Attachment B to UIPL 33-99

Overview

IntroductionAs a deliverable for the UI Overpayment Recovery Project, two training conferences were conducted in June 1998. Included in this attachment are:

Supplemental training materials developed in response to trainee requests for additional information about selected topics.
The model recovery program developed by the trainees during mini-brainstorming sessions.

In this section:The following topics will be discussed in this section:

Title	Page
Performance Measures	2
Cost of Doing Business	4
Model Recovery Program	5

Performance Measures

IntroductionOne of the most useful tools to surface in the last few years for program management is the concept of performance measures. Performance measures can be used to:

Track program improvements.
Protect the integrity of the UI trust fund.
Ensure the program is cost-effective and efficient.
Provide data for management decisions.

Performance measures can be a useful tool Program management is an important component of any effective recovery program. It takes planning and oversight to ensure that a recovery program is both cost-effective and productive. Performance measures⁽¹⁾ can be a useful management tool to enhance recovery programs.

Basic rules The following are basic rules for performance measures:

Only measure things you can control.

Measure things you care about.

Mandate the outcome, not the process.

Be willing to change your measures to meet the needs of your program.

Compare your results to other collection organizations in both the private and public sector.

Measure things you can control Measurements based on recovery through the offset of UI benefits must be carefully examined. We can't control:

The economy.

When or if a claim is filed.

When or if a claim form is submitted.
Since we can not control these factors, dollars recovered as a result of UI benefit offset programs will not measure performance of the collection organization. Other types of data to exclude are:

Dollars recovered through voluntary restitution, i.e., debtor responds to the predetermination or overpayment notice with payment in full.

Other types of offset programs, such as disability insurance or state tax refund offsets.

Measure things you care about Focus your efforts on what's important to you. Is the number of telephone calls made important . . . or is the importance really the time expended to recover X number of dollars?

Mandate the outcome, not the process The measure involves dollars recovered as a result of your program, not the numberof telephone calls, collection letters, or other activities.

Be willing to change your measures If the measurement doesn't provide the data needed to manage your program, try something else.

Examples Examples of performance measures include:

Passive versus proactive. By comparing dollars recovered as a result of passive methods, i.e., offset programs, versus proactive methods, i.e., civil action or telephone outreach programs, you can measure your progress toward proactive recovery.
Allowance for Doubtful Accounts versus Collectible dollars. By comparing increases and/or decreases in the ratio between these two ETA 227 report categories, you can measure the effectiveness of your program.

Compare your results Measuring your performance only gives you part of the picture. It's important to see how you compare to other organizations.
As an example, one private collection agency reported a 43 percent recovery rate of debts referred to the agency for collection after 180 days. To compare the performance of your organization to this private collection agency, you would compare dollars recovered as a direct result of collection staff activities after the overpayment is 181 days old. Dollars recovered through civil action, prosecution, or offset programs cannot be included in the comparison.

Basic calculations To start the process of developing performance measures, it can be useful to look at data that is currently available. While not all BPC positions are used to recover overpaid UI benefits, this type of comparison can provide some insight about your recovery program. By substituting statistics specific to your own organization, you can see how you compare to SESA organizations nationwide. 1996 Statistics:
BPC Annual Positions: 2,065.6

Cost per Position: $51,409

Total Cost for Program: $107,977,637

1996 ETA 227 Data:
Total Cash Dollars Recovered: $157,056,687

Total Dollars Recovered: $267,649,637

Calculations:

Dollars recovered per cost of position: $5,206 ($267,649,637 divided by $51,409.)

Total dollars recovered per dollar of total cost: $2.48 ($267,649,637 divided by $107,977,637.)

Total "cash" dollars recovered per dollar of total cost: $1.45 ($157,056,687 divided by $107,977,635.)

Cost of Doing Business

Introduction To remain competitive in today's business environment, the cost of doing business is an important component of program management. Managers and executive level staff in the private sector routinely know the break-even point, i.e., the point at which potential profit is equal to the cost of the product or service. This type of information is equally important in the recovery of overpaid UI benefits.

