2016 planning targets and above instructions as soon as possible after receiving this UIPL. b. Review closely the attached tables and notify the appropriate regional office of any questions or concerns as soon as possible after receiving this UIPL but no later than September 15 2015. 6 c. Submit to the appropriate regional office as part of the SQSP the FY 2016 SF-424 OMB Approval No. 4040-0004 424A OMB Approval No. 4040-0006 if applicable and 424B OMB Approval No. 4040-0007 . d. Submit the FY 2016 UI-1 OMB Approval No. 1205-0132 report via the UI Required Reports system by October 1 2015. 13. Inquiries. Please direct questions to the appropriate regional office. 14. Attachments. I. FY 2016 Detailed State Base Staff Planning Levels II. Back-up Material for Allocation of FY 2016 UI Base Staff III. FY 2016 Base Postage Allocation 7