2022 Pandemic Unemployment Assistance improper payment reviews

RESCISSIONS: None
EXPIRATION DATE: Continuing

CLASSIFICATION
      EMPLOYMENT AND TRAINING ADMINISTRATION                          Unemployment Insurance
                  ADVISORY SYSTEM                                     CORRESPONDENCE SYMBOL
             U.S. DEPARTMENT OF LABOR
                                                                      OUI/DPM
                Washington, D.C. 20210                                  DATE
                                                                        July 14, 2022

ADVISORY:              UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 16-22

TO:                    STATE WORKFORCE AGENCIES

FROM:                   BRENT PARTON
                        Acting Assistant Secretary

SUBJECT:                Announcement of the Pandemic Unemployment Assistance (PUA) Improper
                        Payment Estimate Reviews and the cancellation of the 2022 Benefit Accuracy
                        Measurement (BAM) Paid Claims Peer Reviews

1. Purpose. The purpose of this Unemployment Insurance Program Letter (UIPL) is to inform
   states that the 2022 BAM Paid Claims Peer Reviews are canceled and will be replaced by the
   PUA Improper Payment Estimate Reviews during the weeks of August 14-20, 2022, and
   September 18-24, 2022. Federal staff and state staff will review a sample of PUA cases
   provided by 26 states (half of the total sampled cases for the selected states to be reviewed per
   review) to establish an estimated national improper payment (IP) rate for the PUA program.

2. Action Requested. The information and instructions in this UIPL should be shared with all
   appropriate state staff.

3. Summary and Background.
    a. Summary – The U.S. Department of Labor (Department) is required to estimate an
       improper payment (IP) rate for all programs lasting at least 12 months and are determined to
       be susceptible to significant improper payments. The PUA program meets this requirement.
       To accomplish this and report a statistically valid national IP rate by Fall 2022, the
       Department is using a case review methodology developed for this purpose. Under the
       Paperwork Reduction Act of 1995 (PRA), a valid OMB control number is required for the
       collection of information requests. In the case of the PUA Reviews, Section 2116 of the
       Coronavirus Aid, Relief, and Economic Security (CARES) Act provides that the PRA does
       not apply to Subtitle A of Title II of Division A of the CARES Act¹.


        To carry out this review, the Department’s Employment and Training Administration (ETA)
        is cancelling the two BAM Paid Peer Reviews of state regular Unemployment Insurance
        (UI) program cases that were planned for July and September of 2022. In their place, the
        Department will utilize staff from all states that have historically participated in the BAM
        Paid Claims Peer Reviews and Federal staff to review a sample of PUA cases.


   ETA is providing travel funds and staffing costs for two participants from each state in
   these reviews. Attachment I provides the Schedule for State Participants. Attachment II
   provides the State Designation Form for every state to complete and identify their
   representatives for the review. States should return their completed designation form to
   [email protected].

   To calculate the PUA IP rate, 2,540 sampled PUA cases will be reviewed over the course of
   these two weeks. Sample cases will be selected from 26 states, including the ten states with
   highest PUA outlays that collectively represent 74 percent of all PUA outlays, and 16
   randomly-selected states to develop a statistically valid national IP rate. Attachment IV
   identifies the 26 states that will provide the sampled PUA case files, and Attachment III
   provides the Document Request Form to be used in preparation of these case files.

   ETA will provide additional funding for preparation of the case files, including staffing
   costs for the work hours involved in preparing case files. States may use contract staff to
   prepare and submit the sampled case files.

b. Background – PUA Program
   The PUA program was created as part of the Coronavirus Aid, Relief, and Economic
   Security (CARES) Act in March 2020. Enactment of the Continued Assistance for
   Unemployed Workers Act of 2020 (CAA) in December 2020 and the American Rescue
   Plan Act (ARPA) in March 2021 extended the PUA program beyond 12 months to expire
   on September 6, 2021. From the beginning of the program through May 2022, states have
   paid over $130.5 billion in PUA benefits (based on state reporting on the ETA 902P report).

