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References: UIPL No. 10-96, Implementation of New Time Lapse and Quality Measures for Unemployment Insurance Benefits Operations. Background: New performance measures were developed and field tested through the Performance Review Project and approved by the Office of Management and Budget on September 1, 1995, for implementation on July 1, 1996. The new appeals and nonmonetary quality measures that will apply to decisions and determinations made during the quarter ending September 30, 1996, are different from the previous measures employed in the Quality Appraisal (QA) program. Likewise, there are significant changes in the new reporting requirements for appeals case aging and appeals and nonmonetary determination promptness. Consequently, SESA and Regional Office staff need to become familiar with these new measures and the analysis and use of the new data being collected to be able to successfully utilize them and to ensure that satisfactory performance, as measured by them, is achieved. Training Objectives: The training seminars will provide specific information about the new measures and their use, related required reports, and quality review methodology. This training is intended to prepare SESA and Regional Office staff for the first round of self-evaluations since the implementation of new measures for assessing the quality of Lower Authority Appeals and Nonmonetary Determinations. In addition, training will be provided on the analysis and use of the new data being collected by the Appeals Decision Promptness, and Appeals Case Aging measures. Three identical seminars for each group are planned so that about one third of the States can be accommodated at each session. An opportunity will be provided to ask questions about any difficulties that SESAs encountered in implementing the new Appeals and Nonmonetary Promptness measures and the Case Aging reporting requirements. Instruction will be provided for the analysis of data on quality, promptness and case aging, to aid in achieving the goal of continuous performance improvement. Participants: This training is designed for key appeals and nonmonetary determination personnel in the SESAs and Regional Offices, who have direct responsibility for appeals functions and the quality review of nonmonetary determinations. Seminar for Appeals Staff: One and one-half days of each appeals seminar will focus on the promptness and case aging measurements and is designed for appeals personnel who have direct responsibility for collecting and reporting that data. It will include training on the analysis and use of the data in managing the appellate process, in addition to answering questions that may have arisen in collecting and reporting of the new data. Two days will focus on training for supervisory hearing officers who will have responsibility for performing quality evaluations and ensuring satisfactory quality performance. Seminar for Nonmonetary Determination Staff: This will be a three and one half day seminar for those staff who have the responsibility for evaluating the quality of nonmonetary determinations. The training will focus on evaluating the quality of all nonmonetary determinations beyond those historically evaluated in the QA program and analysis of the outcomes. Issues subject to first level adjudications ranging from separations to profiling will be addressed. It is strongly recommended that SESAs select appeals and nonmonetary staff who will have responsibility for quality evaluations of appeals and nonmonetary determinations; and appeals staff, who have responsibility for the day-to-day performance of the tasks in the appeals unit that are necessary for satisfactory performance under the new measures and for producing, reporting, analyzing, and using the information required by them. Travel Funds: Funds will be provided for travel and per diem costs for SESA staff travel to this training. Each SESA will be provided funds for two of their nonmonetary determination staff and two of their appeals staff to attend this training. Seminar Locations and Dates: Three seminars are scheduled in August and September of 1996. The first seminar is scheduled in San Francisco for Tuesday, August 20 through Friday, August 23, to serve the SESAs in Regions 8 through 10. The second is scheduled in Washington, D.C. for Tuesday, September 10 through Friday, September 13, to serve the SESAs in Regions 1 through 4; and the third is scheduled in Kansas City, Missouri, for Tuesday, September 24 through Friday, September 27, to serve the SESAs in Regions 5 through 7. Each seminar will convene at 8:30 a.m. daily and will end at noon on Friday. SESAs should identify, as soon as possible, the staff who would attend these training seminars. Detailed information about hotel accommodations and meeting locations will be provided to the SESAs by their respective Regional Offices, sufficiently in advance of each seminar so that participants can make their travel plans. Action Required: SESAs are requested to do the following: SESA Administrators in Regions 8, 9, and 10 are requested to ensure that the estimated travel cost, name, title, mailing address, and phone number of each participant is received by their Regional Office by July 5, 1996. SESA Administrators in Regions 1, 2, 3, and 4 are requested to ensure that the estimated travel cost, name, title, mailing address, and phone number of each participant is received by their Regional Office by July 19, 1996. SESA Administrators in Regions 5, 6, and 7 are requested to ensure that the estimated travel cost, name, title, mailing address, and phone number of each participant is received by their Regional Office by August 2, 1996.

