DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 13-91
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	DONALD J. KULICK Administrator for Regional Management
SUBJECT	:	Status of Unemployment Insurance (UI) Program Performance Measurement Review (PMR) Project

1. Purpose. To announce the resumption of the PMR project that will examine and improve mechanisms for measuring UI program performance of State employment security agencies (SESAs).

2. References. Federal Register Notice (54 FR 2238); Unemployment Insurance Program Letter (UIPL) No. 10-89.

3. Background. In the fall of 1988, the Employment and Training Administration (ETA), with contractor assistance, began a project to examine, evaluate and improve mechanisms for measuring SESA UI performance and to investigate the interrelationships and linkages between existing components of the UI oversight system. The objectives of the project are to:

   1. review the Secretary of Labor's legal responsibilities for overseeing the UI program;

   2. identify and justify alternative methods of evaluating SESA UI performance;

   3. identify gaps and overlaps in current systems that assess SESA performance;

   4. determine what constitutes a minimum level of performance, where appropriate; and

   5. examine linkages between components of the UI oversight program.

   ETA embarked on a 2-phased plan for achieving the objectives of this study. However, due to unanticipated administrative difficulties, the project was temporarily suspended in December 1989.

4. Initial Project Accomplishments. During the initial performance period of the project, the following achievements are noteworthy:

   1. Comments Solicited.  The Department of Labor (DOL) solicited comments on existing performance measures and suggestions for areas of study to be included in the project. The solicitations were requested by means of UIPL No. 10-89 dated January 4, 1989, and a Federal Register Notice dated January 19, 1989. Nineteen responses were received. All responses, except one, were from SESA officials. The remaining response was from the National Association of Unemployment Insurance Appellate Boards. Generally, most of the comments received were supportive of the PMR initiative.

   2. PMR Steering Committee.  This committee, consisting of Federal National Office (NO) and Regional Office (RO) staff, was established to provide guidance and expertise to the contractor in designing an improved performance measurement system and for accomplishing the overall objectives of the project. The committee met four times during the performance period under the initial contract.

   3. PMR State Expert Panel.  This panel was established by the contractor and consisted of 11 members who represented a wide array of SESA technical expertise and brought to the project the UI practitioner's view of the UI system. The purpose of the panel was to advise the contractor on matters of a technical nature and offer ideas for a modified or comprehensive performance measurement system. The panel met once during the performance period. The meeting focused on the panel assisting the contractor in determining the strengths and weaknesses of the existing performance review program and factors that seem to influence UI performance. The panel also furnished opinions on possible alternative approaches for performance measurement.

   4. Research.  During the period, activities of the contractor were mainly devoted to the following:

      1. A review of the laws and regulations pertaining to the UI system to identify SESA UI service requirements.

      2. An assessment of existing data collection and reporting systems to identify gaps and duplications and to assess the validity of the performance data currently available.

      3. A report of the history of the development of existing UI performance review programs within the UI service.

      4. An examination of performance measurement systems in other Federal agencies to identify innovative approaches that might have application in the UI system.

      5. Limited contractor recommendations for alternative approaches to performance measurement in the UI system for further consideration in the field test phase.

5. Project Plans. A decision was made to complete the project for improving UI performance measurement that had been started under the original contract. Reprocurement of contractor services through the open-competitive process concluded with a contract award to Macro Systems, Inc., on September 27, 1990.

   Plans call for the project to be divided into 3 separate phases. Phase I, which began October 1, 1990, will, generally, be devoted to the development of selected alternative approaches to performance measurements, consideration of how data might be used, and a comprehensive design for a field test. Tax and Cash Management, which are under separate review, will be integrated into the performance measurement system at a future date. Phase I will build on the previous project work done to date. Phase II will include field testing (as well as retesting, if necessary) of the selected alternative measures. Phase III will be a period of training, and ultimate implementation of the selected measures by SESAs.

6. Tasks Scheduled for Phase I. The contractor will have ultimate responsibility for performing all of the tasks that are included in the contract. Among the major tasks that the contractor will perform during Phase I are:

   1. Identification and justification of alternative measurements of SESA UI performance;

   2. Preparation of recommendations for alternative performance measurements to be tested for possible incorporation into the UI oversight system;

   3. Development of data definitions;

   4. Design of field test;

   5. Preparation of criteria to be used in selecting field test sites;

   6. Provision for automated data processing support, as needed, for all tasks under Phase I; and

   7. Reestablishment of a State Expert Panel and selection of additional SESA staff of Service Area Specialists to serve as an adjunct to the State Expert Panel.

7. Steering Committee. The Steering Committee that was formed under the former contract, will be maintained to review and comment on materials and reports developed by the contractor. Federal staff will also have final responsibility for determining which alternative measures of performance will be recommended to UIS management for acceptance and approval for the field test (Phase II).

8. State Expert Panel and Service Area Specialists. During Phase I, States will be encouraged to provide the contractor with advice on possible and proposed alternative performance measurements, as well as the usefulness of, and the problems with, current measures. This input will be provided primarily through SESA staff who comprise the State Expert Panel and Service Area Specialist group. In addition, all SESAs will have the opportunity to comment on various aspects of the project through issuance of a series of program letters and other announcements. In Phase II, SESAs will be asked to volunteer to participate in field testing the selected alternative performance measurements.

9. Action Required. SESA Administrators are requested to furnish contents of this UIPL to appropriate staff members. Any comments or suggestions are welcome and may be forwarded to your Regional Administrator.

10. Inquiries. Direct any questions to the appropriate RO.