Revenue Quality Control program questions and answers

U.S. Department of Labor
Employment and Training Administration Washington, D.C. 20210 Classification: UIPL Correspondence symbol: RQC Issue date: [blank in source] Rescissions: None Expiration date: [blank in source] Directive: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 31-94 To: ALL STATE EMPLOYMENT SECURITY AGENCIES From: MARY ANN WYRSCH, Director, Unemployment Insurance Service Subject: Additional RQC Program Design Questions and Answers (Q&As)

1. Purpose. To provide State Employment Security Agency (SESA) staff with answers to questions that have been asked during implementation of the Revenue Quality Control (RQC) program.

2. References. UIPL No. 16-94, (3/15/94) UIPL No. 18-93 (3/18/93), UIPL No.20-93 (3/8/93).

3. Background. The RQC staff compiles questions and issues that arise during RQC training classes, Regional and National Office monitoring trips, and from other sources in order to develop a generic set of answers to those questions believed to be of universal interest to the State staff implementing RQC.

4. Questions and Answers. The attached Q&As (dated May 1994) are an addition to the compilation of questions and answers dated February 1994. The Q&As are arranged by tax function and in the same sequence as the RQC Operations Handbook. This format provides the necessary flexibility to allow periodic Q&A updates to be inserted in the appropriate section. (For example, the May Status Acceptance Sampling pages can be inserted at the end of the February Status Acceptance Sampling section.) Numbering of the questions is continuous.

5. Action Required. SESA Administrators are requested to provide the attached Q&As to RQC Reviewers and appropriate ADP staff. Three copies are attached for your convenience.

6. Inquiries. Direct inquiries to your Regional Office.

7. Attachments. I. Questions and Answers compilation.

Attachment — Official PDF: https://oui.doleta.gov/dmstree/uipl/uipl94/uipl_3194a.pdf

                MAY RQC QUESTIONS AND ANSWERS


Tax Function:   GLOBAL
Problem Type:   Software

Question 5. Is it OK to modify the "PICKNMBR" Program
provided by the National Office (NO) so that the program
will select or generate a Random Number, rather than the
program having to secure/select one and load one (via the
control record)?

Answer: The "PICKNMBR" Program can be modified to do this
as long as the logic, operation, output etc. are not
changed. Before making any changes the State should verify
their proposed changes with the NO technical staff via a
call through the NO HOTLINE (1-800-473-0188).

Tax Function:   GLOBAL
Problem Type:   Other

Question 3. Consider adding an example in the glossary
definition for contributory employers to include reimbursing
employers who elect to pay rates.

Answer: The glossary definition will be changed to read
exactly like the revised definition for Contributory
Employers in the new ETA 581 definitions and instructions
which reads as follows:

          An employer who is required by the State
unemployment compensation law to pay contributions into the
State unemployment fund. Employers of certain classes who
are not required to pay contributions but elect to do so,
and employers with a 0.0% contribution rate are included in
the definition of "contributory employer".

Note: Governmental and certain non-profit organizations
(501 (c) (3)) who elect to pay contributions should also be
included as contributory employers in Acceptance Sample
universes.


Question 4. A suggestion was made to put a "boiler plate"
of the annual report on the Sun System.
Answer: A Good idea! The NO will add this item to our list
of "Things to Do" before RQC goes mandatory.


Question 5. Explore the Workload Validation and the RQC
Universes; are these working together? Are they looking at
the same thing? Will workload validation be changed to
reflect changes in the 581 report?

Answer: Workload Validation (WV) currently reviews only two
tax items, Subject Employers and Wage Items because these
are the only tax data items used in the budgeting process.
Both items are contained in the ETA 581 report. The
standard for quality for both items is adherence to the
Federal definitions for that report, contained in ET
Handbook 401, Unemployment Insurance Reports Handbook . Some
of the RQC computed measures also use the data element
Subject Employers; in that sense both RQC and WV are working
together and attempting to look at the same thing. It is
currently planned to change several definitions or reporting
instructions on the 581 report effective January 1, 1995.
These changes will affect the reporting instructions for
Subject Employers. WV will of course take these changes
into account.

