UI grants to prevent and detect identity theft

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2006/UIPL29-06_508.pdf

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                  UI
                ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                         OWS/DUIO
               Washington, D.C. 20210                      DATE

                                                           August 08, 2006

ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 29-06

TO:               STATE WORKFORCE AGENCIES

FROM:             EMILY STOVER DeROCCO /s/
                  Assistant Secretary
                  Employment and Training Administration

SUBJECT:          Unemployment Insurance Funding Opportunity for Activities to Prevent and
                  Detect Identity Theft

1. Purpose. To inform State Workforce Agencies (SWAs) of anticipated funds in Fiscal Year
   (FY) 2007 that provide the opportunity to submit supplemental budget requests (SBRs) for
   activities to prevent and detect cases of unemployment insurance (UI) fraud due to identity
   theft.

2. References. ET Handbook No. 336 18th Edition, UI State Quality Service Plan Planning and
   Reporting Guidelines, and Regional Office issuance regarding FY 2005 supplemental budget
   requests opportunity.

3. Background. In its semiannual report to Congress, the U.S. Department of Labor’s (USDOL)
   Office of Inspector General (OIG) indicated that identity theft in the UI program is a top
   management challenge. The OIG expressed concern that identity theft is being perpetrated
   by “nontraditional organized crime groups” resulting in “more costly, complex and far
   reaching” fraud schemes than previously seen within the UI system. Most unemployment
   claims are now filed by telephone or via the Internet, making the process more efficient and
   access to the UI system convenient for unemployed workers. However, telephone and
   Internet access have also created new opportunities for fraud schemes.

   In (Fiscal Years) FY 2003, 2004, and 2005, the USDOL provided a total of about $34 million
   to states to implement projects and automated systems that helped to prevent and detect UI
   overpayments including the mitigation of identity theft. These projects included real-time
   access to Social Security Administration (SSA) data and data cross matches with state
   government agencies to verify personal information provided by claimants. The additional
   funds anticipated for FY 2007 will allow state UI agencies to obtain staff to target efforts

      Rescissions                                   Expiration Date
      None                                        August 8, 2007

   aimed at preventing and detecting cases of identity theft without sacrificing the timeliness of
   proper payments.

4. FY 2007 Funds Available for Activities to Prevent and Detect Identity (ID) Theft.
   In FY 2007, $10 million has been requested by the Department to fund approximately 160
   staff positions nationwide to examine and reconcile discrepancies promptly in claimants’
   personal identifying information. These positions are not intended to design and program
   data matching systems. Use of funds will be limited to staff activities such as data matching,
   fact-finding, and investigations to prevent and detect fraudulent overpayments related to
   identity theft.

5. Guidelines for the Preparation of SBRs.
   To receive funds for staff, states must submit a Supplemental Budget Request (SBR) using
   the format contained in Attachment A. Attachment B is a list of the types of data that states
   are asked to collect to show what impact these resources had on preventing and detecting
   identity theft. Contingent upon the appropriation of the funds requested, each state will
   receive funds for staff positions based on the size of the state. Large states will receive 4
   positions, medium size states will receive 3 positions and small states will receive 2
   positions. Attachment C contains the list of state sizes. Requests for additional funding for
   staff will be considered and awarded based on the merits of the SBR. All states may request
   additional positions that will be considered based upon available funding. States requesting
   additional positions must ensure that their plans are viable at both the levels provided based
   on state size as well as with any additional staffing requested.

   ET Handbook No. 336 contains instructions for completing SBRs. Requests that do not
   contain complete information, as requested and outlined in Attachment A, will not be funded.

   In accepting funds related to these SBRs, states must agree to provide data (see Attachment
   B) for an assessment of the effectiveness of the identity theft prevention and detection
   activities they undertake with these funds. Nine states will be selected to participate in a
   study. The final data to be collected for the study will be provided to states under separate
   cover. Examples of the types of data expected to be needed are listed in Attachment B.
   These results will be used to prepare a report to Congress.

6. SBR Award Time Lines.
   • Proposals must be electronically submitted or postmarked and mailed by September 15,
      2006, to the National Office (NO).
   • Evaluation Panel completes evaluations by October 13, 2006.
   • Grant awards made to SWAs by November 7, 2006, or within 30 days of the FY 2007,
      appropriation enactment whichever date is later.

7. Project Expenditure Period. All SBR funds used for non-automation activities must be
   obligated by December 31, 2007, and expended/liquidated within 90 days. There are no
   provisions allowing for an extension of the obligation period.

8. Action Required: State Administrators            are requested to distribute this advisory to
   appropriate staff. States submitting SBRs should either electronically submit or prepare an
   original and three copies of each of the following:

   •   SBR using the format provided in Attachment A
   •   Completed forms SF 424 (revised 10-2005) and SF 424a as required in Handbook 336,
       18th Edition.

