Tax Performance System

CHAPTER V

REPORT DELINQUENCY

COMPONENTS

INTRODUCTION
COMPUTED MEASURES
PROGRAM REVIEW

INTRODUCTION

ET HANDBOOK NO. 407
TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

INTRODUCTION

The Report Delinquency function consists of the efforts to assist employers to comply with
State laws and regulations for employment reporting, and to resolve delinquent reports. The
major tasks are:

Identify delinquent employer accounts
Notify delinquent employers
Resolve delinquency by securing reports, determining non-liable,
or assessing estimated monetary liability

PRIMARY OBJECTIVE

The primary objective of the Report Delinquency function is to promote compliance with State
reporting requirements and secure delinquent reports timely. To accomplish this, the Report
Delinquency function will need to meet two sub-objectives:
Increase the percentage of employers filing quarterly reports by promoting
voluntary compliance (Completeness)
Take all reasonable actions to secure delinquent reports within an acceptable
time period (Timeliness and Completeness)

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INTRODUCTION

PRIMARY OBJECTIVE

Timeliness
and
Completeness

To assess State effectiveness in promoting employer compliance,
and in securing delinquent reports, Computed Measures will be
generated based on data routinely reported by States. These data elements
will be converted into six indicators by the TPS ADP system.
To determine whether the State is taking all reasonable actions to
secure/resolve report delinquencies, a Program Review will be conducted to
ascertain the existence of necessary internal controls and to determine
whether or not such controls are functioning properly.

REVIEW METHODOLOGIES

Computed Measures
Computed Measures will provide indicators to measure how effective the State is in securing
delinquent reports timely and in resolving delinquent reports. There are three indicators which will
be used to measure contributory employers and the same three indicators will be used to measure
reimbursing employers:

A. Percent of reports filed timely.
B. Percent of reports secured by the end of following quarter.
C. Percent of reports secured plus delinquencies resolved within 180
days (i.e., two following quarters)

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

INTRODUCTION

REVIEW METHODOLOGIES

Program Review
The Program Review to be conducted for Report Delinquency has two components: a Systems
Review and an Acceptance Sample.

The Systems Review covers the following topics:
Recorded Information and Instructions
Training
Recording of Transactions and Events
Systems to Assure Execution of Events
Review of Completed Work

The Systems Review will be used to identify the internal controls and quality assurance systems
necessary for an effective Report Delinquency operation and to verify if the State has such controls
in place.

The Acceptance Sample examines the following:
Employer Accounts Identified as Delinquent

In conjunction with the Systems Review, Acceptance Samples of delinquent report notices will be
examined to confirm that the States system of controls is ensuring proper and timely delinquent
report processing.

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CHAPTER FIVE

COMPUTED MEASURES

COMPUTED MEASURES

Computed measures will provide indicators for how effective the State is in securing delinquent
contribution reports timely and resolving delinquent wage reports. These measures will be generated
based on data elements reported by States through routine quarterly reports. Upon implementation
of the TPS program, the TPS reviewer must ensure that the State ADP system captures these data
elements as defined so that the ADP system can produce output reports based on these elements.
Whether the State accumulates the data elements required for delinquency computed measures
through ADP or manually, it is important that the records be maintained from the beginning. Upon
full implementation of TPS, data for delinquency indicators will replace the data reported on the
ETA 581 for this function. The plan is to gather the data needed from the system used to
electronically report the current ETA 581 data. Appendix B explains the technical process for
gathering this information.

Report Delinquency Indicators

The six indicators to measure how effective the State is in securing delinquent reports timely and
resolving delinquent reports are described below:

For Contributory Employers

1.

Percent of reports filed timely.

2.

Percent of reports secured by end of following quarter.

3.

Percent of reports secured plus delinquencies resolved within 180 days (i.e.,
two following quarters).

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COMPUTED MEASURES

COMPUTED MEASURES

For Reimbursing Employers

4.

Percent of reports filed timely.

5.

Percent of reports secured by end of following quarter.

6.

Percent of reports secured plus delinquencies resolved within 180 days (i.e.,
two following quarters).

Indicators 1 & 4 - Timely Employers (Contributory & Reimbursing)
(The percent of employers filing reports timely).

