The Improper Payment Rate consists of all overpayments plus underpayments. The statutory definition of an improper payment is “any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements; and includes any payment to an ineligible recipient . . .”. UI Improper Payment Rate data is derived from the Benefit Accuracy Measurement (BAM) program. BAM is a statistical survey used to identify and support resolutions of deficiencies in the state’s unemployment insurance (UI) system as well as to estimate state UI improper payments to be reported to DOL as required by the Improper Payments Information Act (IPIA) and the Elimination and Recovery Act (IPERA).
BAM is also used to identify the root causes of improper payments and supports other analyses conducted by DOL to highlight improper payment prevention strategies and measure progress in meeting improper payment reduction targets.
The BAM survey covers the three largest permanently authorized unemployment compensation programs: State UI, Unemployment Compensation for Federal Employees (UCFE), and Unemployment Compensation for Ex-Service Members (UCX). State agencies (except Virgin Islands) are required to conduct BAM investigations by regulation (20 CFR Part 602). Approximately 24,000 cases are drawn from states annually, with sample sizes ranging from 360 cases per year in the 10 states with the smallest UI workloads to 480 cases in the remainder of the states. More detail can be found here on BAM Methodology and Program Description.