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pdfCHAPTER VIII
ACCOUNT MAINTENANCE
COMPONENTS
INTRODUCTION
PROGRAM REVIEW
INTRODUCTION
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
INTRODUCTION
The Account Maintenance function involves receiving, processing and producing data from
other units within the tax program. The following are some of the tasks included in Account
Maintenance:
Receive status determinations (new and successor changes)
Process quarterly contribution reports
Establish and issue debit and credit notices
Charge or non-charge employer accounts for benefits paid
Produce employer charge notices periodically
Produce employer tax rate notices
PRIMARY OBJECTIVE
The primary objective of the Account Maintenance function is to maintain employer accounts
accurately and timely. To accomplish this, the Account Maintenance function will need to achieve
four sub-objectives:
1.
Maintain employer status information accurately (Accuracy)
2.
Maintain quarterly contribution information accurately and timely
(Accuracy and Timeliness)
3.
Maintain accuracy in benefit charging (Accuracy)
4.
Maintain employer experience rating information accurately (Accuracy)
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INTRODUCTION
Accuracy
To determine the accuracy of State Account Maintenance operations, 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. Due to the complexity of the Account Maintenance
function and the likelihood that various portions of the function are
performed by different units in the State, the review has been divided into the
following five components: (1) Contribution Report processing, (2)
Employer Debits/Billings, (3) Employer Credits/Refunds, (4) Benefit
Charging, and (5) Employer Tax Rates.
Timeliness
To assess State effectiveness in processing quarterly contribution information
timely, the Acceptance Sample for delinquent reports will ascertain whether
or not the report was identified properly as being delinquent (e.g, a
contribution report which was received timely but was not processed timely,
would be erroneously identified as being delinquent).
REVIEW METHODOLOGIES
Program Review
The Program Review to be conducted for the Account Maintenance functions has two sections, 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
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REVIEW METHODOLOGIES
Program Review cont.
The Systems Reviews will be used to identify the internal controls and quality assurance systems
necessary for effective Account Maintenance functions, and to verify that the State has such controls
in place.
Acceptance Samples examine the following:
60 Active Contributory Accounts
60 Accounts with Contributions due
60 Accounts with Reimbursable Amounts due
60 Accounts with Credits/Refunds due
60 Accounts with Benefit Charges
60 Experience Rated Accounts
In conjunction with the Systems Reviews, Acceptance Samples for each component will be
examined to determine the effectiveness of the controls, and confirm the accuracy of the State's
outputs.
The completed Program Review will identify areas of risk or systems that may need improvements.
The TPS Program Review should also identify information about exemplary practices which may be
shared with other States.
NOTE: Although various components of the Account Maintenance function are closely related and
may impact each other, each component is to be assessed independently for the TPS Annual
Report.
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ACCOUNT MAINTENANCE
CONTRIBUTION REPORT PROCESSING
PROGRAM REVIEW
COMPONENTS
SYSTEMS REVIEW
ACCEPTANCE SAMPLES
SYSTEMS REVIEW
ET HANDBOOK NO. 407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Report processing
SYSTEMS REVIEW INTERVIEW SHEET
Function
Reviewer
Persons Interviewed
Date
Name:
Documents Reviewed
Title:
Title:
Form#:
ET HANDBOOK NO. 407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Report processing
CHAPTER EIGHT
PROGRAM REVIEW
ET HANDBOOK NO. 407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Report processing
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recorded Information and Instructions
In the State Contribution Report processing operation, recorded information and instructions
should include procedures for processing updates to employer accounts from contribution
reports and adjustments to contribution reports in accordance with State laws and written
policies.
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 Contribution 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 "Other" 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 Contribution Report processing
function.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Report processing
SYSTEMS REVIEW QUESTIONS
1.
Does the State have recorded information and instructions to assist employees processing
contribution reports in accordance with State laws and written policies?
Yes __ No __
2.
If yes, are all the recorded information and instructions:
Yes
a.
b.
c.
d.
Current? .....................................................................................................................
Accurate? ...................................................................................................................
Complete? ..................................................................................................................
Readily available to staff?..........................................................................................
VS:(Questions1&2
3.
No
)
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 the questions.
VS:
(Question3
)
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CHAPTER EIGHT
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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ACCOUNT MAINTENANCE
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CHAPTER EIGHT
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 Contribution Report processing function. New
employees need to learn the procedures for processing and recording employer remittances.