Rationale. This indicator reflects the percent of voluntary reporting compliance. It is
intended to provide a measure of State efforts to promote voluntary filing through effective
publications/forms, educational programs and/or utilization of enforcement tools. Timely
reports include all reports filed on or before the delinquent date established by the State for
the calendar quarter.

Formula.
The average number of contributory/reimbursing employers filing
reports timely for four (581) report quarters .
The average number of active contributory/reimbursing employers for
four (581) report quarters ending one quarter earlier

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COMPUTED MEASURES

COMPUTED MEASURES

Data Elements.
The number of employers filing reports timely is reported on the ETA 581, item #6
for contributory employers and item #9 for reimbursing employers.
Active employers are those employers registered and required to file reports under
the State unemployment compensation law. The number for each quarterly period
should be the same as currently reported on form ETA 581. The average of the four
581 report quarters is used because reporting is based on timely reports for the
quarter ending one quarter earlier.

Indicator 2 & 5 - Secured Reports (Contributory & Reimbursing)
(The percent of quarterly reports secured by the last day of the following quarter).
Rationale. This indicator measures the percent of employer reporting compliance by the
level of secured reports for the preceding quarter. The "secured" definition combines
voluntary employer reporting and State-influenced reporting. It excludes report
delinquencies which are resolved by assessment, thereby maintaining emphasis on employer
compliance and on the effect of State efforts to secure delinquent reports. This indicator is
similar to the one used by Quality Appraisal as a DLA for Report Delinquency, and when
analyzed with Indicator (1), Timely Employers, it should be possible to determine the
effectiveness of State reporting enforcement efforts.
Formula.
The average number of contributory/reimbursing employers whose reports had
been secured by the last day of the four (581) report quarters
.
Average number of active contributory/reimbursing employers for the four (581)
report quarters ending one quarter earlier
Data Elements.
The number of employers whose reports have been secured by the last day of the following quarter
is reported on the ETA 581, item #7 for contributory and item # 10 for reimbursing.
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COMPUTED MEASURES

COMPUTED MEASURES

The number of employer reports secured for the quarter are the number of
contributory employers, or the number of reimbursable employers who by the end of
the next quarter had submitted contribution reports which were due for the preceding
quarter. An example would be an employer who did file a report for the first quarter
by June 30, this employer would be included in the secured count for this indicator.
Employers who have been issued estimated assessments for contributions due or for
whom substitute contribution reports may have been generated or are found to be no
longer liable, are not considered as secured.
The number of active employers is the same as Indicator 1.

Indicator 3 & 6 - Resolution of Report Delinquencies (Contributory & Reimbursing)
(The percent of reports secured plus delinquencies resolved by the last day of the
second reporting period (i.e., within 180 days of the quarter ending date, or within
180 days of the date delinquency discovered for newly established accounts).

Rationale. To effectively manage accounts receivable it is important that amounts
determined to be due are established on a timely basis. This indicator is intended to bridge
the gap between Report Delinquency and Collections, and in effect is an indicator of "tax
report delinquency" resolved via establishing a legally due and collectable amount due.
Considering that for most States reports are delinquent if not filed within 30 days after the
quarter ending date, and adding an additional 150 days (i.e., 60 days of the following quarter
plus the 2nd following quarter), 180 days was selected as a reasonable goal for resolution of
report delinquencies.

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COMPUTED MEASURES

COMPUTED MEASURES
Formula.
The average number of contributory/reimbursing employers whose report
delinquencies were resolved within 180 days (two quarters)
for four (581) report quarters
.
Average number of active contributory/reimbursing employers for the four
(581) report quarters ending two quarters earlier

Data Elements.
The number of employers whose report delinquencies were resolved within 180 days
of the quarter ending date is reported on the ETA 581 as item #8 for contributory
employers and item #11 for reimbursing employers.
NOTE: Report Delinquencies are to be considered resolved upon securing reports,
determining non-liable for reporting (e.g., the employer was found not to be subject,
or the State decided to inactivate an active employer, or to "write off" the employer's
delinquency status), or establishing a "final" assessment that is legally due and
collectible. "Final" assessments are to be reported as Amounts Determined
Receivable.
The number of active employers is defined the same as for Indicators 1 and 2.
Because reporting is for the number of report delinquencies resolved within 180 days
(six months), the average number of active employers is the four quarters ending two
quarters earlier.