Why it is important To determine the cost of doing business, it is necessary to accumulate both direct and indirect costs associated with recovery activities. At the same time, the dollars recovered in direct relationship to costs expended must be known. This type of information provides management with the data to make important decisions or develop a collection strategy.

Data gathering Determining the cost of doing business can be a complicated process, but some of the benefits include:
Ability to compete with private entities and compare results on a level playing field.

Identify the most cost-effective recovery processes and allocate resources accordingly.

Compilation of data to support legislative changes.

Model Recovery Program

Introduction A model recovery program was developed during each of the June 1998 training conferences. Since the models were very similar, they were merged. However, since the models were created during mini-brainstorming sessions, some editing was required. Every attempt was made to capture the intent of the trainees.

Prevention Brainstorming ideas for new techniques, methods, tools, and/or processes that could strengthen prevention include:

Analyze sources of overpayments and target training.

Develop opportunities to alert the general public and claimants to the consequences of fraud.

Consider automation of prevention techniques as a component of automation.

Something to think about:
Allocate adequate resources to prevention activities.

Enhance and/or strengthen existing prevention activities.

Provide ongoing and refresher training to staff, employers, and claimants.

Statutes Brainstorming ideas for statutes needed to support a proactive recovery program include:

Provisions for cooperation among state agencies.

Administrative authority to pursue recovery.

Penalty and interest should be charged and used to supplement program improvements and expenses.

Statutes that do not unnecessarily restrict or limit recovery activities and provide for rule making authority.

Determinations should have the same legal force as a judgment.

Right to appeal should be limited to the issue rather than the method of recovery.

Something to think about:

Statutes should be written in clear and concise language.

Collection strategy: Elements Brainstorming ideas for the elements of a collection strategy for a model recovery program include:

A plan and/or strategy for recovery.

Collectibility profiling based on management criteria.

Streamlining of the collection cycle to ensure recovery activities are initiated timely.

Knowing when to cease recovery efforts on potentially uncollectible debts.

Allocation of adequate resources to support a proactive recovery program

Use of all available methods and/or tools.

Collection staff have the skills for recovery activities.

Collection strategy: Negotiation tools Brainstorming ideas for negotiation tools that could support an aggressive, proactive recovery program include:
Flexibility in negotiating repayment agreements.

Authority to waive fees, such as penalty or interest, in exchange for timely payment.

Ability to negotiate repayment by other types of payment modes, such as electronic funds transfers and credit cards.

Authority to develop win-win solutions.

Automation Brainstorming ideas for features in an automated case management system include:
Automation of collection processes, such as billing, collection documents, and skip-tracing activities.

Capability to produce ad hoc reports to provide data for management decisions.

Document imaging to reduce dependency on paper.

Transfer of legal documents to courts electronically.

Voice recognition capability to reduce key entry of data.

Next action step technology to manage inventory, provide tracking capability, and maintain a complete case history.

Collection documents Brainstorming ideas on how collection documents can reflect a positive image of our organization while still being effective in the recovery process include:
Intensify tone of documents throughout the collection cycle.

Provide clear, concise instructions for repayment and include the consequences of non-payment.

Use of formatting features, such as white space and font size.

Ensure documents are professional in appearance.

Develop documents that are easy to read and understand.

Design documents that meet the needs of the process.

Documents should be non-threatening.

Personal contact Brainstorming ideas for an effective telephone collection program include:
Provide telephone training on an ongoing basis and include techniques such as listening, controlling the conversation, negotiating win-win solutions, etc.

Provide incentives for success.

Automate the process.

Implement a flexible work schedule.

Use every opportunity to collect debtor profile and "good faith" information that may assist in collection or skip-tracing activities.

Periodically assess the program to evaluate cost-effectiveness.

Be fair but firm when negotiating repayment with the debtor.

Program management Brainstorming ideas for performance measures in a model recovery program include:

Ratio between dollars written off and dollars recovered.

Comparison between dollars recovered through passive methods to dollars recovered through proactive methods.

