ATTACHMENT II
CHANGE NOTES
ET HANDBOOK 407, 4TH EDITION
GLOBAL
Methods Surveys and references to surveys were removed.
References to terms: "State Employment Security Agency," (SESA) and "Benefits Quality Control," (BQC) were removed.
The Program Review Findings Chart has been updated, including an added column for responsibility code for processes performed outside the tax system or by an outside agency. "Posting" rows were removed from Status Determination sections.
GLOBAL ACCEPTANCE SAMPLES
The Acceptance Sample Instructions now state: "Select 60 cases, or if the universe is too small, select the number of cases based on the Table in Appendix A-III." This was done to make sure reviewers know that they can have less than 60 cases and to ensure consistency in application. These changes were made in Report Delinquency, Collections, Debit/Billings, and Credit/Refund chapters. (Made the verbiage consistent.)
CHAPTER I
The TPS Tutorial web site location was added as a reference (https://oui.doleta.gov/tps/).
CHAPTER II
The Verification Source instructions were added to the Systems to Assure Execution of Events section, along with information on how to check Verification Source when no program changes have been made in many years.
Language was added to advise states that if a tax unit elects to accept a risk each year, reviewers are not required to do a Systems Review every year, only to confirm such a situation. Reviewers can stay on a 3-year cycle, but need to grade this as a "Risk" until resolution.
An example of a situation where the Central Office has written procedures and the field does not was added. Reviewers were advised to answer "No" to such questions and to note the discrepancy in the Annual Report.
An example of tax systems with many physical locations was added, and reviewers were advised to visit each location one time during the 3-year cycle, if possible.
The Acceptance Sample Instructions were modified to reference three, instead of two instances where cases are replaced (e.g., Collections sampling - when a case was already reviewed and no new debt was since created).
Instructions were added on what to do if two or more cases have missing documents. Review can be ended (however, tax managers may want to know the extent of missing documentation) or the review can be continued to see how the tax unit is doing, based on findings from the balance of cases.
Instructions were added, regarding data entry when a case is removed, that results in less than 60 in the sample. If cases are not replaced because they should not be in the universe, the National Office should be contacted so that modifications can be made for the SUN system to allow data entry.
Explanations were added for when the Acceptance Sample is not required due to a waiver, and on modifying data entry to show that sampling was not overlooked.
Reference to the SIC code was removed.
Web links were provided for obtaining computed measures data.
A section was added to the description of internal controls, under Recording of Transactions and Events. It describes the need for source documents in connection with electronically transmitted data.
STATUS DETERMINATION
Systems Reviews:
A question was added under Systems to Assure Execution of Events, regarding the presence of controls to detect tax rate manipulation (SUTA Dumping).
Acceptance Sample Instructions:
An explanation was added that if at the time of the review, a successor case was incorrectly included in the universe, it should be removed, as per case replacement instructions in Chapter II of the Handbook.
Reference to "written" policy was removed so as not to restrict to only states that have policy in written format.
Acceptance Sample Questions:
Questions in accuracy and posting for all three Status Determination samples (New, Successor, and Inactivation) have been revised and simplified. The separate Posting sections have been removed with portions merged into the accuracy sections. Instructions state that simple errors in posting such as typographical errors should not fail a case.
COLLECTIONS
Computed Measures:
In the definition of Tax Due, the reference to lines 18, 19, and 20 of the ETA 2112 report was changed to lines 19, 20, and 21 in order to conform to the revised numbering scheme of the 2112 report.
Acceptance Sample Instructions:
Reimbursing employers were added to the universe.
Adjustments were made to the sampling universe. It will now consist of debt created within the past 2 calendar years, plus any debts that may have been created during the TPS review year. Reviewers need not go back further than two years.
A description was added that explains when the 30 day count begins, explains the reason for the 6 month lag, and indicates that rounding is acceptable.
A statement was added, explaining that even if full payment is received, TPS reviewers should continue to answer questions to ensure that subsequent actions were conducted properly.
The definition of most recent quarter of liability was added.
Instructions were added to indicate that if a previously reviewed case is selected (whether passed or failed), the reviewers are to replace it with another case, unless new debt has been created since last year's TPS snapshot date.