   All states signed an Agreement with the Secretary to administer the PUA program. The
   Agreement incorporates amendments to the CARES Act made by CAA and ARPA. The
   CARES Act UC programs expired on September 6, 2021, though some states chose to end
   participation earlier. States must process and pay benefits to eligible individuals under the
   CARES Act UC programs for all weeks of unemployment ending on or before the date of
   the Agreement termination or program expiration (whichever comes first). The state must
   also comply with all responsibilities with respect to claims filed under these programs for
   those weeks, including, without limitation, the requirements under the Agreement and in
   guidance.

   Requirement to Estimate Improper Payment Rate

   Following enactment of the Payment Integrity Information Act (PIIA) of 2019, the Office of
   Management and Budget (OMB) issued guidance in Appendix C to OMB Circular A-123,
   Requirements for Payment Integrity Improvement. OMB guidance requires all Federal
   agencies to conduct risk assessments of all programs with annual outlays greater than $10
   million. Agencies must report IP estimates for programs lasting more than 12 months and
   identified as susceptible to significant IPs using a statistically valid sampling and estimation
   methodology plan. As provided in the PIIA, the Department conducted a risk assessment of
   the PUA program and identified it as susceptible to significant IPs. Therefore, the
   Department is required to calculate an estimated IP rate to be reported in Fall 2022 to
   comply with OMB guidance under PIIA.


     The Department anticipates this new approach for estimating the improper payment for
     PUA can be replicated for similar future temporary programs, if needed.

4. The PUA Review.
     a. Review Details
        The PUA Review will be conducted during two one (1)-week sessions:
               August 14 – 20, 2022; and
               September 18 – 24, 2022.

        Each selected state is assigned to one of the specified weeks. See Attachment I for the
        Schedule for State Participants. Both PUA reviews will be conducted at the Crown
        Plaza-Crystal City facility in Virginia. Review Participants are authorized and
        encouraged to travel on the Sunday before the review to ensure they are available
        to start the review at the beginning of the business day on Monday morning, and
        on the Saturday after the review to have a full business day of reviews on Friday,
        which is necessary to ensure all cases are reviewed during the week. Review
        participants who require travel flexibility due to travel connection issues, are to contact
        the National Office using [email protected]. The first session will begin at 8:00
        a.m. on August 15, 2022, and conclude no later than 4:00 p.m. on Friday August 19,
        2022. The second session will begin at 8:00 a.m. on September 19, 2022, and conclude
        no later than 4:00 p.m. on Friday September 23, 2022. State staff should plan to stay the
        entire time of the scheduled review. Dress code for the review is business casual.
        Participants should contact the hotel directly to guarantee room reservations with an
        individual credit card. The rate for the first session is $172 king suite and the rate for
        the second session is $224, plus 14.5 percent estimated tax and $5 hotel fee on each
        room night. Parking is $20 per day. The quoted rate and room availability will be
        guaranteed until July 22, 2022 for the first session, and August 22, 2022 for the second
        session. Individuals may call (703) 416-1600 and ask for group name “USDOL PUA
        Review” when making reservations, or online at: USDOL PUA Review – August 2022
        for the first session and USDOL PUA Review - September 2022 for the second session.
        Travel arrangements should be made to facilitate participation in the complete review.
        ETA is providing travel funds and staffing costs for two participants per state in these
        reviews. The state representatives must have appropriate UI experience, including
        knowledge of the various CARES Act programs, particularly PUA. Due to the expert
        experience level required in all UI programs, including CARES Act programs, it is
        essential that the PUA case reviewers selected by each state to represent the state at
        these reviews have experience in assessing payment accuracy or quality of state
        determinations, or working in a UI benefits operations unit. Participation from every
        state is critical, alongside Federal staff, to complete this volume of cases within the
        prescribed time frame.
     b. Covid-19 Protocols
        ETA will follow social distancing guidelines throughout the reviews, including the
        provision of masks, gloves, and sanitizers. In addition, the following protocols will also


   be implemented in the event Covid-19 conditions change, which is based on guidelines
   from the Center for Disease Control (CDC):

          If the infectious level is “low” in the Washington DC area, the PUA review will
           follow the above protocols;
          If the infectious level in the Washington DC area is “medium”, participants will
           be strongly encouraged to wear face masks and will pick-up their cases and
           perform the review in their hotel room.
          In the event that the infectious level in the Washington DC area is “high”, ETA
           will inform participating states of alternative plans.

c. Pre-Review Requirements
   All states will submit the form in Attachment II to identify the two designated
   reviewers, including their contact information and expected date(s) of arrival and
   departure. The completed form should be submitted to [email protected].
   For the states selected to provide case samples, ETA will provide instructions and
   training for state information technology (IT) staff to complete the sampling selection
   process in a separate Notice. States selected to provide PUA sampled case files will
   ensure that their IT staff participates in the training related to this sample selection
   process.