   States submitting the SBR electronically must email by September 15, 2006, to
   [email protected]. States submitting the SBR by mail must postmark and mail their SBR
   by September 15, 2006 to:

       USDOL/Employment and Training Administration
       Office of Workforce Security/Division of UI Operations (Attn: Nancy Dean)
       Room S-4231
       200 Constitution Avenue NW
       Washington, DC 20210

9. Inquiries. Direct questions to Nancy Dean at 202-693-3215 or [email protected] .

10. Attachments.

   Attachment A: Supplemental Budget Request for Identity Theft Prevention/Detection
   Activities

   Attachment B: Examples of Data Needs for Study

   Attachment C: State Size Configuration Classifications Based upon State Population

Attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2006/UIPL29-06_Att1.pdf

Attachment A

 Supplemental Budget Request for Identity Theft Prevention/Detection
                            Activities

                                Cover Sheet

State: ________________________________________

Name of Contact: _______________________________

Phone: ________________________________________

Email Address: _________________________________

Total Project Cost: ______________________________

Number of Staff Requested: _______________________

Staff Costs Requested: ___________________________

Other Costs Requested: __________________________

State Agrees to Maintain/Collect Data Yes___ No___

 Supplemental Budget Request for Identity Theft Prevention/Detection
                             Activities
          Proposals must adhere to this specific format.

1. Proposal Summary: Provide a one paragraph summary of the activities that the SBR
will fund.

2. Proposed Expenditures: Provide information that applies to each category below.

         a. Staff Needs. The proposal should identify one-time SWA staff needs and/or
contract staff needs. Staff needs should include the type of position, the expected number
of staff hours, and the projected hourly costs. All staff funded under this SBR grant must
be in excess of base staff, and the SBR must state this in writing. SWAs must include
this information using the following format which includes illustrative information.

          Position Title         # of Hours         Cost Per Hour          Total Cost
           Investigator             2080                 $30                $62,400

If contract staff is requested, documentation must include the type of position, estimated
contract staff hours, and the projected hourly costs for the contract staff.

       b. Other Costs: ADP staff costs may be funded for minimal programming which
can be accomplished quickly and utilized by the integrity staff funded through this SBR.
Programming of large data matching systems, such as the SSA cross match, may not be
funded through this grant.

Funds from this project may be used to pay for other necessary costs; proposals must
explain the basis for the projected cost estimate for each item. For example, funding
requests for posters to inform the public of integrity activities that staff is conducting
should include an estimated cost per poster and the number of posters to be purchased.
Funds under this SBR project may be used to pay for any increases in long distance
telephone costs, but only for work specifically related to this initiative.

5. Project Timeline:
       • Provide a planned implementation schedule identifying dates of all critical
           steps up to and including implementation.
       • Funds must be expended by December 31, 2007; therefore, it is critical that
           the project be implemented quickly. Priority will be given to states that
           anticipate early implementation of the project.
       • Selected states will submit assessment data for report to Congress 180 days
           following the end of Fiscal Year.

Attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2006/UIPL29-06_Att2.pdf

Attachment B

                      Examples of Data Needs for Study

1. Types of data matching systems used to identify potential identity theft.

2. Other (non-controllable) sources of information used to identify potential identity
   theft (employer, agency staff, fraud hotline, etc)

3. Number of cases referred for identity theft investigations.

4. Number of completed case investigations.

5. Number of incomplete investigations due to:
    a. Claimant fails to respond to call in notice
    b. Claimant fails to return phone calls
    c. Inability to contact claimant
    d. Incomplete claims filing (e.g., the individual hangs up during the claim filing)

6. Estimate of the number of cases of potential identity theft and overpayment amount
   these incomplete investigations may have prevented.

7. Number of cases investigated determined to be identity theft:

     a.   Number of cases of identity theft identified before 1st payment made
     b.   Number of case of identity theft identified after 1st payment made
     c.   Amount of overpayment detected due to identity theft
     d.   Number of cases identified as identity theft in a multi-claimant scheme or
          fictitious employer scheme

8. Number of cases detected and determined to be other types of fraud or non-fraud
   overpayments.

9. Amount of overpayment detected other than identity theft.

Attachment C (page 7 of the signed PDF): https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2006/UIPL29-06.pdf#page=7

Attachment C

State Size Configuration Classifications Based upon State Population
for FY 2006 Funds

Alabama Medium
Alaska Small
Arizona Medium
Arkansas Medium
California Large
Colorado Medium
Connecticut Medium
Delaware Small
District of Columbia Small
Florida Large
Georgia Medium
Hawaii Medium
Idaho Medium
Illinois Large
Indiana Medium
Iowa Medium
Kansas Medium
Kentucky Medium
Louisiana Medium
Maine Medium
Maryland Medium
Massachusetts Medium
Michigan Large
Minnesota Medium
Mississippi Medium
Missouri Medium
Montana Small
Nebraska Medium
Nevada Medium
New Hampshire Medium
New Jersey Medium
New Mexico Medium
New York Large
North Carolina Medium
North Dakota Small
Ohio Large
Oklahoma Medium
Oregon Medium
Pennsylvania Large
Puerto Rico Medium
Rhode Island Small
South Carolina Medium
South Dakota Small
Tennessee Medium
Texas Large
Utah Medium
Vermont Small
Virgin Islands Small
Virginia Medium
Washington Medium
West Virginia Medium
Wisconsin Medium
Wyoming Small