Acceptance Sample Questions:
Question No. 9 was modified to read: "…receive payments for the receivables OR ADJUSTMENTS TO THE RECEIVABLES under review?"
Question No. 9a, "If yes, were the receivables paid in full?" was eliminated. There was no need for this question.
Question No. 10 was modified to read: "If enforced collection action (including, BUT NOT LIMITED TO tax liens) was initiated, was that action properly RELEASED IN ACCORDANCE WITH POLICY AND PROCEDURES?" When just the word "payment" alone appeared in this statement, it was perceived that an action like a lien release upon any amount of payment could be considered a "correct” action. However, some operations have partial payment to reduce liens. Also, there are other collections actions besides liens: levies, distress warrants, etc. Rewording the question encompassed such actions.
In Question No. 10, the word "Note" was removed, so reviewers do not get the impression that entry of "NA" is only allowed when no lien is filed.
Question No. 11 was removed. Like other samples, if any evaluative questions fail, the case fails and so there was no need for this "wrap up" question.
REPORT DELINQUENCY
Systems Reviews:
Another example was added to the Systems Review section on Systems to Assure Execution of Events, Question No. 2: "Is there a method to confirm accuracy of the number of delinquent accounts identified (e.g., Total the number of employers that filed timely with the number of delinquency notices printed, and compare to the number of active employers on the same date)?"
Systems to Assure Execution of Events, Question No. 4 was split into 2 questions (Question No. 4 and
Question No. 5) as follows:
Question No. 4 - "Is there a method to suppress delinquency notices in cases of contested coverage?"
Question No. 5 - "Is there a method to suppress delinquency notices for accounts that have
unprocessed contribution reports in house?"
Acceptance Sample Questions:
Question No. 1 was modified to ask whether the employer’s account was properly identified as delinquent. Reference to "system" was removed to ensure that the focus is not on the system’s ability to establish accounts as delinquent, but rather on the proper identification of accounts as delinquent. By the time of the TPS review, it can be determined whether the employer was actually delinquent in submitting a report. Also, if the employer submitted a timely report, but the delinquency run identified the account as being delinquent, the case would fail. By the time the final delinquency list is generated, nearly all employers’ reports should have been accounted for.
Question No. 4: Liability date change(s) was added as a new option for the question, "Was the report delinquency resolved due to: …?"
FIELD AUDIT
Acceptance Sample Instructions:
Question No. 4 was clarified to allow state tolerance procedures to be factored into the evaluation of audits.
Question No. 9 was clarified to allow state tolerance procedures to be factored into audit evaluation, and to prevent deduction of points for non-material, typographical errors.
REPORT PROCESSING
Systems Reviews:
Systems to Assure Execution of Events was reworded to read: "… does the AUTOMATED system have a
check each time …?"
Sampling procedure No. 3 added the following. "Date of selection should be after the first quarter report delinquency notice run."
Instructions were modified to say that if no report has come in by the TPS review date, and the employer account was identified properly as delinquent, then the review can end. The question is evaluative because the TPS Report Delinquency universe may not capture all the delinquency scenarios. If a problem is discovered in the Account Maintenance function, but it does not gather enough attention, a potential problem in the identification of delinquent employers could be overlooked.
Acceptance Sample Questions:
The text: "Was a contribution report received for the account BY THE TPS REVIEW DATE?" was added to Question No. 1, so that if an employer’s report has come in by the time of TPS review, the rest of the questions should be answered. This will allow accuracy data to be captured (e.g., posting and rate).
The text "If yes, go to 3-5" was deleted from Question No. 1, so that if a delinquent report was received by the time of the TPS review, reviewers will have the opportunity to answer No. 2, which asks if the delinquency was properly determined.
Question No. 4, a new, non evaluative question was added: "Was the Contribution Report processed promptly according to policy and procedures?" This is to alert reviewers to the potential for "false" report delinquency notices being generated and sent to employers who are not delinquent. It also encourages prompt processing in order to prevent blocked claims. This new question does not ask about wage detail, however. The Benefit Accuracy Measure looks at this aspect to some extent. Earlier TPS Questions and Answers also indicated that wage detail should not be included in the review. To require TPS reviewers to locate wages, especially magnetic tapes, would be very cumbersome.