Average Weekly Benefit Amount (AWBA) Utilization: On May 11, 1995, the Department published an interim final rule in the Federal Register (60 FR 25560), which amended Section 625.6 effective for all major disasters declared on and af-ter that date. Among the changes, the amendments provide that the minimum weekly DUA amount will be 50 percent of the AWBA paid in the State for regular compensation, unless wor- kers are customarily or routinely employed less than full-time prior to their unemployment due to the disaster. The attached listing sets forth the 50 percent of AWBA computa-tion applicable for major disasters declared during the third quarter of FY 1996, from April 1 through June 30, 1996. Action Required: SESA Administrators are requested to provide this information to appropriate staff and insure that the correct AWBA is utilized in determining the weekly DUA amount.

References: 20 CFR 602; Federal Register Notice, September 3, 1987, 52 FR 33520; 20 CFR 602; Federal Register Notice, March 26, 1990, 54 FR 11112; UIPL 13-93, January 12, 1993; UIPL 41-95, August 21, 1995; and Benefits Quality Control State Operations Handbook, ET Handbook No. 395. Background: The final rule to establish the Unemployment Insurance Quality Control program is found at 20 CFR Part 602. Effective October 5, 1987, QC programs in the 50 States, the District of Columbia, and Puerto Rico have selected weekly random samples of UI benefit payments for investigation under the mandatory program. 20 CFR 602.21(g) provides that each State shall: Release the results of the QC program at the same time each year, providing calendar year results using a standardized format to present the data as prescribed by the Department; States will have the opportunity to release this information prior to any release by the Department. The notice of procedures for the release of BQC data for the UI program was published in the Federal Register on March 26, 1990, at 54 FR 11112. Beginning in 1993, a team of senior State Employment Security Agency (SESA) managers and Unemployment Insurance Service (UIS) staff known as the Performance Enhancement Workgroup (PEWG) developed the outlines of a comprehensive new closed-loop system for helping ensure continuous improvement in UI operational performance. UIPL 41-95, issued August 21, 1995, described this new system, called UI Performs, and solicited comments from SESAs. The UI Performs design is now being refined in light of SESAs' responses to UIPL 41-95. The new system will be phased in over 3-4 years as the various components are completed. When complete and fully operational, UI Performs will comprise a renewed affirmation of long-standing principles for Federal-State cooperation; a redesigned process for operational planning and the execution of improvement activities; various mechanisms to ensure that performance in key areas at least exceeds certain minimum levels; and the redesign of many performance measurements plus the regular validation of key performance measures. The measures were selected to enable the UI system's success to be judged by how well it serves its ultimate customers--claimants and employers. Most of the data used to construct existing and new UI Performs measures are already in State databases; UI Performs should not appreciably increase overall measurement effort. The measurement redesign aspect embraces the results of three initiatives which predated UI Performs: Revenue Quality Control, which developed new measures for tax performance to replace those previously gathered under the Quality Appraisal (QA) system; the Performance Measurement Review (PMR) project, which updated QA benefit payment timeliness and quality measures; and data validation. The team designing UI Performs also proposed changes in the Benefits Quality Control (BQC) system for measuring benefit payment accuracy, including the assessment of the accuracy of decisions to deny eligibility. Two proposals for changing BQC have already been accepted: the name change to Benefit Accuracy Measurement (BAM) and dropping the requirement that States publicly release their data. Under 20 CFR 602.21 (g) and 602.22, the Department has determined that public release of data by the States is no longer considered necessary for the proper and efficient administration of State law. Therefore, the Department will no longer require States to publicly release the data. While the Department will continue to publish an annual compendium of all States' data, each State will determine whether they will independently make a public release of their data. Whether data are publicly released or not, States must continue to follow the reporting requirements described below. Date of Record: The Department has established close of business (c.o.b.) April 29, 1996, as the date of record for State data bases for computation of the