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

COMPUTED MEASURES

COMPUTED MEASURES

Drawing Conclusions
An analysis of the results of Report Delinquency Computed Measures will provide the TPS reviewer
with an indication of how effective the State is in promoting voluntary filing and in resolving report
delinquency. The first and fourth indicators show the overall level of employer compliance in the
State, for contributory and reimbursing employers, the second and fifth indicators show the
combined effect of voluntary compliance and State-induced compliance. The third and sixth
indicators combine voluntary compliance, the delinquency unit's impact, and the State's use of other
methods to resolve delinquencies such as assessments or determinations of non-liability for
contributory and reimbursing employers.
The reviewer should be able to make observations as a result of these indicators that would be
reflected in the Systems Review. For example, the reviewer would expect that if the State had a
high percentage of voluntary compliance in report filing this would be reflected by some exemplary
practices. Likewise, if the number of reports resolved was low the TPS reviewer may find areas of
risk in the Systems Review which are causing the problem.
Findings or trends from computed measures should be considered with Systems Review and
Acceptance Sample findings in evaluating the effectiveness of the State's operations and be included
in the Annual Report.

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PROGRAM REVIEW
COMPONENTS
SYSTEMS REVIEW
ACCEPTANCE SAMPLES

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SYSTEMS REVIEW

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ET HANDBOOK NO. 407
TAX PERFORMANCE SYSTEM

CHAPTER FIVE

REPORT DELINQUENCY

PROGRAM REVIEW

SYSTEMS REVIEW INTERVIEW SHEET

Function

Reviewer

Persons Interviewed
Date

Name:

Documents Reviewed
Title:

Title:

Form#:

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ET HANDBOOK NO. 407
TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW

Recorded Information and Instructions

Recorded information and instructions for maintenance of delinquent employer accounts
should include the means by which delinquent accounts are identified, the conditions under
which the employers should be notified, and the resolution of such delinquencies.

The reviewer should examine recorded instructions available to the staff and
compare procedures to the laws and written policies of the State to determine
if the recorded information and instructions are current, accurate, and
complete. The reviewer should also observe the delinquent report process
and talk with employees to learn whether or not the recorded instructions are
available and being used.

In the narrative section following the questions, explain any "N/A"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section. If there are no
recorded instructions, describe in the narrative how the staff becomes aware
of the proper procedures to perform the tasks of the Report Delinquency
function.

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEM REVIEW QUESTIONS

1.

Does the State have recorded instructions to help staff process delinquent employer
information in accordance with State laws and written policies?
Yes

2.

If yes, are the recorded information and instructions:

a.
b.
c.
d.

Yes No
Current? .....................................................................................................................
Accurate? ...................................................................................................................
Complete? ..................................................................................................................
Readily available to staff?..........................................................................................

VS:(Questions 1 and 2

3.

No __

)

If any of the preceding evaluative questions were answered
"No", does the State have a substitute or compensating control?
Yes

No

N/A __

If Yes, describe in the Narrative Section following these questions.
VS:(Questio 3

)

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW NARRATIVE

Question
Number

Explanation of "N/A" and "Compensating Controls"
(when deemed necessary)

Question
Number

Answers to "If yes, describe" and "Other":

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW

Training

The State needs to have systems and procedures to identify training needs and deliver training
to employees who perform duties within the Report Delinquency function. New employees
need to learn the procedures for processing and recording delinquent reports. Existing
employees benefit from periodic refresher courses and additional training when procedures
change and/or quality defects occur at an unacceptably high rate.

The reviewer should respond to the following questions after discussing with
management the training systems used for Report Delinquency staff, and
examining the training packages utilized.

In the narrative section following the questions, explain any "N/A"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section. If there are no
formal training systems, then describe how the staff knows the laws and
written policies and the proper procedures to perform the Report
Delinquency function duties.

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

1.

Does the State have methods or procedures to provide training for newly hired employees?
Yes

No __

*If yes, identify the type of training:

a.
b.
c.
d.
e.