Dollars recovered for each dollar of cost to recover.

Increases/decreases in beginning and ending collectible overpayment balances.

Increases/decreases in dollars recovered by aging schedule.

Benchmark against other entities.>
Something to think about:
Data needed to measure effectiveness includes dollars recovered, written off, collectible dollars, number of cases, aging schedule, etc.

Direct and indirect costs of recovery programs.

1. The USDOL has oversight responsibility for the UI program and is addressing performance measures, standards, and the desired level of achievement.

Performance measures can be a useful tool	Program management is an important component of any effective recovery program. It takes planning and oversight to ensure that a recovery program is both cost-effective and productive. Performance measures⁽¹⁾ can be a useful management tool to enhance recovery programs.
Basic rules	The following are basic rules for performance measures: Only measure things you can control. Measure things you care about. Mandate the outcome, not the process. Be willing to change your measures to meet the needs of your program. Compare your results to other collection organizations in both the private and public sector.
Measure things you can control	Measurements based on recovery through the offset of UI benefits must be carefully examined. We can't control: The economy. When or if a claim is filed. When or if a claim form is submitted. Since we can not control these factors, dollars recovered as a result of UI benefit offset programs will not measure performance of the collection organization. Other types of data to exclude are: Dollars recovered through voluntary restitution, i.e., debtor responds to the predetermination or overpayment notice with payment in full. Other types of offset programs, such as disability insurance or state tax refund offsets.
Measure things you care about	Focus your efforts on what's important to you. Is the number of telephone calls made important . . . or is the importance really the time expended to recover X number of dollars?
Mandate the outcome, not the process	The measure involves dollars recovered as a result of your program, not the numberof telephone calls, collection letters, or other activities.
Be willing to change your measures	If the measurement doesn't provide the data needed to manage your program, try something else.
Examples	Examples of performance measures include: Passive versus proactive. By comparing dollars recovered as a result of passive methods, i.e., offset programs, versus proactive methods, i.e., civil action or telephone outreach programs, you can measure your progress toward proactive recovery. Allowance for Doubtful Accounts versus Collectible dollars. By comparing increases and/or decreases in the ratio between these two ETA 227 report categories, you can measure the effectiveness of your program.
Compare your results	Measuring your performance only gives you part of the picture. It's important to see how you compare to other organizations. As an example, one private collection agency reported a 43 percent recovery rate of debts referred to the agency for collection after 180 days. To compare the performance of your organization to this private collection agency, you would compare dollars recovered as a direct result of collection staff activities after the overpayment is 181 days old. Dollars recovered through civil action, prosecution, or offset programs cannot be included in the comparison.
Basic calculations	To start the process of developing performance measures, it can be useful to look at data that is currently available. While not all BPC positions are used to recover overpaid UI benefits, this type of comparison can provide some insight about your recovery program. By substituting statistics specific to your own organization, you can see how you compare to SESA organizations nationwide. 1996 Statistics: BPC Annual Positions: 2,065.6 Cost per Position: $51,409 Total Cost for Program: $107,977,637 1996 ETA 227 Data: Total Cash Dollars Recovered: $157,056,687 Total Dollars Recovered: $267,649,637 Calculations: Dollars recovered per cost of position: $5,206 ($267,649,637 divided by $51,409.) Total dollars recovered per dollar of total cost: $2.48 ($267,649,637 divided by $107,977,637.) Total "cash" dollars recovered per dollar of total cost: $1.45 ($157,056,687 divided by $107,977,635.)

Introduction	To remain competitive in today's business environment, the cost of doing business is an important component of program management. Managers and executive level staff in the private sector routinely know the break-even point, i.e., the point at which potential profit is equal to the cost of the product or service. This type of information is equally important in the recovery of overpaid UI benefits.
Why it is important	To determine the cost of doing business, it is necessary to accumulate both direct and indirect costs associated with recovery activities. At the same time, the dollars recovered in direct relationship to costs expended must be known. This type of information provides management with the data to make important decisions or develop a collection strategy.
Data gathering	Determining the cost of doing business can be a complicated process, but some of the benefits include: Ability to compete with private entities and compare results on a level playing field. Identify the most cost-effective recovery processes and allocate resources accordingly. Compilation of data to support legislative changes.