error rates for the CY 1995 Annual Report of BAM data. All information in the Annual Report will be based on CY 1995 BAM cases that have been signed off by the QC supervisor by c.o.b. April 29, 1996. States must not reopen any CY 1995 BAM cases after this date until they have reviewed the computations of the error rates and have reconciled any differences between the State and National databases. Any data analysis supporting the Annual Report must be run on the database as it exists at c.o.b. on April 29. If States make any further changes, their data and results will differ from the data and results of the National Office. These differences will then have to be reconciled. Annual Report Software: As described in UIPL 13-93, the software which produces the Annual Report excludes Emergency Unemployment Compensation (EUC) program eligibility option cases from the rates calculations. It also excludes cases which do not meet the definition of the BAM population, for example, interstate or supplemental payments. These cases are coded "9" in data element c1. The software adjusts the population dollars paid to exclude any EUC and code "9" cases. In CY 1995, there were no EUC cases in any State database. An explanation of the CY 1995 footnotes can be found in Attachment 1, pages 2 and 3. For cases with a reopen code of "3" (the State has changed the data in a previously closed case), the reopen date is used in computing the time lapse and determining the appropriateness of footnotes concerning time lapse requirements. The States may run the Annual Report software as soon as all cases are completed. The National Office will produce an Annual Report for each State, based on the CY 1995 BAM cases as of c.o.b. April 29, 1996. Annual Report Format: The Annual Report format is shown in Attachment 1. It is divided into three main sections. Quality Control Data Total Dollars Paid in Population Total UI benefits paid to the population of UI claimants who comprise the sampling frames for all weeks in CY 1995 for which the State pulled a BAM sample, adjusted to exclude EUC program eligibility option cases and other UI payments that do not meet the definition of the BAM population. Sample Size Total UI payments selected during CY 1995 (BAM batches 9501 through 9552) and completed (supervisor sign-off) c.o.b. April 29, 1996, excluding cases that do not meet the BAM population definition. This is the number of BAM sample cases from which the rates and sampling errors (confidence intervals) are estimated. Proper Payments The weighted ratio estimate of total dollars properly paid to total dollars paid expressed as a percentage. Overpayments The weighted ratio estimate of total dollars overpaid to total dollars paid expressed as a percentage. Underpayments The weighted ratio estimate of total dollars underpaid to total dollars paid expressed as a percentage. 95 percent Confidence Interval A confidence interval, expressed as +/- a percentage, will be constructed for each of the three estimated rates. The actual rate is expected to lie within 95 percent of the intervals constructed from repeated samples of the same size and selected in the same manner as the BAM sample. Footnotes The footnotes that will appear on State BAM Annual Reports to describe certain conditions that affect the data are described in Attachment 1, pages 2 and 3. Narrative States are invited to supply a narrative analysis that will accompany their Annual Report. The Department will include this narrative in the digest of State Annual Reports that it will prepare (see section 10, below). The narrative may include, but is not limited to, a discussion of State laws and how they affect error rates, an explanation of circumstances that led to some degree of inaccuracy in the reported error rates, and proposed or actual corrective action strategies. State narratives must be received in the National Office no later than June 10, 1996. States not planning to submit a narrative should notify the National Office by June 10, 1996, that no narrative will be submitted. The procedures for preparing and transmitting the Annual Report narrative to the National Office are described in Attachment 2. Supplemental Data: In order for the SESAs to interpret the data in the Annual Report and provide narrative explanations of the data, the Department recognizes the need for additional information on cause and responsibility. The software that produces the BAM Annual Report will also generate a separate report consisting of up to 16 responsibility categories and up to 6 cause categories. Responsibility and cause data will be reported as percentages of UI dollars overpaid. States can combine categories which contain few sample cases, where appropriate. No sampling errors will be computed. States should be aware that some of these percentages are based on small numbers of BAM sample