Yes No
*Formal Classroom Training? ...................................................................................
*On the Job Training?................................................................................................
*One-on-One Training? .............................................................................................
*Individual Self-guided Training?.............................................................................
*Other?.......................................................................................................................

Describe the type and frequency of training in the narrative.

2.

Does the State have methods or procedures to provide refresher training for experienced
employees?
Yes

No __

*If yes, identify the type of training:
Yes No
a.
b.
c.
d.
e.

*Formal Classroom (e.g., refresher courses)? ...........................................................
*On the Job Training?................................................................................................
*One-on-One Training? .............................................................................................
*Individual Self-guided Training?.............................................................................
*Other?.......................................................................................................................
Describe the type and frequency of training in the narrative.

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

3.

Does the State provide training when there are:
Yes No N/A
a.
b.
c.

d.
e.*

4.

State law changes? .....................................................................................................
Policy/procedure changes? ........................................................................................
Needs identified from review of finished
work (e.g., supervision, quality assurance
review)? .....................................................................................................................
Hardware/software changes? .....................................................................................
Other?.........................................................................................................................

Does the State have processes (e.g., back-up training or organizational flexibility) to assure
that staff absences will not disrupt operations?
Yes

No __

If yes, describe in the Narrative Section.
VS: (Questions 1-4

)

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

5.

*In the opinion of the supervisor or manager, does the training meet the needs of the Report
Delinquency function? (e.g., Are sufficient resources available--training packages, facilities,
staff, etc.)
Yes

6.

No __

If any of the preceding evaluative questions were answered "No", does the State have a
substitute or compensating control?
Yes

No

N/A __

If Yes, describe in the Narrative Section following these
questions.

VS:(Question 6

)

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW NARRATIVE

Question
Number

Explanation of "N/A" and "Compensating Controls"
(when deemed necessary)

Question
Number

Answers to "If yes, describe" and "Other":

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW

Recording of Transactions and Events

The Report Delinquency function should have procedures and controls to assure that
notifications, enforced and/or stayed delinquency resolution action (such as subpoenas, court
orders and final assessments) are recorded. The source information should be readily
available for examination. Whether the State system is manual or automated, an audit trail
should lead from the Report Delinquency data recorded in the employer account record to the
information source upon which the Report Delinquency action was based.

The reviewer should become familiar with the various types of Report
Delinquency actions which require an audit trail leading to the supporting
documentation.

In the narrative section following the questions, explain any "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section. If the State does not
maintain source documents or an audit trail, describe how it assures that
correct/appropriate Report Delinquency actions have been taken.

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

1. Does the State have procedures to assure that all enforced and/or stayed Report Delinquency
actions can be traced to a source document (e.g., subpoenas, assessments, and court orders)?
Yes
2.

Can the following be identified through the audit trail:
a.
b.
c.
d.
e.

Yes No
When and how the employer was contacted
to secure the delinquent report? .................................................................................
Enforced or stayed delinquency resolution actions
taken? .........................................................................................................................
Date enforced or stayed delinquency resolution
actions were initiated? ...............................................................................................
Whether money was received with the delinquent
report? ........................................................................................................................
The date the delinquent report was received?............................................................

VS:(Questions 1 – 2

3.

No __

)

In those instances when the staff resolves a delinquent report without money does the State
have a procedure that assures enforced collection action can be initiated?
Yes

VS:(Question 3

No __
)

SYSTEMS REVIEW QUESTIONS
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TAX PERFORMANCE SYSTEM
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4.

CHAPTER FIVE

PROGRAM REVIEW

Are information sources retained and accessible for State use?
Yes

VS:(Question 4

5.

No __
)

If any of the preceding evaluative questions were answered "NO" does the State have a
substitute or compensating control?
Yes

No

N/A ___

If Yes, describe in the Narrative Section following these questions.

VS:(Question 5

)

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW NARRATIVE

Question
Number

Explanation of "N/A" and "Compensating Controls"
(when deemed necessary)

Question
Number

Answers to "If yes, describe" and "Other":

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REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW

Systems To Assure Execution of Events

For Report Delinquency, controls should be built in to assure the execution of events for
processing delinquent employer account information. Such controls may include automated
or manual checks of active employer accounts to accounts for which contribution reports have
been received, and program checks to assure that delinquent employers are properly
identified, and that delinquency notices are mailed in a timely manner.

