Questions and Answers Pertaining to Unemployment Insurance Data Validation (UIDV) Issues
a. Question: Cases occur where the designation of "final payment" is determined based on claim status, and then additional wages are added to the claim resulting in an extension of the entitlement period (monetary redetermination). Is the count for original "final payment" valid?
Answer: Yes, the claim met all conditions for final payment at the time the designation was assigned.
b. Question: How long should states keep records pertaining to completed validation studies?
Answer: In accordance with established audit policy, the records should be kept for three years.
c. Question: A situation occurs in certain states where an individual is claiming payments in a continued claim series when the status of the monetary determination is pending. Should these weeks be counted as weeks claimed? A related issue is determining whether weeks claimed should be counted when a pending monetary determination precludes a consideration about whether excessive earnings are being reported which would invalidate the "weeks claimed" count.
Answer: To be counted, weeks claimed must be associated with a monetarily valid claim (Handbook 401 re: 5159 Report, "Exclude weeks of which . . . the claimant is monetarily ineligible"). Weeks claimed with reference to a monetarily valid claim awaiting a monetary redetermination should be counted. Step 11 of Module 3 of the UI DV Benefits Handbook contains details for determining whether a claim is valid by checking the potential eligibility of the claim.
Cases where a claimant in continued claim status is reporting wages which may invalidate the count depending on a pending monetary are extremely rare. The ±2 percent error tolerance for validation was designed to prevent such cases from causing states to fail validation and we anticipate that it should cover these.
d. Question: States with provisions for partial disqualification have encountered situations where the claimant received a final payment under a claim but the claimant had access only to a portion of the state's maximum benefit entitlement based on the monetary determination. The claimant receives the maximum benefit payment to which he is entitled, but not the maximum which would have been available absent the disqualification. Should this final payment be classified as "final payment for maximum duration" on the ETA 218 Report?
Answer: For purposes of the 218 Report, maximum duration is defined by the monetary determination. All claimants whose monetary determination entitles them to the state's maximum duration would be reported on the 218 Report as qualifying for maximum potential duration [cell 28 (c28) and perhaps c6].
Claimants who only have access to a portion of their entitlement as defined by the monetary determination due to a penalty, and receive all the payments they have access to, should be reported on the 5159 (c26, c27, or c28) as having received a "final payment." They should not be included in the 218 Report as "Number at Maximum Duration" (c35) because they did not exhaust eligibility at the state’s maximum based on the monetary determination.
e. Question: Reporting instructions refer to a final payment of zero as indicative of claim exhaustion. This presents difficulties when state policy allows for situations where a balance exists but is not available to the claimant because of a disqualification. How are final payments identified?
Answer: Claim exhaustion, or the receipt of a final payment, is consistently defined in both the validation handbook and the Handbook 401 definitions for the ETA 5159 and 218 Reports. State reporting procedures may use "final payment of zero" or "final balance of zero" as a proxy for exhaustion but these must be harmonized with the common definition of final payment. See, for example, Handbook 401, page 1-2-6 (ETA 5159).
f. Question: Some states have provisions for claimants to draw benefits through the UI program while pursuing self-employment. How should these claims be counted?
Answer: Self-employment records should be included in two extracts: 1) the data set including the records for the program type (UI, UCFE, etc.), and 2) the extract for self-employment counts. This is similar to the manner in which Combined Wage Claim payments are handled.
g. Question: Some states use the "processing" date for new claims instead of the "claim-filed" date. Is this an issue?
Answer: "Processing date" and "claim-filed" date are accepted as being synonymous in this context. Claim processing is initiated when the transaction is first submitted to the state's mainframe computer. Thus the time of the two events is actually the same.
h. Question: Current versions of DV software consider any week(s) of claim duration in excess of the 25th week as being "maximum duration" on the assumption that 26 weeks of benefit entitlement always equals maximum duration. How should claims for more than 26 weeks be handled with reference to the identification of maximum duration?
Answer: Some states establish claims for greater than 26 weeks of potential benefits. The current DV software is not sensitive to this situation and identifies claims for 26 weeks as being for maximum duration. If the DV results are distorted by this situation, include an explanation in the Comments section of the summary report.
i. Question: The time requirement for the issuance of non-monetary determinations (nonmons) is a key performance indicator. States have different methods of recording the dates used for this calculation. How can procedures be standardized to assure that states are in compliance?
Answer: The UI DV benefits Population 5 record layout requires that dates be provided for issue "Detection date" and "Notice date." These terms are defined in Handbook 401 and the validation handbook; and the validation handbook was changed during spring 2003 to make it consistent with Handbook 401 on the matter of detection date for states whose law or policy requires a week to be claimed for a nonmon to be valid. All states must report the data for this measure in accordance with these instructions.
j. Question: Benefit overpayments reported on the 227 Report should be included in the "dropped" category on the report when they are no longer in active status. How is it determined when overpayments should be categorized as "dropped"?