cases and may have relatively large sampling errors. If cause and responsibility percentages do not add up to 100 percent, States should check for cases in which the key week amount overpaid coded in data element h5 does not equal the sum of dollars overpaid coded in data element "ei1" for key week actions 10, 11, 12, 13, and 15. The amount overpaid cannot exceed the amount paid coded in data element f13. The Department may publish this and other data in the technical appendix along with additional analysis, where appropriate. The format for this report is shown in Attachment 3. Comment Period: BAM Annual Reports produced by the Department of Labor will be transmitted to each State on May 10, 1996. Each State should review its Annual Report and if there are any comments submit them to the National Office (Attn: TEUQS, Andy Spisak) with a copy to the Regional Office by May 31, 1996. SESA comments will be discussed and reconciled by June 10, 1996. Public Release by SESA: As discussed above, States are no longer required to release their annual data. The Department, however, will continue to release a compendium of all States' data. States should provide the data to interested parties upon request. Federal Release of Data: The Department will announce the availability of BAM program data for CY 1995 through a notice published in the Federal Register on or about July 31, 1996. The Department's publication will be a digest prefaced by background information on the Benefit Accuracy Measurement program, and a brief discussion of how the error rate estimates are computed. Readers will be discouraged from comparing results among States. Each State's section, including its Annual Report and narrative, will be displayed separately. State sections will be ordered alphabetically to discourage ranking and comparisons. The name of the State official designated by the State as its Annual Report contact will also be published. For CY 1995, the Department will continue the practice begun with CY 1989 data of publishing certain analytical information on aspects of the BAM findings. If the Department determines that a State has failed to follow the prescribed methodology -- regarding sample selection, data collection methodology, or case completion timeliness -- to such an extent that the data are not reliable, the Department will publish an explanation of the major deficiency in lieu of an Annual Report for that State. Also in accordance with instructions in the Program and Budget Plan, ET Handbook No. 336 (11th edition, change 2), States will be required to address these areas by submitting corrective action plans for the upcoming fiscal year. Key Dates: The following is a summary of key dates for the public release of CY 1995 BAM data. 4/19--States submit any request for waiver of time lapse requirements, along with supporting analysis, to the appropriate Department of Labor ETA Regional Administrator. by 4/29--States check BAM databases and resolve any database problems. 4/29--Date of record for State BAM databases, for CY 1995 Annual Report purposes. Cases closed by supervisors after this date will NOT be included in the Annual Report. States should not reopen any CY 1995 cases to change the database after this date until their Annual Report is finalized. 4/29--Department of Labor electronically transmits the modified Annual Report software and footnote look-up table to each State's Sun computer. 5/10--Department of Labor sends Annual Reports to the State Administrators over signature of Mary Ann Wyrsch, Director, UIS. 5/13-5/31--States review Annual Reports, including footnotes, and provide comments via their Regional Office by 5/31 to Department of Labor National Office. 6/3-6/10--Department of Labor and States discuss and reconcile comments in collaboration with Department of Labor Regional Offices. 6/10--States provide name, address, and phone number of contact persons to appropriate Department of Labor ETA Regional Administrator. States provide narratives or notice of waiver of narrative comments to Department of Labor National Office via the Regional Office. 7/31--Department of Labor publishes notice in the Federal Register announcing the availability of BAM data. Action Required: State Administrators are requested to: provide copies of these guidelines to the appropriate staff; ensure that Annual Report narrative comments or notice of waiver of such comments is transmitted to the Department of Labor National Office via the Regional Office by c.o.b. June 10, 1996; and ensure that the following items are supplied to ETA Regional Administrators: any request for a waiver of time lapse requirements by c.o.b. April 19, 1996; and the name, location, and telephone number of a contact person to whom interested parties may write or call with questions or inquiries about the State's BAM data by c.o.b. June 10, 1996.