The reviewer should become familiar with the various systems used by the
State to assure execution of events for processing delinquent employer
account information.

In the narrative section following the questions, explain any "N/A"
responses, and "Compensating Controls". Identify the question being
explained by referencing the number and section. If the State does not have
internal controls or safeguards, describe how it assures that delinquent
employers are properly identified and notified.

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

1.

Does the State have procedures and/or internal controls to assure that delinquent employers
are properly identified?
Yes
a.

*If yes, is there an automated system indicator to identify accounts that are
delinquent?

(1)

Yes

No __

Yes

No __

If yes, is a system check performed every time a
program is changed?

VS:(Question 1

2.

No __

)

Does the State have a method to confirm the accuracy of the number of delinquent accounts
identified (e.g., compare the number of active accounts against the number of reports
processed, or total the number of employers that filed timely with the number of
delinquency notices printed and compare it to the number of active employers on the same
date )? If yes, describe in the narrative section.
Yes

No __

Yes

No __

a. If yes, does the State resolve discrepancies found?

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

3.

Does the State have procedures and/or internal controls to assure that delinquent employers
are properly notified?

a.

Yes

No __

Yes

No __

Yes

No __

*If yes, is the procedure for issuing delinquency notices automated?

(1)

If yes, is a system check performed every time a
program is changed?

VS:(Question 2 & 3

4.

)

Is there a method to suppress delinquency notices in cases of contested coverage?
Yes ___ No ___

5.

Is there a method to suppress delinquency notices for accounts that have unprocessed
contribution reports "in house"?
Yes

VS:(Question 4 & 5

No __

)

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

6.

Is there a method to identify and control those delinquent employers in bankruptcy to assure:
Yes No
a.
b.
c.

Reports are secured in sufficient time to file
a claim for the taxes due? ..........................................................................................
Those employers continuing in business are
monitored to ensure reports are filed timely? ............................................................
Upon bankruptcy being closed, are unresolved
delinquencies reassigned for further action? .............................................................

VS:(Question 6

7.

)

Does the State have procedures and/or internal controls to assure that follow-up actions are
taken to obtain prior quarter delinquencies that are identified during current quarter
processing?
Yes

VS:(Question 7

No __
)

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CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

8.

Does the State have controls which assure that staff resolve delinquent reports within
specified time periods?
Yes

VS:(Question

9.

8

)

Does the State have procedures that provides notification to the appropriate staff members
when a delinquent report is received?
No
N/A __
Yes

VS:(Question 9

10.

No __

)

If any of the preceding evaluative questions were answered "No", does the State have a
substitute or compensating control?
Yes

No

N/A __

If Yes, describe in the Narrative Section following these questions.

VS:(Question 10

)

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW NARRATIVE

Question
Number

Explanation of "N/A" and "Compensating Controls"
(when deemed necessary)

Question
Number

Answers to "If yes, describe" and "Other":

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CHAPTER FIVE

PROGRAM REVIEW

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REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW

Review of Completed Work

For the Report Delinquency function, supervisory and/or quality assurance reviews are
necessary to ensure that system procedures and internal controls used in identifying and
notifying delinquent employers are working, and that records of report delinquency resolution
activities are being maintained.

A review of completed work should be done on a regular basis for all staff
members involved in processing delinquent employer account information.
This review may be done on an individual basis for each staff member, or by
sampling work done throughout the entire unit. The following questions are
designed to determine how these reviews are conducted.
The reviewer should become familiar with the kind of review program the
State uses to assess the work performed by the Report Delinquency function.
In the narrative section following the questions, explain any "other"
responses. Identify the question being explained by referencing the number
and section. If there is no review performed, describe how the State has
reasonable assurance that delinquencies are being properly identified,
notified, and resolved.

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For staff members involved in the Report Delinquency process, are the following components subject to some form of systematic review? For
Yes answers enter a "Y" in the appropriate column(s). For Yes answers, also enter "Y" in column 6. If there are no reviews, answer "N" for
No in column 6. Column 6 is the only evaluative question.
Type of review
Component

a.