Answer: For reporting purposes, overpayments should be classified as "D" (dropped) when the overpayment has been reported for nine or more quarters and was in active collection in the prior quarter but has been removed from active collection status during the report quarter. These criteria are only for reporting purposes, and do not affect how long state law or policy requires them to keep overpayments "on the books."
k. Question: The DV software automatically eliminates duplicate records when deriving counts for summary validation. The criteria used by the software to detect duplicate records sometimes result in the identification of records as being duplicate when, in fact, they are not. How can states cope with the situation when records are erroneously identified as duplicate and eliminated from the data set resulting in failure for a given population?
Answer: The criteria built into the software consistently apply federal requirements. These identify "true" duplicate records in most states but are too simple to address all situations in all states. Instances exist where records appear to be duplicates when, under unique state procedures and processing conventions, they are legitimately reportable cases. For example, the software identifies as duplicates multiple initial claims filed by the same claimant (same Social Security Number) in the same quarter. Some states, however, do permit more than one claim to be filed when no valid claim establishing a benefit year has already been filed. These are legitimate claims, reportable on the ETA 218 and 5159 reports, as long as they result in an appealable monetary determination. Based on our discussions with state staff, it appears that such cases are relatively infrequent, and the ±2% validity standard will easily accommodate them. Thus, it did not seem advisable to introduce the additional complexity into the extract files and the software needed to determine they are legitimate claims. States should note the number of such cases in the Comments field and explain why they are legitimately reportable cases. If it should happen that they exceed the ±2% threshold, the comments will serve both as an explanation and as a guide for the design of future versions in the software.
a. Question: The "number of liable quarters" is defined as the "the number of quarters between the date the employer last became active . . . ." This implies that the count of quarters should start over again when the account is reactivated. How is employer status established?
Answer: The Tax Population One extract file in the current version of the tax software includes a data element for "reactivation process date." The number of quarters that a given employer is in active status can be established using this element in combination with quarterly wage file extract data. The criteria for the identification of active employers uses data from Tax Population One as explained on page A-4 in the UI Tax Data Validation Handbook.
b. Question: The count of new employers required for item 14 on the ETA-581 Report is susceptible to state-specific definitions and administrative procedures. Some states assign account numbers to potential employers before they actually establish a payroll. The DV software rejects employers for whom no records indicating wages paid by that employer were submitted. How can the validation methodology be reconciled with state policy in this regard?
Answer: ETA-581 reporting instructions specify that potential employers who have not actually met a specific threshold or condition of liability contained in a state's unemployment compensation law do not meet the definition of "employers" and should not be included in the count of new employers until wages paid data indicate that they are "liable employers."
c. Question: Items 53 through 58 on the ETA-581 Report pertain to audit data for under- and over-reported wages and contributions. Should these amounts be "netted" with only the net results reported?
Answer: No. The under- and over-reported amounts should be reported separately for each quarter. Reporting the amounts separately provides information about how accurately employers are reporting wage information.
d. Question: Some states do not require reimbursable employers to report wages to the UI agency. Claims filed against these employers require that wage information be obtained by request. Because there is no record of wages paid during preceding quarters, the DV software does not identify these employers as "active". How can this discrepancy be dealt with?
Answer: One criterion for "active employer" status for data validation is evidence of wages paid. States (such as Delaware) that do not require reimbursing employers to report wage records should describe the situation in the comments section of the summary report. RO coordinators will review comments when deciding when to impose CAPs in response to specific DV issues.
e. Question: Category 201 on the ETA-581 Report requires states to identify the number of employer accounts which have been "resolved" through obtaining a report, determining non-liability for taxes, or issuing an assessment. According to ETA 581 definitions, reports can only be resolved by assessments if the assessments are "final." State procedures vary considerably on this matter; some consider a report resolved when they issue an assessment that is legally binding, even though it is not a "final assessment" because the appeal period is not exhausted. Others only classify the account as "resolved" when the final assessment is issued. These different interpretations of when an account is resolved by assessment can affect how long it takes to resolve reports and thus distort the information provided in the "resolved reports" category of the ETA-581 Report. How can this apparent distortion be avoided?