Tax Function:   GLOBAL
Problem Type:   Other (Continued)


At some point in the future, a broader spectrum of UI data
will be validated. Two pilots are developing approaches to
this in FY 1994--an RQC pilot using selected 581 data and
the Performance Measurement Review field test using benefit
payment performance data. In all cases, the validation
standard is the current official reporting definitions and
procedures.

Tax Function:   STATUS
Problem Type:   Systems Review


Question 4. The Systems Review asks, "Is the info from
Status Determinations and other changes to the employer
records verified for accuracy?" What do you mean by "other
changes?" Why not say "pertinent" or "material changes"?

Answer: We will revise the handbook to say "other material
changes".


Question 5. One State questions the value of Status
"tracking systems" in Execution of Events. They say the
volume of work is so great that human resources are not
available to establish a tracking system and want to know
why the NO puts emphasis on this.


Answer:   Establishing a tracking system or following up on
incomplete or potentially liable Status Determinations
offers assurance that all documents are acted upon and
maintains control of work. Finding of "risk" in a Systems
Review does not cause the SESA to fail in that function.

Tax Function:   STATUS
Problem Type:   Acceptance Sample


Question 12.   There seems to be confusion about what we
mean by questions in the new Status Acceptance Sample
section "Accuracy of Initial Liability Decision". Does this
refer to pending or temporary accounts? What if a State
does not have such a procedure?

Answer:   Question 1 asks whether or not the SESA has a
written procedure permitting a liability decision to be made
when required info is less than complete. This question
refers to setting up actual active accounts, not pending or
temporary accounts. If a State does not have a written
procedure which allows an actual active account to be set up
based on less than complete required information, the
reviewer is instructed to skip questions 2 and 2a. and
proceed to the next section.   We will clarify that we are
not referring to pending or temporary accounts in both the
instructions and questions when the handbook is revised.
Question 13. Should Successors who do not have experience
transferred be included in the Status successor universe?

Answer: Yes, it is the Successor Determination, not the
transfer of experience, which places the employer in the
universe. The successor may or may not, according to State
law, inherit the experience of the predecessor. Each
reviewer will need to follow his or her State law. NOTE:
Among the criteria considered to be included in the
universe, an employer must (1) be determined to be a
successor (according to State law) and (2) be designated or
coded as a successor.
Question 14. The Status function has two reviews. The "A"
Status review evaluates the accuracy of the Status
Determination and rate assignment, whereas the "B" review
evaluates the accuracy of the posting of Status
Determination information:

(a) If a Status Acceptance Sample case fails the "A"
review, is it necessary to complete the Status "B" review?

(b) If a case being reviewed fails the "A" review but the
incorrect information from the determination was posted to
the "employer account record, should the "B" review fail as
well? (E.g., The determination notice sent to the employer
indicated liability was established Sept 15, 1993. However
documentation indicated the account established liability
Jan. 1, 1994. The Sept. 15 date was posted).

Tax Function:   STATUS
Problem Type:   Acceptance Sample (Continued)

Answer: (a) Yes, The "B" review is actually an accounting
function which evaluates the correctness of the Status
Determination posting. Accurate recording of Status
information (posting) is material to current and future
payment of tax revenues. E.g., if the correct mailing
address is not posted, the employer may not receive
contribution reports, delinquency notices, billings etc.
There are separate lines on the Program Review Findings
Chart for the two reviews of the Status function. It is
possible to pass one review and not the other.
        (b)   No, the "B" review should not fail. The
posting was correct based on the determination information.

Question 15. Several States and RO representatives have
expressed concern about the amount of time available to
complete Field Audit and Status Acceptance Sample reviews.
The universe time period for the Status and Field Audit
functions is one calendar year. Because of the required
three month time lag for SESAs who set up accounts based on
less than complete information, the New and Successor Status
AS cases cannot be selected and reviewed until April 1.
The reviewers will be busy at this time drafting and
finalizing the annual report, making recommendations for
improvements and planning for the next year's RQC review.
Could the Status and Field Audit universe time periods be
shortened or based on the Federal fiscal year?