That the delinquent employer is being contacted timely?

b.

That a history of report delinquency resolution activities is
being maintained?

c.

That State report delinquency enforcement tools are being
appropriately utilized?

d.

That multiple quarter delinquencies are being worked toward
being resolved.

e.

That specific requests (e.g., subpoena request, employer
account updates, written requests for assistance, or notices of
bankruptcy) are acted upon timely?

VS:

(Question
6
*Informational

*1
Supv

*2
Peer

*3
QR
(Qual.
Rev)

*4
Support
Clerical

*5
Other

6
Review
ConductedY/N

)

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

7.

If any of the preceding evaluative questions are answered "No", does the State have a
substitute or compensating control?
Yes

No

N/A __

If Yes, describe in the Narrative Section following these questions.

VS: (Question 7

)

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW NARRATIVE

Question
Number

Explanation of "N/A" and "Compensating Controls"
(when deemed necessary)

Question
Number

Answers to "If yes, describe" and "Other":

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

SYSTEMS REVIEW QUESTIONS

ADDITIONAL CONTROLS
1.

*Does the State have internal controls or quality review systems
in the Report Delinquency function which this review failed to identify?
Yes

No __

Yes

No __

If yes, describe below:

2.

*Are there any exemplary practices for the Report Delinquency
function?

If yes, describe below:

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ACCEPTANCE SAMPLES

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CHAPTER FIVE

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ACCEPTANCE SAMPLE INSTRUCTIONS

Purpose/Intent

To determine if the State accurately identifies delinquent
employer accounts.
To assure that delinquent employers are notified properly.
To determine if the State takes appropriate action to resolve
delinquencies.

Scope

The scope of the review will focus on those employers who
are currently delinquent for the first quarter (prior quarter
delinquencies are not to be included.)

Universe

The universe to be identified for the Report Delinquency
Acceptance Sample will include:
1.

Employers whose delinquency is newly established
for the 1st calendar quarter during the *processing
period.

2.

All accounts identified as delinquent once the State
has passed its delinquency cut off date (both
contributing and reimbursing employers).

3.

Select 60 cases, or if universe is small, select the
number of cases based on Table in Appendix A-III.

Note: *The processing period is the State time period during which the quarterly reports and
contributions are processed.

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Timing/Frequency

The universe will be identified once per calendar year.
The universe should be identified prior to mailing first quarter
report delinquency notices.
The sample should not be selected until the fourth quarter
(approximately Nov.-Dec.), and review should not begin
before November 15th of the calendar year being reviewed.

Sampling Procedures

The following steps must be taken to establish the universe and select
the sample accounts:

1.

List or identify the location or create a transaction file
of accounts that are determined to be delinquent.

2.

Identify the population of delinquent employers after
the quarterly processing period has ended for the 1st
calendar quarter. (Approximately May 15)

3.

During the 4th quarter (Nov. - Dec.), select the
sample of 60 accounts from the population identified
after the end of the 1st quarter processing cycle.

4.

The sample should be selected just prior to
conducting the review. The review should be
completed no later than December 31.

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

ACCEPTANCE SAMPLE INSTRUCTIONS

Sampling Procedures
cont.

Reviewing Samples

5.

If the system is automated, the Reviewer must
work closely with the ADP unit to ensure a thorough
understanding of what, when and how the samples should be
selected.

6.

Appendix A describes what action needs to be taken for
sampling both manual and automated systems.

Assemble the following information for each of the cases
selected for review:
1.

A copy of the delinquent employer notice or
information taken from the ADP file that is similar to
that on the original notice (e.g., employer name,
account number, address
and quarter/year
delinquent).

2.

The employer's account information in the State's files
relative to reporting liability.

Compare all source documents for the sample account with
the information shown on the employer's master file.

To answer question #1 the reviewer will need to know what
cut off date the State used. The reviewer will then compare
the date the employer's wage report was received by the State
against the cut off date to ensure it was properly identified as
delinquent.

