Employment and Training Administration
Washington, D. C. 20213






January 24, 1986




January 31, 1987











Acting Administrator
for Regional Management




Unemployment Insurance (UI) Quality Control (QC) Redesign Status


  1. Purpose. To provide States with information regarding QC redesign and implementation as a result of the initial QC Roundtable meeting and to obtain additional input from State Agencies on the program.

  2. Background. Consistent with the announcement of the revisions to the UI/QC program transmitted by UIPL 4-86, the Department has determined how it will incorporate the eight changes to the QC program in its design and implementation. These changes were discussed with the QC Roundtable discussion group December 19, 1985. (See attachment for a list of the membership of the group.) As a result of the Roundtable comment and discussion, some additional changes will also be made.

  3. Summary of Status and Basis for Planned Changes 

    1. Sample Size

      1. Planned Change: All States to perform "core QC" --a minimum of 400 weeks claimed cases, per State per year, would be investigated to determin whether the payments were proper. Only those data elements that relate to eligibility for UI benefits would be collected.

      2. Status and Basis: The Roundtable members asked the QC Technical Workgroup to review the sample size required for each State to provide State officials with needed information defining acceptable levels of precision. This information will be reported back to the Roundtable at its next meeting on January 27, 1986. The ETA recommendation is that sample size be based on the following factors and considerations: achieve a 95% confidence factor; and reflect a State's population, area, weeks compensated volume, and size of covered employment.

    2. Pilots.

      1. Planned Change: QC is to be expanded to include the review investigation of claims that had been denied and employer tax collection activities. Other categories of UI payments (interstate benefits, combined wage claims, and Federal UI benefits) should eventually be included.

      2. Status and Basis: Some Roundtable members asked that the QC Technical Workgroup develop options for consideration on implementing denials along with the core QC program. Options should address timing delays that would be caused by implementing denials in those States with denial information in their data base. The ETA recommendation is that pilot testing of denials, tax, and data collection precede their implementation and that core QC start up March 1986. The priority order for pilots would be denials, tax, and data collection alternatives and are to be selected from volunteer States. The Department's goal is to implement denials and tax in FY 1987.

    3. Privacy.

      1. Planned Change: States would not be required to furnish information to the Federal Government about individuals whose claims were audited unless that information were provided without revealing the identity of the individual.

      2. Status and Basis: The Department plans to replace the Social Security Number with an identifier, coded in such a way as to preclude identification of the individual. A system of records will be established at the national office, Unemployment Insurance Service to ensure that information provided by States will be protected.

    4. Demographic Data.

      1. Planned Change: The collection of demographic data elements that do not relate to an individual's eligibility for UI benefits would not be a part of QC.

      2. Status and Basis: The Department plans to eliminate the requirement to collect household income and status, dependency and public assistance data. However, the Department's plan to encourage the optional collection of these four data elements was not acceptable to the Roundtable. Roundtable members suggested that if the Department wishes to collect demographic information a completely separate vehicle should be established and funded apart from QC

    5. Methodology.

      1. Planned Change: Obtaining information needed for QC by telephone rather than in face-to-face interviews would be tested on a limited basis.

      2. Status and Basis: The Department plans pilot tests to determine if and how valid information can be obtained using alternate means. It is understood that it may not be possible to implement pilots in this area immediately, but they should be tested as soon as resources permit piloting.

    6. Analysis.

      1. Planned Change: A portion of additional resources would be used for analysis of data generated by QC, to increase the number of claims sampled in areas where more information is needed, and for corrective action.

      2. Status and Basis: The Department plans to provide one analyst position per State. Roundtable members expressed a continuing concern that funding will not be available to address corrective actions identified under the QC program. The Department anticipates that QC data, reported annually, will provide the basis for appropriation request to support State corrective action which cannot be accomplished within existing resources.

    7. Sanctions.

      1. Planned Change: Neither sanctions nor funding "incentives" would be used to force the achievement of specified error rates.

      2. Status and Basis: The Department plans no sanctions or incentives.

    8. Release of Data.

      1. Planned Change: States would be required to 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. States would have the opportunity to release this information prior to any release at the national level.

      2. Status and Basis: The Department plans a separate State-Federal workgroup to deal with this subject in detail. The objective of this report is to display what States are doing together with error rate information in a way thatminimizes misunderstanding or misuse of the data. A standardized format will be developed.

  4. Action Required. State Administrators are requested to review the status and basis for making planned changes and provide any comments (Attn: TEUQ).

  5. Inquiries. Questions should be directed to your regional office.

  6. Attachment. List of QC Roundtable Members.