Introduction	A model recovery program was developed during each of the June 1998 training conferences. Since the models were very similar, they were merged. However, since the models were created during mini-brainstorming sessions, some editing was required. Every attempt was made to capture the intent of the trainees.
Prevention	Brainstorming ideas for new techniques, methods, tools, and/or processes that could strengthen prevention include: Analyze sources of overpayments and target training. Develop opportunities to alert the general public and claimants to the consequences of fraud. Consider automation of prevention techniques as a component of automation. Something to think about: Allocate adequate resources to prevention activities. Enhance and/or strengthen existing prevention activities. Provide ongoing and refresher training to staff, employers, and claimants.
Statutes	Brainstorming ideas for statutes needed to support a proactive recovery program include: Provisions for cooperation among state agencies. Administrative authority to pursue recovery. Penalty and interest should be charged and used to supplement program improvements and expenses. Statutes that do not unnecessarily restrict or limit recovery activities and provide for rule making authority. Determinations should have the same legal force as a judgment. Right to appeal should be limited to the issue rather than the method of recovery. Something to think about: Statutes should be written in clear and concise language.
Collection strategy: Elements	Brainstorming ideas for the elements of a collection strategy for a model recovery program include: A plan and/or strategy for recovery. Collectibility profiling based on management criteria. Streamlining of the collection cycle to ensure recovery activities are initiated timely. Knowing when to cease recovery efforts on potentially uncollectible debts. Allocation of adequate resources to support a proactive recovery program Use of all available methods and/or tools. Collection staff have the skills for recovery activities.
Collection strategy: Negotiation tools	Brainstorming ideas for negotiation tools that could support an aggressive, proactive recovery program include: Flexibility in negotiating repayment agreements. Authority to waive fees, such as penalty or interest, in exchange for timely payment. Ability to negotiate repayment by other types of payment modes, such as electronic funds transfers and credit cards. Authority to develop win-win solutions.
Automation	Brainstorming ideas for features in an automated case management system include: Automation of collection processes, such as billing, collection documents, and skip-tracing activities. Capability to produce ad hoc reports to provide data for management decisions. Document imaging to reduce dependency on paper. Transfer of legal documents to courts electronically. Voice recognition capability to reduce key entry of data. Next action step technology to manage inventory, provide tracking capability, and maintain a complete case history.
Collection documents	Brainstorming ideas on how collection documents can reflect a positive image of our organization while still being effective in the recovery process include: Intensify tone of documents throughout the collection cycle. Provide clear, concise instructions for repayment and include the consequences of non-payment. Use of formatting features, such as white space and font size. Ensure documents are professional in appearance. Develop documents that are easy to read and understand. Design documents that meet the needs of the process. Documents should be non-threatening.
Personal contact	Brainstorming ideas for an effective telephone collection program include: Provide telephone training on an ongoing basis and include techniques such as listening, controlling the conversation, negotiating win-win solutions, etc. Provide incentives for success. Automate the process. Implement a flexible work schedule. Use every opportunity to collect debtor profile and "good faith" information that may assist in collection or skip-tracing activities. Periodically assess the program to evaluate cost-effectiveness. Be fair but firm when negotiating repayment with the debtor.
Program management	Brainstorming ideas for performance measures in a model recovery program include: Ratio between dollars written off and dollars recovered. Comparison between dollars recovered through passive methods to dollars recovered through proactive methods. Dollars recovered for each dollar of cost to recover. Increases/decreases in beginning and ending collectible overpayment balances. Increases/decreases in dollars recovered by aging schedule. Benchmark against other entities.> Something to think about: Data needed to measure effectiveness includes dollars recovered, written off, collectible dollars, number of cases, aging schedule, etc. Direct and indirect costs of recovery programs.