Answer: There is insufficient experience at this point in
time to make a change in the RQC design. A detailed
workplan was presented during the RQC training sessions
which we believe will enable reviewers to accomplish all
phases of the RQC review in time to complete the annual
report by mid-May.
  If reviewers follow the workplan, and draft findings as
they complete each function, the annual report will only
need to be finalized in May. Field Audit cases and Status
Inactivations/Determinations can be reviewed during the
first quarter, Status New and Successors during April and
the report finalized during early May.

Remember, the first year will be the most difficult.   A
good workplan is important.   We will evaluate the situation
again when there has been more experience with the design
and workplan.

Tax Function:   CASHIERING
Problem Type:   Systems Review


Question 3. Why is RQC excluding all benefit payment
account activity from cashiering bank statement
reconciliation?


Answer: RQC made a decision to review only tax activity.
Some measurement for oversight in the benefit account
activity will be developed by UIS in the future as part of
the Federal/State "Performance Enhancement" group's decision
on oversight.


Question 4. The Systems Review asks if the area for opening
and sorting checks is restricted to authorized personnel
only. In one State, normally the employer remittances are
processed in a restricted area; however, during the
quarterly mail rush, mail is processed throughout the Tax
Department. On the due date and one or two days after the
due date, a large room in the basement is set up and people
from all over the building come to help open mail. They are
supposed to sign in and out, but anyone can walk in. How
should the question be answered?
Answer: The answer to the Systems Review question should be
"No". The RQC Reviewer would deem that a risk exists in
this area. (Note: Remember, a risk would not mean that
reasonable assurance of quality did not exist in Cashiering;
the final evaluation comes when sampling checks to determine
if they were properly posted and processed timely.)

Question 5.   Clarify the intent of this question, "Does the
SESA maintain an audit trail for the following types of
transactions:" a. "Receipt of employer contributions?"
(Does this mean that the SESA should be microfilming or
imaging all checks prior to depositing?)

Answer:   The intent of this question was to ascertain
whether or not the SESA has systems or procedures to track
an employer's check through the SESA records. (RQC did not
intend to imply that all States should photocopy, microfilm,
image, etc. all employer checks prior to depositing.)


Question 6. SR question asks "Are untimely envelopes
retained?" This question seems to indicate that actual
envelopes must be kept. If a state used imaging or
microfiching, the answer would be "No" which would indicate
a risk. Should the question be reworded to say, "Is there a
method in place to document untimely reports/payments?"
Tax Function:   CASHIERING
Problem Type:   Systems Review (Continued)

Answer:   Agreed.   The question will be reworded to say
"Does the SESA actually retain untimely envelopes, or does
the SESA use microfiching or imaging of such envelopes to
document untimely reports and payments?"

Question 7. (a) SR question #3 - "After the mail is opened,
the reviewer must note what sorts are used to control the
flow of work and what batches are the end result of the
sorts, and answer the following questions: a-n".   This
question has multiple subject questions. "a through f"
pertain to sorts, but "g - n" do not pertain to sorts.
Shouldn't these questions be reformatted?

             (b) SR question #3n - "Does the procedure
require a match or comparison between the paper report and
the electronically transferred funds?" This question is
confusing. What do you mean by paper report?   Should the
question be "Does the procedure require an external
verification of the posting of electronically transferred
funds?"

Answer:   (a) Agreed. The questions will be reformatted to
properly reflect those which pertain to sorts and those
which do not.

             (b) We will revisit this question and provide
clarification as needed.

Question 8. (a) Lockbox review question #4c - "Is balance
information available to SESA throughout each business day?"
Should this question really be evaluative? If so, why only
for Lockbox State? Shouldn't this also be in the review of
non-lockbox States?

             (b) Lockbox review question #4d,e & f - Why are
these questions only asked for lockbox States; why not ask
the same questions of non-lockbox States?
Answer:   (a) & (b) RQC agrees. We will revisit these
Systems Review questions and add appropriate questions for
non-lockbox states.

Tax Function:   CASHIERING
Problem Type:   Acceptance Sample


Question 4.   There is no date on the Quality Appraisal
Worksheet to which to compare the "date of receipt". QA
uses the "date check received" to measure the time it takes
the SESA from the date it receives the payment to the date
it deposits it. If a SESA does not start its late date
clock from that date, the date has no meaning for the RQC
Sample.