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Background: All States are required to use a common set of administrative rules in administering Federal grants for their UI Programs. Because States are changing some of their methods for providing services to the public, including the development of systems for One-Stop Career Centers, the Department of Labor/UIS is issuing this UIPL to ensure an understanding of the existing administrative rules applicable to those grants including those governing such activities as the allocation of costs and audit requirements. This UIPL provides a brief summary of each applicable administrative rule. 29 CFR Part 97 - Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, ("Common Rule") - Attachment I The Departmental requirements applicable to Federal grants and cooperative agreements with governmental entities (State, local, and/or Indian Tribal) are codified at 29 CFR Part 97. These regulations are sometimes referred to as "the Part 97 regulations" and sometimes as "the common rule". The term "common rule" is used because all Federal agencies that administer Federal grants with governmental entities were required to adopt and publish the same set of regulations in 1988. Therefore, a grantee uses the same set of administrative rules in administering all Federal grants regardless of which Federal agency actually provided the grant. Each Federal agency codified the same set of rules (regulations), each in its own portion of the Federal Register. The Department's regulations are found at 29 CFR Part 97. These regulations, coupled with the UI Program Budget Plan (PBP), are the cornerstone of the UI Program's Federal grant management requirements. Sections of the regulation pertinent to the UI program are: 97.3 Definitions. This section defines the terms used throughout 29 CFR Part 97. 97.5 Effect on other issuances. This section indicates that all other grants administration provisions of codified program regulations which are inconsistent with Part 97 are superseded, except to the extent required by statute, or authorized in accordance with the exception provision in 97.6. 97.6 Additions and exceptions. This section sets out the circumstances under which additions and exceptions may be made to administrative requirements covered by Part 97. 97.20 Standards for financial management systems. Only paragraphs (a) and (c) apply to State grantees, including SESAs administering the UI program. Paragraph (a) basically provides that State grantees shall account for Federal grant funds in accordance with State laws and procedures for accounting for State funds, except that procedures must be in place to permit 1) preparation ofrequired Federal reports and 2) tracing of expenditures to document that funds were used for allowable UI purposes. 97.21 Payments. Paragraph (b) of this provision requires adherence to the U.S. Treasury regulations at 31 CFR Part 205, which implement the requirements of the Cash Management Improvement Act (CMIA). 97.22 Allowable costs. Paragraph (b) of this provision requires UI grantees to adhere to Office of Management and Budget (OMB) Circular A-87 (attachment 2 of this UIPL) in determining costs chargeable to UI grant funds. 97.23 Period of availability of funds. This section, coupled with Federal appropriation language, establishes the "life" of UI administrative funds. As long as DOL continues to specify five quarters for obligating UI funds, then UI grantees have 15 months from the beginning of a fiscal year to obligate the funds and an additional 90 days (quarter) to liquidate any outstanding obligations (see definitions section for "unliquidated obligations"). No expenditures may be incurred or recorded after the sixth quarter unless approval is obtained from the ETA grant officer. UI grantees have 36 months from the beginning of a fiscal year to obligate funds for automation acquisitions (as defined in the PBP) and an additional 90 days to liquidate any outstanding automation obligations. 97.25 Program income. This section defines what is program income, what is not program income, and the allowable uses of program income. 97.26 Non-Federal audit. This section requires grantees and subgrantees to obtain audits in accordance with the Single Audit Act and Departmental regulations that implement the Single Audit Act. These regulations are codified at 29 CFR Part 96 (attachment III to this UIPL). 97.31 Real property. (The definition of real property is found in section 97.3.) This section provides for the use and disposition of real property acquired with UI grant funds. It does not address the allowability of costs incurred for such acquisitions. That subject is covered in OMB Circular A-87. 97.32 Equipment. (The definition of equipment is found in section 97.3.) This section provides for the use, management, and disposition of equipment acquired with UI grant funds. It does not address the allowability of costs incurred for such acquisitions. That subject is covered in OMB Circular A-87. More specifically, paragraph (b) of this section establishes that State grantees, e.g., SESAs administering the UI program, shall follow State laws and procedures for the use, management, and disposition of equipment acquired with grant funds. State grantees are not required to abide by paragraphs (c), (d), and (e) of this section (unless their own State rules require it). The only other provisions of this section that apply to State grantees are paragraphs (f), Federal equipment, and (g) Right to transfer title. 