Handbook 401 defines a Resolved Report as, "A contribution report which has been received or resolved by a final assessment of tax that is legally due and collectible or by a determination of non-liability." Unfortunately, "legally due and collectible" and "final assessment" do not mean the same thing in all states. Many states consider an assessment "legally due and collectible" when it is issued; it becomes "final" only when the employer's opportunity to appeal the formal legal notice of the amount of the unpaid contributions has expired. In deciding when a report is resolved for ETA 581 purposes, states should be guided by the two elements that normally make up a Final Assessment. These are: first, that the employer's appeal period must have passed; and second, that the tax must be "legally due and collectible." States should therefore use the date on which the assessment has satisfied these two elements to indicate when a report is resolved.
a. Question: How are states to submit validation reports to the NO and ROs?
Answer: Tax Version 1.5 and Benefits Version 1.6 of the software contain an export function that allows the results to be exported as a text file. E-mail these results to the NO to email@example.com with a copy to the appropriate RO DV coordinator. Whenever possible, obtain results from these versions and send the text files; they can be input directly into the Access®database the NO will use to store and retrieve UI DV results. For Tax Version 1.4 and earlier, and Benefits Versions 1.5 and earlier, use the Excel® Spreadsheet export option and e-mail to the NO (using the above address) with copy to the RO coordinator. Sending results in hard copy (e.g., using the .pdf option) is acceptable but is discouraged because the results must be hand-entered into the database, increasing the time for data entry and the risk of error.
b. Question: What kind of CAPs will be required for UI DV activities during FY 2004 and 2005?
Answer: For the FY 2004 SQSP, CAPs were required only for incomplete implementation in FY 2003, i.e., a state did not implement UI DV at all, or did not complete one or more populations. (Although no CAPs will be required for populations that failed quantity or quality validation, states will be expected to remedy reporting problems in preparing for the re-validation within a year.) For the FY 2005 SQSP, CAPs will be required for any populations that remain incomplete. In addition, CAPs will be required for populations or sub-populations that failed the quantity or quality validation criteria in FY 2004.
c. Question: When will a state be required to conduct a Workload Validation (WV)?
Answer: The Department's overriding concern is to implement UI DV as quickly as feasible, and thus the basic principle we have applied in deciding whether states should conduct WV, or receive a waiver, is whether doing WV will divert resources from UI DV and thus delay its implementation. Unless UI DV will not be implemented for a significant time--approximately a year or more--after the initial reporting deadline of September 30, 2003, we would be inclined to waive WV so that efforts can be concentrated on UI DV. This decision will be based on the recommendation of the RO coordinator. The request for a waiver should be in a formal letter to the Regional Administrator citing the reason(s) for the waiver.
d. Question: When reporting errors are found in the course of validation, how far back should reports be revised?
Answer: It would be useful to revise reports as far back as can be done at reasonable cost so that analyses and projections which rely on this data will be accurate. Because actuarial projections--e.g., of the number of nonmonetary determinations used as workload items--are usually based on data over time (time series), accurate time series data help produce accurate projections. However, costs of making retroactive changes can often be high. Consult with RO or NO staff regarding the importance of making retroactive changes to specific data series.
e. Question: How will DV results affect the interpretation of performance results and the size of administrative allocations?
Answer: Policy regarding how DV results will be used in the calculation of funding allocations and the calculation and interpretation of UI PERFORMS and GPRA performance measurements, and when the Department will begin using DV results for these purposes, is under development. This issue will be addressed in a subsequent advisory.
f. Question: How can validation be accomplished in cases where a state generates Federal reports from a cumulative detailed record file which is incremented on a daily, weekly, or monthly basis?
Answer: As explained in the Data Validation Handbook, the DV methodology assumes that report extract files can be constructed to replicate reported numbers. The approach described above does not lend itself to this methodology because the record file may not contain the actual set of records used to generate the report (e.g., the file may simply contain an incremented count of certain transactions). If a state produces some or all of their Federal report elements in this way, validation will consist of an independent count as described in the Handbook (e.g., UI Tax Data Validation Handbook, Appendix B). RO coordinators should be notified of the situation and provisions made to transmit the validation documentation to the NO.
g. Question: States sometimes discover through the DV process that data gathered for a Federal report is incorrect or incomplete. Even if the state has a commitment to correcting the problem it has no way of preparing correct and/or complete report information until the problem is diagnosed and corrected. Should the state provide report data even if it knows that it is not correct?
Answer: States should never knowingly provide incorrect or incomplete report data. If the status of the data is suspect, this information should be provided in the comments section of the report and subsequently corrected. Cells for which data are questionable should not be left blank. ET Handbook 401, 3rd Edition, Introduction and General Reporting Instructions states, "For six regular program workload reports (ETA 5159, ETA 5130, ETA 218, ETA 207, ETA 581, and ETA 586) any values not filled in will prevent the report from being transmitted to the National Office. Incomplete reports are not acceptable. For non-workload reports or for workload reports other than regular versions, cells not filled in are assumed to be zero and are automatically zero filled when left blank."