Answer:   During the voluntary implementation, SESAs were
instructed to use the QA sample for the Cashiering
Acceptance Sample. QA will not be conducted after the
October, 1994 - January, 1995 review; therefore, new
acceptance sample instructions are under development. Until
these instructions are finalized, we will not be able to
furnish you with a definition of "date of receipt" for
Cashiering. RQC will be working with the Contribution and
Fund Management Group to define the instructions for this
acceptance sample. (The RQC group has assumed that "date of
receipt" would be the actual date check was received by
SESA, e.g., by field auditor, in local office, in central
office, etc. This decision has yet to be finalized.)

Note: For Report Delinquency, "Date of receipt" or "timely
received" is explained in Report Delinquency Computed
Measures. (Handbook, Chap. V-2.) There is also a Q&A in
Report Delinquency (Computed Measures, question 12) in this
compilation which addresses the issue.

Question 5. The Cashiering A/S Coding Sheet should have a
column added for "$ amount of check".

Answer:   RQC agrees, and will add such a column to the
coding sheet when Cashiering A/S is redesigned.

Tax Function:   REPORT DELINQUENCY
Problem Type:   Computed Measures

Question 11.   If you call a delinquent employer and fill
out the report over the phone, is this considered a
"secured" report or an assessment (which falls in the
"resolved" report category)?


Answer: If the wage information received over the telephone
is from an active employer, some SESAs may consider it a
"secured report"; in other States, reports obtained by
telephone may be considered as assessments. Individual SESA
procedures (for securing wage reports from active employers)
would be the governing factor in deciding in which measure
these should be counted.

The overall intent of the % of reports secured computed
measure is to ascertain SESA effectiveness in acquiring the
report information from the employer. (This can be done by
actually securing the report.)     The % of reports resolved
computed measure evaluates SESA timeliness in turning a
delinquent report into an account receivable. (This can be
accomplished by establishing a legally due and collectible
final assessment, or by determining the employer non-liable
for reporting.)


Question 12. RQC needs a definition for "date of receipt"
or clarification of "due date" for Report Delinquency
Computed Measures. There is concern for a "level playing
field" if all States do not use the same definition.

A suggested definition is: the date after which the State
can impose penalty and interest.


Answer:   RQC agrees with the proposed definition, and will
add it to the glossary in the handbook. The "due date" or
"date of receipt" for TIMELINESS would mean that all reports
received prior to the date after which the State can impose
penalty and interest would be considered timely. (This
would take into account the SESA's grace period, and
hopefully maintain a "level playing field for all SESAs.")

Tax Function:   REPORT DELINQUENCY
Problem Type:   Methods Survey


Question 1. Provide clarification as to what is meant when
we say "average number of days after the delinquent date".

Answer: The Methods Survey questions are designed to
identify effective tools and procedures. Report
Delinquency, Methods Survey question A. Notification
Methods, 1.(a.) seeks to identify the approximate number of
days after the delinquent date that the written notices are
mailed. This attempts to identify the time period that is
shown to be most effective in collecting delinquent reports
or monies.


Question 2.   Why is this question asked: "Does this SESA
provide return envelopes with pre-printed employer account
numbers on them?

Answer: The SESA may elect to reference an account number
or an algorithm on the envelope that is mailed to the
employers when the quarterly contribution reports are sent
to the employers for their quarterly filing requirements.
This tool is to assist in the identification of the
employer, absent other information on the envelope and
validate the postmark date for timely filing of the
quarterly reports. It may also assist in the routing of the
envelope in SESAs that have separately identified series of
account number for different types of employers (e.g.,
reimbursing and contributory).

Tax Function:   COLLECTIONS
Problem Type:   Acceptance Sample

Question 7. Question 7a asks " Was a lien filed timely?"
Does the RQC reviewer have to trace a lien all the way
through the court system to answer this question?

Answer: No, tracking the recording of the lien is not
required. The reviewer should verify that the lien was
filed in accordance with SESA procedures. (e.g., If SESA
procedures require or permit the use of certified mail for
filing liens , the mail receipt (or copy) should be adequate
verification that the sample case was handled correctly. If
SESA procedures require or permit "in person" delivery of
liens to the court, acknowledgement of receipt of the lien
(the account being reviewed) by the court should be
documented in the SESA's records.