   States selected to provide case samples will:

          Provide a point of contact (POC) to receive the email regarding how to send the
           sampled case files through KiteWorks.
          Instructions regarding a PUA Claim File Checklist will be sent to states by
           separate communication, and includes the following:
               o States must include for each case file all case documentation associated
                  with each of the PUA cases selected for review.
               o Prepare and save the sampled case files on the state system until the
                  request to submit files is received in KiteWorks.
               o Submit the saved sampled case files to ETA using KiteWorks. States
                  should submit the sampled case files within three days of receiving the
                  submission request through KiteWorks.
               o The KiteWorks transmission tool is available at no cost. States may need
                  to use staff time and/or engage a contractor to assist with case file
                  preparation. ETA will provide these states with resources for such costs.
              o States must provide a short, written summary of its state’s laws, policies,
                  rules, etc. as they relate to benefits, eligibility, and claimants’
                  responsibilities for the PUA program. The following information should
                  be included in the summary:
                       • How case files are organized and where to find key information,
                           i.e., issue codes, initial claims filing method, claimed week filing
                           method, and appeal status information;


                             •   Background information on any unique interpretation of state
                                 law(s) that may become relevant during the review; and
                             •   Copies of state policies and procedures manual, as applicable.

           This information must be sent using KiteWorks prior to the review. States will not
           be allowed to request or submit documents during the review. Therefore, states
           must provide all documents necessary to assess the propriety of the sampled PUA
           payments.
TA users the ability to send and receive large quantities of files and
      d. Onsite Review

          Methodology for the review is described in Section 5 of this UIPL. ETA will develop
          and conduct training for all PUA reviewers to ensure that reviewers correctly apply all
          state and Federal laws and policies relating to PUA eligibility when conducting the PUA
          payment reviews and maintain confidentiality.

          ETA will provide the following resources on-site:
                 PUA Review Worksheets;
                 Resource information, including hard copies of state and Federal laws/policies,
                  Department guidance, and CARES Act program progression chart;
                 A hard copy/printed duplicate copy of the selected PUA cases to be reviewed;
                  and
                 A Table Lead/POC Federal staff assigned to each reviewing table to facilitate
                  handling questions/concerns about the sampled case file(s), and to ensure the
                  security of case files being reviewed. Question(s) on cases will be addressed by
                  contacting assigned Table Leads/Point of Contacts (POCs), and contact
                  information will be provided.


       e. State Funding

          ETA is providing the necessary resources and funding to carry out the PUA review and
          will reimburse the states for the following costs to conduct the PUA Review:

              1. file preparation covering the cost for the selected 26 states to prepare and send
                 files to ETA’s National Office (States may use contract staff to prepare and
                 submit these sampled case files);
              2. travel cost for all PUA review participants (Lodging, Air/Rail/Bus/Car, Tax,
                 Federal Rate for Meal and incidentals, and Parking (if used)); and
              3. staffing costs for the work hours for all PUA review participants, as well as for
                 applicable Information Technology staff for the 26 states that are submitting
                 claims for review. Reimbursement for staff time based on the Resource
                 Justification Model allocations.


5. PUA Review Methodology. Due to the limited sample size, the Department will not calculate
   an IP rate estimation for individual states. ETA determined that the current sample size is
   appropriate to obtain a statistically valid national estimate, while limiting the burden on states.
   The sample size is only sufficient to calculate a national estimated IP rate.

            Selection of states to provide sample cases. To obtain a statistically valid sample of
             cases for calculating a national PUA IP rate, ETA has determined that a total of 2,540
             PUA cases must be reviewed. To achieve this sample size, ETA has selected 26 states
             whose PUA claims will be used for the PUA review. This includes the ten states with
             the highest PUA outlays that will be included with certainty in the selected case
             universe as they account for approximately 74 percent of all PUA outlays. The
             additional sixteen states were randomly selected from the remaining forty-two states
             (including Puerto Rico and the District of Columbia²) that participate in the BAM Paid


             Claims Peer Reviews. See Attachment IV.