97.36 Procurement. Only paragraph (a) of this section, which provides that State grantees shall follow State procurement rules, applies to State grantees. The rest of this section is not applicable to States. 97.41 Financial reporting. This section requires submission of both an SF-269 and SF-272 report. 97.42 Record retention. This section sets forth the retention and access requirements for financial and programmatic records to be maintained by grantees and subgrantees. 97.50 Closeout. This explains the closeout procedures after the grant requirements are complete. OMB Circular A-87 - Attachment II This version of OMB Circular A-87 published in the Federal Register on May 17, 1995 replaced the 1981 version. The Circular consists of five Attachments, transmitted by a short cover memorandum from the Director of OMB to the Federal department heads. Circular A-87 is incorporated by reference in 29 CFR 97.22 and thereby governs the allowability of costs incurred for UI grants. Items pertinent to UI grant recipients are: Attachment A contains the general principles for determining allowable costs (costs chargeable to Federal grants). Paragraphs A.2. and C. contain the crucial generic guidelines. Paragraph C.3., for example, contains the basic principles on allocable costs/cost allocation. These principles are rooted in a statute originally enacted in 1809 (2 Stat. 535) which specifies that "Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law." Simply stated, public funds may be used only for the purpose or purposes for which they were appropriated by Congress. Attachment B contains treatment for 42 selected items of costs. For each selected item, Attachment B describes whether it is allowable or not and, if allowable, guidelines on conditions or the extent of allowability, any documentation requirements, and any prior approval requirements applicable to the cost item. UI grant recipients should particularly review paragraph 11., Compensation for personnel services, especially subparagraph 11.h., Support of salaries and wages. Another attachment B paragraph of particular interest to UI grant recipients is paragraph 19, Equipment and other capital expenditures, which addresses the allowability of charging the acquisition cost of such assets as a direct cost to a Federal grant. Subparagraph 19c authorizes Federal agencies, at their option, to waive or delegate the Federal agency approval requirement. Attachment C contains the requirements for submission of the Statewide Central Services Cost Allocation Plan, which must be approved by HHS. Attachment D is not applicable to the UI grant. Attachment E contains the requirements for submission of the Indirect Cost Rate Proposal of the program agency or Department that administers the UI program. Paragraph F.3. was included in this Circular at the Department's request to cover the accounting system/cost allocation approval process that the Department has used for several years with a number of SESAs. It should be noted that General Administration Letter (GAL) No. 4-91 requires States to submit proposals for allocation of the cost of assessing and collecting non-UI or mixed-use taxes with the SESAs' Indirect Cost Proposals. Cost allocation, as it applies to One Stop Career Centers, is also addressed in a Training Assistance Guide (TAG). ETA developed the TAG to provide guidance to the States in developing a cost allocation system within a program environment where several organizations are coordinating or integrating their separately managed programs into a seamless delivery system. The TAG will be tested on a pilot basis in designated States, then the Department will evaluate the results of the pilot. The TAG does not replace or supersede the principles in OMB Circular A-87. 29 CFR Part 96 Audit requirements - Attachment III Audit requirements applicable to UI grant funds are codified at 29 CFR Part 96. The key section is 96.102, which requires audits to be conducted in accordance with OMB Circular A-128, which is attached to the regulations as Appendix A. While most of that Circular pertains to the non-Federal audit that each State conducts annually, paragraph 10 of the Circular addresses the right of Federal agencies to conduct Federal audits. UI Program and Budget Plan (PBP): The PBP is the grant agreement between the State and the Employment and Training Administration, and is a crucial part of the grant process and the attached documents. The Assurances section of the PBP requires the State to administer the UI program in accordance with the attached documents and also provides direction, relief, waivers, etc., within the authorities granted to ETA by the 29 CFR Part 97 regulations and OMB Circular A-87. For example, the PBP delegates the Federal approval requirement for equipment acquisition to the SESA administrator.

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