Employment and Training Administration
Washington, D. C. 20210






May 13, 1993




May 31, 1994











for Regional Management




Implementation of Benefits Quality Control (BQC) Alternative Methodology

  1. Purpose.  To provide information to State employment security agencies (SESA) on the implementation of alternative methodologies for conducting BQC investigations.

  2. Reference. ET Handbook No. 395 and UIPL 41-92 (August 3, 1992).

  3. Background. Since the start of the Quality Control (QC) Program, the Office of Quality Control has envisioned a change in the methods used to collect and verify QC data. The primary reason for this change is cost savings, which will be reallocated to fund other QC activities. Additionally, SESAs have long requested relief from the rigors of in-person verifications which resulted in excessive travel times and produced results which could be obtained using other, more cost effective methods.

    To measure the effectiveness of these other verification methods, a Telephone Pilot was conducted in four SESAs. The pilot findings indicated that telephone verifications were in fact, a viable option to the present BQC in-person methodology. Individual components of the QC investigation which could be conducted using other than the in-person method were identified. The Pilot results demonstrated that these components could be investigated using the telephone/FAX, and or mail with little or no loss in data quality.

    There were six design considerations developed that were applied in conjunction with the data generated by the Telephone Pilot to produce the alternative methodologies. The following provides a brief description of the six design considerations:

    1. Data Quality.  The BQC's credibility is based on the quality of its data. Use of alternatives to the in-person method of investigation which lessen the accuracy of its findings must be justified by considerable gains in other areas.

    2. Cost Savings.  One of the major appeals of alternative methods is their ability to increase the efficiency of BQC verifications. Cost savings was important and was appraised in conjunction with its impact on data quality. These cost savings had to be developed to specifically show the impact of savings versus loss in data quality.

    3. State Flexibility.  SESAs have long requested more flexibility in how they can routinely conduct BQC investigations. The use of telephone or mail was always available to the SESAs, but only in extenuating circumstances, and it was necessary to provide adequate justification when using these "other" methods. These alternative methods will allow SESAs more flexibility when conducting investigations.

    4. Administration.  This was a consideration because the Department must be capable of administering these changes equitably among SESAs. This means that the budgetary and policy implications of these changes must be comparable and consistent among SESAS.

    5. Monitoring.  Monitoring by both Regional and National Office (RO) (NO) staff is an integral part of maintaining QC data integrity. Where variations in the methodology to be applied for a particular investigative component exists, the Federal Monitor will be required to determine if the proper application of the methodology was utilized. It is preferable to minimize monitoring subjectivity and increase monitoring consistency when implementing the alternative methodologies.

    6. Consistency in Methodology.  Maintaining a consistent methodology throughout BQC is a primary consideration. This is so that any differences in BQC findings reflect the true rate of mispayments in the universe of State UI payments, and not the differences in how thoroughly BQC verifications are done. The above design considerations played an integral part when addressing the feasibility of applying the pilot results to the five QC investigative components. These investigative components are: (1) Claimant Interview, (2) Benefit Year/Base Period Wages, (3) Separation Information, (4) Work Search Verifications, and (5) Third Party and Other Verifications.

    After presenting these findings in several meetings throughout the year, and receiving input from both Regional and SESA QC staff, the Department is now moving towards implementation of these alternative methods. For each individual investigative component, Handbook No. 395 will be revised to indicate the primary and secondary method(s) to be used in the collection and verification of QC information. The Handbook will provide detailed instructions for each component, and the method(s) to be applied.

    The Department had anticipated implementing these changes in May 1993. However, any change to the QC investigative methodology requires approval from the Office of Management and Budget, and due to unforeseen delays, it is necessary to move the implementation date.

  4. Policy. SESAS are scheduled to begin implementation of the new alternative methods on all BQC cases effective July 5, 1993, which is the sample pull date for Batch 9327. This may also be applied to incomplete cases from previously selected batches. However, SESAs may choose to complete these unfinished cases using the "old" in-person method, at their discretion.

    The investigative components that will be mostly impacted by the new methodology are: Work Search Contact Interviews, Employer Interviews, and Third Party Verifications. A draft copy of Chapter VI, which explains the methodology changes in detail, is provided as an attachment (See Attachment A).

    There were basically no changes to the in-person method used for the Claimant Interview. The Claimant Interview anchors the BQC investigation, and is the major detection point for a number of overpayments and underpayments of all types. Additionally, the Pilot indicated that there was a considerable loss in data quality when using other than the in-person method for conducting the Claimant Interview.

    There were major changes to the Work Search Verification methodology. Work Search verifications must continue to be conducted in-person, with a number of "sanctioned exceptions". The in-person method remains the "primary" method of verification for this investigative component. This was necessary for several reasons including a loss in data quality, difficulty in administering and monitoring, and the overall inconsistencies among SESAs that would be exhibited by permitting SESA flexibility for Work Search Verifications. For a detailed listing of the "sanctioned exceptions", see Attachment A, (Work Search Contact Interviews, item No. 7). A number of "exceptions" were also rejected, due primarily to their inability to satisfy certain design considerations.

    The primary method for conducting Employer Interviews is now the use of telephone/FAX. See Attachment A, (Employer Interviews, item No. 8).The primary method for conducting Third Party verifications is now by use of telephone/FAX. See Attachment A, (Third Party Verifications, item No. 9).

  5. Resource Allocations. Due to the launching of Revenue Quality Control, a number of BQC positions have been reallocated effective May 10, 1993. The reallocation of the BQC positions means that SESAs' weekly sample size will be adjusted beginning with Batch 9319 which has a sample pull date of May 10, 1993, and again beginning July 5, 1993, the sample pull date for Batch 9327 and the effective date of alternative methods. (See sample adjustment chart, Attachment B).

    Additionally, SESAs currently conducting Program Improvement (PI) studies are to make the sample adjustments and continue their PI studies, while ensuring that minimum sampling requirements are met. SESAs that may need an extension of their current PI study should follow the procedures in UIPL 37-91.

  6. Procedures. SESAs should begin preparation for implementing alternative methods on July 5, 1993. These preparations include, but are not limited to, revisions to the State QC Procedures Operations Handbook, staffing adjustments, forms development, etc.

  7. Action Required. SESA Administrators are requested to provide this information to appropriate staff.

  8. Inquiries. Questions should be directed to the appropriate Regional Office.

  9. Attachments.

    1. Draft of Chapter VI, Handbook No. 395 and

    2. State Sampling Adjustment Chart.