Question 8.   (a.) On the coding sheet, what exactly is
required in the "Total Amount Due"? Is it the tax due for
all outstanding accounts receivable as of the review date?

              (b.) On the coding sheet, we assume "#
Quarters with Liability" refers to all quarters for which
the employer still owes taxes at the time of the review.

Answer: (a.) The "Total Amount Due" on the coding sheet is
the amount due for all outstanding accounts receivable for
the employer at the time of the snapshot when the universe
is identified, not as of the date that the RQC sample review
takes place.   (Remember the review is to be conducted six
months after the employer was identified in the universe,
the total amount due for the employer identified may have
changed by the actual review date.)

        (b.) " # Quarters with Liability" does refer to
all quarters for which the employer still owes taxes, but at
the time the universe is identified, not at the time of
review.

Question 9. Question #1, account correctly classified as
"collectible", "uncollectible", or "in bankruptcy status"?
If there is not enough information in the file to determine
whether the account is correctly classified, the answer
would have to be "No" wouldn't it? Why is there no
"information not available" option?

Answer: The account is to be considered "collectible"
absent any documentation that places it in "uncollectible"
or "bankruptcy status". The INA (information not available)
response is purposely omitted as an option for this
question.

Tax Function:   COLLECTIONS
Problem Type:   Acceptance Sample (Continued)



Question 10. Could you give an example of when Question 3,
"Were initial written notice(s) and follow up notices sent
timely for the most recent quarter of liability"?, would be
answered "N/A"?

Answer: Question 3 would have an "N/A" answer in cases
where the sample case is of a dollar amount to meet the
universe criteria but low enough not to be included in the
SESA's procedures that require written notices and follow-
ups. An example would be accounts with less than $200.00
due which are to be collected through phone power efforts
vs. written actions.   Another example would be a SESA that
does not send out notices on one quarter of liability and
issues written notices and follow-ups only when there is
more than one quarter of liability.


Question 11.    A/S questions 5 & 6, please define "timely."

Answer: The timely filing of a lien or an assessment is
defined by the SESA. (The SESA should have collection
procedures that require a lien or an assessment to be filed
within a certain time period. The reviewer will determine
whether the lien or assessment was or was not filed within
the time frame specified by the SESA.) After several years
of data are accumulated, RQC can correlate Computed Measures
findings with high quality SESA procedures and offer
recommendations for the most effective timing of assessments
and liens.


Question 12. Question #3, VI-46 - "Were initial written
notice(s) and follow-up notices sent timely for the most
recent quarter of liability?" Define most recent quarter.

Answer: The most recent quarter is defined as the most
recent quarter of liability preceding the "snapshot date"
(which should have occurred sometime between April 1 and
June 30 of the RQC review year). NOTE: The most recent
quarter of liability may not be the first quarter of the
calendar year in which the "snapshot" is taken, it may be a
previous quarter from a prior year.

Tax Function:   FIELD AUDIT
Problem Type:   Computed Measures

Question 2.   Field audit computed measures indicator 1 -
Total Wage Change has as a numerator of total wages
underreported + total wages overreported. Should the total
underreported wages and total overreported wages for each
audit performed be netted and used for this RQC computed
measure?

Answer: No. The total underreported wages and overreported
wages should be reported separately. The ideal method is to
record the total underreported and overreported wages for
each calendar quarter. Never net the two and report the
difference. Example: First quarter of 1993 has $5,000.00
under and $1,000.00 over found. The findings should be
represented for this quarter as $5,000.00 underreported and
$1,000.00 overreported, not $4,000.00 underreported which is
the difference of the two findings. Total wage change
equals $6,000.00. The revised ETA 581 Form instructions
will also provide an example.

Tax Function:   FIELD AUDIT
Problem Type:   Acceptance Sample


Question 18.    Will the Random Audit universe be dropped?

Answer: A field audit selection process that contains any
qualifiers is not considered truly "random". It does not
appear that there are any SESAs with a selection process
absent qualifiers, if this turns out to be true then the
field audit random universe will be dropped from the RQC
design.