DEBITS/BILLINGS
Acceptance Sample Instructions:
The "Review Sample" portion had text added: "Assemble the following……facsimile of the original computed billing notice AND A COPY OF ANY PAYMENT HISTORY."
Acceptance Sample Questions:
Acceptance Sample Question No. 1 was modified and now asks whether a debit was established to the proper account. If the answer is "No", the case fails and the review ends. Reviewers do not have to check for posting accuracy to the wrong employer’s account. Posting accuracy is being examined in the Account Maintenance section. This new question is now similar to the Credits/Refunds section.
Acceptance Sample Question No. 3, asking whether the billing notice accurately reflects the quarter, has been removed. The accuracy of quarter debited is already asked in Question No. 1. Not all systems identify the particular quarter in the notice itself, and the system may not be able to recreate that actual notice.
CREDITS/REFUNDS
Acceptance Sample Instructions:
The erroneous text regarding sample size was removed. Now, the instructions say that if the sample size is less than 60, to see Appendix A-III-a-II.
Acceptance Sample Questions:
The following was added to Question No. 1: "Was credit established to proper employer account? If No, case fails and stop review."
Question No. 2b was modified to be consistent with Debit/Billings (the verbiage was changed from "Time frame" to "Quarter and Year").
BENEFIT CHARGE
Acceptance Sample Instructions:
The scope section was clarified to stress that the implementation of the decision, not its merits, should be examined. "Where a non monetary decision has been issued on the selected UI claim, the TPS review will focus on implementation of the decision as it affects charging of the selected employer. For instance, if a decision was made to charge the employer – was that employer charged? The decision itself or its merits will not be evaluated."
The documentation section was clarified to say that: "Documentation includes canned text, customized text or quit/separation decisions. Whatever contains information needed to ensure that benefit charges were carried out properly. Do not revisit the merits of the decision itself."
The section on "Draw Conclusions" has been modified to add "Accuracy of charge, non charge or credit…"
Acceptance Sample Questions:
The title was changed to "Accuracy of Charge."
References to "decision" were removed.
Acceptance Sample Question No. 2 added "or credit," and added "NA" as an option.
EXPERIENCE RATE
Acceptance Sample Instructions:
The date of the example was changed from CY 2001 to CY 2004.
An explanation was added that if the tax system passed the previous year’s Experience Rate, Contribution Report, and Benefit Charge samples; and if Contribution Report and Benefit Charge samples continue to pass the current year; then reviewers can skip the Experience Rate review for up to 3 years. However, reviewers must conduct the Experience Rate sample at least once every 4 years. If changes that could impact computations are made to the tax rating systems, then a review must be conducted.
The word "all" was removed from "the universe will be identified after ALL processing is completed…" to prevent waiting for non mainstream tax rates to be issued, such as, supplemental notice mailings.
The following text was added: "Reviewer will not evaluate the accuracy of the contribution report data, only the accurate compilation and computation of data."
GLOBAL SYSTEM REVIEWS
Electronic Data:
Global references to electronic data receipt and processing have been added to Recording of Transactions and Events.
The following text was added to all Introductions: "…WHETHER THE SYSTEM IS AUTOMATED OR MANUAL, an audit trail should lead from the wage, tax and payment data in the employer account record to the information source upon which the update was made." (This is an example from Credits/Refunds.)
Question No. 1 now asks if the system has a method to assure that credits posted to employer accounts can be traced to their source (EVEN IF SOURCE IS VIA ELECTRONIC MEDIA). (This was not added to Report Delinquency, Collections, or Benefit Charge sections.)
"F. Electronic Media" was added as an option to Question No. 4, "Which of the following source documents are used to identify the posting of credits?" (This was not added to Report Delinquency, Collections, Benefit Charge, or Tax Rate sections.)
Question No. 7 was altered to read: "Are original and amended information sources, including electronic source documents retained and accessible for use?" (This was not altered in Report Delinquency, Report Processing, or Debits/Billings sections.)
The following question was added to all Systems Reviews, except in the Report Delinquency section: "If procedures are automated, is a review performed every time a change is made?"
Training:
Question No. 5 (training new people regarding mission and goals), and Question No. 6 (someone assigned to evaluate training effectiveness) were removed.
Review of Work:
The requirement to list what percent of completed work is subject to review was removed.