            Period of review. The period of review begins at the start of PUA eligibility (January
             20, 2020) and continues until the state’s termination of participation or program
             expiration (whichever comes first). The changes in eligibility requirements through
             CAA and ARPA are fully incorporated into the review methodology. The CAA
             extended the PUA program and made several changes to the program, including
             addition of the requirement that anyone who receives a payment of PUA on or after
             December 27, 2020 (CAA’s enactment date) must submit documentation substantiating
             employment or self-employment.

            Selection of sample cases within the states. The 10 states with the highest PUA outlays
             will provide 190 cases each, the 16 randomly selected states will provide 40 cases each.
             ETA developed an application that will be provided to states to randomly select cases
             for review. The National Office will use a random process to identify the weeks from
             which a state’s PUA samples will be selected. States will only be required to apply the
             methodology to their PUA case database. Additionally, ETA will provide the
             participating states with funding to cover the IT programming, staff hours, and
             production costs involved with this sampling process.

            ETA will contact the designated state POCs to inform them when they are able to begin
             the sampling process.

            The review scope for this PUA review process is limited to the records submitted by the
             states. No external investigation (e.g., communication with parties) will occur. No
             external factfinding will be conducted. Reviewers are bound by the facts and/evidence
             contained in the state records.


                  At the scheduled PUA reviews, state and Federal staff will be assigned cases to
                   be reviewed using a worksheet and resources developed by ETA that guide the
                   reviewer through the review process and to the conclusion of whether the PUA
                   payment was proper. State staff will have access to case materials of other states
                   solely during the course of the PUA review and solely for the purpose of ETA
                   calculating an estimated national IP rate for PUA. Specific instructions for
                   participants on properly securing case information will be provided during
                   review participant training to ensure no unauthorized individuals are able to
                   access the case files. Additionally, all cases will be “signed out” and “signed in”
                   to ensure that all files are accounted for each day as needed throughout each day
                   during the review, and reviewers must abide by all instructions for securing case
                   information.

          Federal staff will enter the results of each case as it becomes available during the
           review.

          At the end of the review, reviewers will no longer have access to the reviewed paper
           case materials, and all paper case files will be collected for onsite destruction/shredding.
           However, the electronic case files will be retained by ETA in a secure restricted location
           according to its document retention requirements.

          Due to the limited sample size, a statistically valid IP estimate cannot be produced for
           the individual states that are submitting case files for review. The sample size is only
           sufficient to calculate a statistically valid National estimated IP rate.

6. Inquiries. If you require additional information or assistance, please contact us via email at
   [email protected], or your Regional Office.

7. References.

          American Rescue Plan Act, Pub. L. 117-2, enacted March 11, 2021;
          Continued Assistance for Unemployed Workers Act of 2020, Pub. L. 116-260, enacted
           December 27, 2020;
          Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, enacted March
           27, 2020;
          Payment Integrity Information Act of 2019, Pub. L. 116-117, enacted March 2, 2020;
           and
          Appendix C to Circular No. A-123, Requirements for Payment Integrity Improvement,
           M-21-19, published March 5, 2021.

8. Attachments.

          Attachment I – Schedule for State Participants
          Attachment II – Staff Designation Form
          Attachment III – Document Request Form for Sample Case Files
          Attachment IV – Selected States to Provide PUA Case Files


                                                                                 Attachment I

          State Participants                               State Participants

1st PUA One-Week Review - August 14-20         2nd PUA One-Week Review - September 18-24
              Arkansas                                         Alabama
              California                                        Alaska
             Connecticut                                        Arizona
         District of Columbia                                  Colorado
               Florida                                         Delaware
               Georgia                                          Hawaii
                Idaho                                           Indiana
               Illinois                                          Iowa
               Kansas                                          Kentucky
              Louisiana                                        Maryland
                Maine                                       Massachusetts
               Missouri                                        Michigan
              Nebraska                                        Minnesota
               Nevada                                         Mississippi
           New Hampshire                                       Montana
             New Jersey                                       New Mexico
            North Carolina                                     New York
            Pennsylvania                                     North Dakota
            Rhode Island                                         Ohio
            South Dakota                                      Oklahoma
                Texas                                           Oregon
                Utah                                         Puerto Rico
               Vermont                                      South Carolina
               Virginia                                       Tennessee
              Wisconsin                                       Washington
              Wyoming                                        West Virginia


                                                 Attachment II

               STAFF DESIGNATION FORM


State   Name          Title             E-mail         Phone


                                                                                      Attachment III


Pandemic Unemployment Assistance (PUA) Case Documentation Request*


These documents must be provided to the Department according to the instructions in this Request, as
Reviewers will determine payment accuracy based on the data contained in state records only.