Question 19. In the rationale for question #5 part (3),
"Adjustment reports can be used ......". Do we need to just
see the detail by SSN or must the reviewer redo all the math
etc.?

Answer: Adjustments may be used as part of the supporting
documentation "when the reviewer can trace each individual
discovered to the resulting increases and decreases in the
total wages and taxable wages". This will not require
calculating the math of the dollar/numeric figures.


Question 20. Question 4-C, computation of total taxable
payroll, calls for the work papers to include the identity
of the payroll record used in the calculation and record of
the calculations to verify the total taxable payroll. Can
this task be omitted if the SESA has the individual wages of
the employees on the main frame?

Answer: No. The wage information on file in the main frame
data base previously filed by the employer via the
contribution report has not been audited and could be
incorrect. The auditor must compute from the employer's
records and reconcile in 4(d) to the SESA files. The
auditor may run the information obtained in the audit
through the main frame program for the calculation process,
but this is a SESA call.


Question 21. The Field Audit Rationale Section (2): - Why
does Field Auditor have to provide evidence that payments do
not constitute wages?

Answer: The information and data an auditor obtains during
the performance of an audit is the evidence that furnishes
the reason and the support for the conclusion that payments
do or do not constitute wages.

Tax Function:   FIELD AUDIT
Problem Type:   Acceptance Sample (Continued)

         For example: Bi-weekly payments are found in cash
         disbursements journal classified as "other labor",
         to individuals not shown in payroll records.
         However, further inquiry reveals that these
         payments were for services not subject under
         provisions of law (e.g. payments to licensed
         contractors, in separately established businesses
         performing services for the employer under audit).
          Documentation could be: " Three individuals found
         in category of "other labor", not subject to
         provisions of law upon review of supporting
         documentation (e.g. vendor files, contracts),
         determined non employee services and not wages."

         Without this documentation there is no support for
         the auditor's decision that the three individuals
         were not covered employees.


Question 22.   Do auditors have to look at all 1099's or
just a sampling?

Answer: All 1099's must be reviewed to ensure that payments
for services are identified. Expanding on Field Audit Q &
A's Acceptance Sampling Question #14 (in attachment III of
UIPL 16-94), 1099's which have been categorized into
separate types may be documented as groups in lieu of being
individually detailed, provided the auditor determines there
is credibility in this method. Example: Auditor after
categorizing the 1099's may document by stating 15 1099's
were for dividends and 25 1099's were for interest.


Question 23. Please clarify question # 9 which asks: "If
discrepancies or unreported wages and tax were found, or a
credit is established was the adjustment (monetary or non-
monetary) posted in accordance with the SESA requirements?
If the audit is under appeal, adjustment reports should be
made in accordance with SESA policy."

Tax Function:   FIELD AUDIT
Problem Type:   Acceptance Sample (Continued)

Answer: Establishing a system to ensure the proper
accounting of audit results is an important component of a
SESA's tax operation. The SESA has a fundamental obligation
to guarantee the accuracy of the posting to ensure the
employer is given the correct tax rate; that subsequent
billings are correct, and that the collection unit is
provided with timely information to process indisputable
legal documents. This information may be monetary or not.
Any discrepancies found in the audit that are material to
the current or future tax payments of UI tax , should be
adjusted/corrected. Documentation should include the
identification of the discrepancy and evidence that the
appropriate action was taken to correct the employer's files
and compared to the SESA's records.

Examples of non-monetary discrepancies discovered in the
audit would include: change of ownership of the business,
change in partners of a partnership, change of officers in a
corporation and change of address.

Question 24. Does the Field Auditor have to compare
employer's total wages to the UI contribution report with
the employer records on the SESA's automated system record?
Answer: Yes. Field audit question 4.b, reconciliation of
total payroll to total wages rationale states..."Work
paper(s) must show that the auditor compared a payroll
record (which was established as correct through
verification of the payroll posting system) to the total
wages on the UI contribution report, and to the amount
posted to the SESA's records." The audit documentation must
show that the employer account with the agency contains the
actual information submitted by the employer on the
employer's contribution report. The distinction is
important to prove that information keyed into the
employer's record accurately reflects information shown on
the contribution report. The rationale of 4b. is to provide
reasonable assurance that the employer payroll system is
credible and reliable. Therefore, both the employer's copy
of the contribution report and the SESA's records must be
reviewed either manually or by computer programs.