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

ACCEPTANCE SAMPLE INSTRUCTIONS

Reviewing Samples
For purposes of answering question 2b. "suppressed"
refers to a restrictive action taken by the State that
intentionally prevents a normal work flow from being
completed (e.g., not mailing a delinquency notice to an
employer due to a pending appeal, or an employer that is in
bankruptcy and State procedures that do not allow notices to
be mailed).

Drawing Conclusions

Using this information, answer the questions on the Acceptance
Sample Questionnaire.

The following questions are evaluative:
1.
2.a

Proper identification of delinquent employer.
Was the delinquent notice for the correct quarter and
year.

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CHAPTER FIVE

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ACCEPTANCE SAMPLE INSTRUCTIONS

Drawing Conclusions
cont.

2b.

Was the notice suppressed in accordance with State
procedures.
3.
Appropriate State staff notified.
4.b(1) Was the assessment filed timely.
5.
Appropriate action taken to resolve delinquency in
accordance with State procedures.
A "No" answer to question #1, 2a, 2b, 3, 4b(1) or 5 means the
sampled report delinquency case was not handled correctly
and is not considered acceptable.

Of the 60 cases, if three or more are found to be
unacceptable, then the reviewer must conclude that the State
does not have reasonable assurance that employers are being
properly identified and notified as being delinquent or that
such delinquencies are being resolved in accordance with
State procedures.
For all unacceptable cases, the reviewer must provide an
explanation for the unacceptable case on the Acceptance
Sample Explanation Sheet.

Documentation

All source documentation (gathered to review samples) must
be kept until the completion and Regional Office approval of
the Annual Report. Either hard copy documentation or (in
some highly automated systems) the ability to recreate the
identical information used in the review must be maintained.

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

ACCEPTANCE SAMPLE QUESTIONNAIRE
Identification
1. Based on the available information by the review date,
did the State identify the employer's
account properly as being delinquent?

Yes

No ___

If “Yes”, answer questions #2-#5.
If “No”, skip #2 and #3, and answer #4 and #5.

Notification
2.

Did the State issue a delinquent report notice?
Yes

No ___

Yes

No ___

If “Yes”, answer 2a.
If “No”, answer 2b.
a.

b.

Was the delinquent notice for the correct quarter\year?

Was the notice suppressed in accordance with State procedures?
Yes

No

____
3.

Were appropriate State staff notified, in accordance with established procedures, that the
employer was delinquent (e.g., Field Staff, Delinquency Unit Staff or the Assessment Unit
Staff)?
Yes

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TAX PERFORMANCE SYSTEM
REPORT DELINQUENCY

CHAPTER FIVE

PROGRAM REVIEW

ACCEPTANCE SAMPLE QUESTIONNAIRE

Resolution of Delinquency

4.

*Was the report delinquency resolved?
Yes

No ___

If “Yes”, was the delinquency resolved by:
Yes No N/A
*a.
*b.

*c.
*d.

*e.
*f.

securing a contribution report? ..................................................................................
assessing taxes for the delinquent quarter?................................................................
(1)
If yes, was the assessment made within
the time period prescribed by the State?........................................................
inactivating the account? ...........................................................................................
posting the report, which had previously
been posted to an incorrect account number,
to the correct account number? ..................................................................................
changing the liability effective date?
other? .........................................................................................................................
Describe

5.

Was appropriate action taken to resolve the report delinquency
in accordance with State laws and policies?
Yes

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TAX PERFORMANCE SYSTEM

Report Delinquency Sample Coding Sheet
State: ________________ Period Covered: _______________ Date: ______________ Reviewer: _______________________
Sample Type:
Case
Number

Employer
Identification
Number

1

2

2a

Questions 1, 2a, 2b, 3, 4b1, and 5 are evaluative.

2b

Acceptance

3

4

4a

Expanded

4b

4b-1

4c

4d

4e

4f

5

Pass/Fail
Y/N

Total Acceptable _______ of _______
Page _______ of _______

TAX PERFORMANCE SYSTEM

Report Delinquency Sample Explanation Sheet
State: _________
Case
Number

Period Covered: ______________
Sample Type:

Employer
Identification Number

Date: ________________
Acceptance
Expanded

Reviewer: ____________________

Explanation

Page _______ of _______

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