PUA Claim File Checklist

For this process, the universe from which the sample will be selected is all PUA payments from week
ending April 4, 2020 through September 6, 2021.

The state is to create a separate file folder for the selected PUA claim week indicated on the sample
file. Please ensure that you submit as many documents as necessary so the Reviewer can verify claim
information and determine payment accuracy. The file folder must include at a minimum, the
following documentation and information, if applicable to the claim:

    Claim Week Ending Date
                                                                    Page Number
    Documentation                                                   (s)/ Screen(s)   Other Clarifying
                                                                    Identifier       Information
    PUA Initial Claim Application
    Claimant Profile Screen (demographic data, benefit year
    ending date, claim date, etc.)
    SAVE System Screen (if applicable)
    Identity (ID) verification activity (Example: social security
    crossmatch and state issued ID verification)
    Proof of Wages (tax documentation, paystubs, etc.)
    IBIQ/SIDI Screens (out of state wages)
    Monetary Determinations Screen and Form(s)
    Monetary Redetermination Screen and Form(s)
    Non-Monetary Issue and Determinations Screen(s)
    Appeals Decisions Screen(s)
    Case material for all issues detected and resolved on claim
    Continued Claim Certification Forms (incudes the selected
    week and the two preceding claim weeks)

*
 Under the Paperwork Reduction Act of 1995 (PRA), a valid OMB control number is required for the
collection of information requests. In the case of the PUA Reviews, Section 2116 of the Coronavirus
Aid, Relief, and Economic Security (CARES) Act provides that the PRA does not apply to Subtitle A of
Title II of Division A of the CARES Act*.


 Payment History Screen(s)
 Overpayment/Underpayment Action Screen(s)
 Case Notation Screen(s)
 If applicable, claim information for regular UI claim


Law, Policy and Procedures – Provide a copy of the state law, policy, procedures, and regulations for
regular unemployment compensation and the PUA program. It is imperative that you provide the
information/documentation listed below pertaining to the claim as Reviewers will determine payment
accuracy based on state and federal law, policy, and procedures.
    ▪ Definition for issue codes
    ▪ Initial claims filing methods
    ▪ Claim week filing methods
    ▪ Benefit Rights and Responsibilities
    ▪ Appeal Status Information
    ▪ Eligibility and Disqualification Provisions
    ▪ WBA Calculation for regular UI and PUA program
    ▪ Income Offsets (pension, severance, or sub pay from union)
    ▪ Earnings Disregard
    ▪ Overpayment Calculations and Offsets
    ▪ Laws on UI Fraud and Penalties
    ▪ Background information on any unique interpretation of state law(s) that may come up during
      the case review, such as good cause provisions.


                                                           Attachment IV


  States Selected to Submit Cases in the 2022 PUA Review

   First Session                       Second Session
August 2022 Review                 September 2022 Review
    California                             Alaska
    Connecticut                            Colorado
     Georgia                                 Iowa
      Illinois                            Maryland
    Louisiana                           Massachusetts
  New Hampshire                            Michigan
    New Jersey                            Mississippi
  North Carolina                           Montana
   Pennsylvania                           New York
   South Dakota                              Ohio
      Texas                                 Oregon
       Utah                               Puerto Rico
     Vermont                            South Carolina

Footnotes

1. Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, enacted March 27, 2020, Title II, Subtitle A,
Section 2116

2. The sampling excludes the Commonwealth of the Northern Marianas Islands, Guam, American Samoa, U.S. Virgin
Islands, Republic of the Marshall Islands, Republic of Palau, and the Federated States of Micronesia. The PUA outlays
for these jurisdictions are significantly low making it unlikely that their samples would make a statistically significant
difference in the National IP rate estimation, when compared to the cost and burden of their participation in the
reviews. In addition, these jurisdictions have not participated in prior BAM reviews.