Tax Function:   FIELD AUDIT
Problem Type:   Acceptance Sample (Continued)

Question 25. What are acceptable procedures for verifying
ownership on a domestic account? Personal income tax
return? 942 report, Federal UI tax report?

Answer: It is permissible to use personal income tax
returns and 942 reports to establish ownership in a domestic
account along with "other sources".   Examples of "other
sources" may be: review of the cancelled checks or personal
interview with the domestic employee. Absent these
documents, other sources of verification in accordance with
State audit procedures should be relied upon.
Question 26. In cases of multiple payroll systems, do you
have to verify each system?

Answer: Yes. Employer's who operate (stand alone) multiple
payroll systems must be individually verified. Employers
with payroll systems that correlate the stand alone
information from each payroll into a summary record/ledger
may use such record in the performance of this task in the
cases where the required information is available to meet
the requirements for this verification function. The audit
must contain documentation that establishes the reliability
and credibility of the employer's reported payroll.   The
four tasks should be conducted and complete with the
information required for each.

Tax Function:   FIELD AUDIT
Problem Type:   Other


Question 5.   Can blocked claims, delinquent reports and
status assignments that are converted to "audits": 1. be
counted as audits and included in ETA 581 reports and 2. be
included in the audit universe for RQC?

Answer: Assignments issued to resolve report and money
delinquencies, blocked claims, and status assignments should
not be routinely converted or expanded to audits. If
circumstances indicate problems or conditions not apparent
when the assignment was made, then expansion of the
assignment to include an audit may be warranted and should
ensure the four quarter minimum scope requirement is
complied with.
One fundamental factor in these cases is the status of the
entity being examined, at the time of the contact. In
general, if the entity is an established, properly
registered employer, any field auditor contact to bring the
account current in any UI aspect may be expanded to include
an audit, if conditions warrant under established State
procedures.   The auditor's report would reflect the initial
purpose for contact and the justification for conversion to
an audit. An assignment to obtain data to establish or
confirm whether or not the entity is an "employer" cannot be
expanded to include an audit.

If the audit meets the above circumstances, it should be
counted as an "audit" for ETA 581 and be included in the RQC
universe of audits.

Tax Function:   BENEFIT CHARGING (Account Maintenance)
Problem Type:   Acceptance Sampling

Question 5.   At one time we were advised to delay working
on the Account Maintenance Function for Benefit Charging.
What is the current situation with this portion of the RQC
Program design?

Answer: This portion of Core RQC will be implemented at the
same time as the rest of RQC. (See UIPL-25-93 April 30,
1993, which announced several options for assessing charging
accuracy. UIS' decision was to implement the A/M Benefit
Charging segment as proposed in Core RQC, option # 1, at
least until some experience is gathered by RQC reviews.)

The possibility of delay arose from a question of a
separate, more extensive (and more expensive) program for
the accuracy of Benefit Charging. The other program was
delayed pending results of the Benefit Charging section of
RQC.

The current Benefit Charging section of Account Maintenance
for Core RQC will be the accepted methodology for assessing
this tax function. (The decision was made to study the
findings for several years using the review as it is now in
the RQC Handbook.)

Tax Function:   EMPLOYER TAX RATES(Account Maintenance)
Problem Type:   Acceptance Sampling


Question 6. Can computer records of the contribution report
forms be used to review the tax rate sample or must we
secure copies of the actual report submitted?

Answer: You need to get as close to the original
information as reported by the employer as is feasible and
any intervening processing of the information may obscure
the original data.

An imaged copy is an actual copy so these may be used. Use
of other computerized records must be dealt with on a State-
by-State basis. Please contact your regional representative
if you are interested in using computer records in lieu of
copies of the actual reports.

Note: In general, 1) the computerized records must
accurately reflect what was actually shown on the report
form; 2) the figures must actually be recorded on the data
base (as opposed to being calculated from other figures on
the data base); 3) the fields must have edits to prevent any
overwrite or any other method of changing those fields, and
4) Regional Office approval must be secured.