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 Contribution Report processing
staff, and after examining the training packages utilized.
In the narrative section following the questions, explain "Other" 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 Contribution Report
processing function duties.
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CHAPTER EIGHT
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:
Yes No
a.
b.
c.
d.
e.
*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
a.
b.
c.
d.
e.
No
*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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PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
3.
Does the State provide training when there are:
a.
b.
c.
d.
e.
4.
Yes No N/A
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:
(Questions1-4
)
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ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Report processing
SYSTEMS REVIEW QUESTIONS
5.
*In the opinion of the supervisor or manager, does the training meet the needs of the
Contribution Report processing 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- 8
)
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CHAPTER EIGHT
PROGRAM REVIEW
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ACCOUNT MAINTENANCE
Report processing
CHAPTER EIGHT
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 EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recording of Transactions and Events
The State should have a method to assure that updates* to employer account records (e.g.,
updates to taxable wages, updates to tax due, application of payments) are recorded and that
the source information (e.g., contribution reports, audit reports, investigations, etc.) is readily
available for examination. Whether the State system is automated or manual, an audit trail
should lead from the wage, tax and payment data in the employer account record to the
information source upon which the update was made.
The reviewer must become familiar with the types of updates to employer
records that require an audit trail and the types of source documents used by
the State to update employer accounts.
In the narrative section following the questions, explain "Other" responses,
and describe "Compensating Controls". Identify the question being
explained by referencing the number and section. If there is no audit trail
maintained, then explain how the State is assured that the employer account
records are accurate.
*Note: Update is a transaction that either increases or decreases the
employers' account balance and/or payroll amounts.
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PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
1.
Does the State have a method to assure that updates to employer accounts can be traced to
their source (even if source is via electronic media)?
Yes
No __
2.
Does the audit trail identify:
Yes No
a.The type update made to the employer account?…………………………….
b.The date of the update? .......................................................................................................
c.The State employee(s) who authorized and
entered the update? ....................................................................................................
3.
Is source documentation required to support updates to employer accounts?
Yes
VS: (Questions 1 – 3
No __
)
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SYSTEMS REVIEW QUESTIONS
4.
*Which of the following source documents does the State use to identify updates to
employer accounts:
Yes No
a.
b.
c.
d.
e.
f.
g.
5.
*Contribution reports? ...............................................................................................
*Supplemental reports?..............................................................................................
*Field Audit change notices?.....................................................................................
*Other adjustment reports? ........................................................................................
*Batch control files? ..................................................................................................
*Electronic media? ………………………………………………………………..
*Other?.......................................................................................................................
Are original and amended information sources, including electronic source documentation,
retained and accessible for State use?
Yes
No __
VS: (Question 5
6.
)
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-6
)
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ACCOUNT MAINTENANCE
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CHAPTER EIGHT
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 EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Systems to Assure Execution of Events
Built in reviews should be in place to assure the execution of events such as mailing
contribution reports to employers and accurately and promptly processing contribution
reports that have been received. The review may be automated (e.g., quarter and year edits,
math computation edits) or manual (e.g., pre-audit or post-audit procedures).
The reviewer must become familiar with the types of built-in checks used by
the State to assure the accurate mailing of all contribution reports to
employers, and that all quarterly reports are processed accurately and
promptly when received.
In the narrative section following the questions, explain "Other" responses,
and describe "Compensating Controls". Identify the question being
explained by referencing the number and section.
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CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
1.
Does the State have system procedures and/or controls to assure that quarterly contribution
reports are mailed to all known employers that were active during the reporting period?
Yes
a.
No __
*If yes, which method does the State use:
Yes No
(1) *Batch Controls (System Controls)?...................................................................
(2) *Mailroom Count? ..............................................................................................
(3) *Other? ................................................................................................................
VS: (Question 1
2.
)
Does the State have systems procedures and/or internal controls to assure accurate
processing of employer contribution reports?
Yes
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CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
2.
a.
What automated internal controls does the State use to assure that employer
contribution reports are posted accurately:
Yes No
(1)
(2)
(3)
(4)
(5)
Edit for correct math computation? ...............................................................
Employer account number edit? ....................................................................
(e.g., hash totals, check digits)
Quarter/year edit? ..........................................................................................
Report totals balance with wage detail listing? .............................................
*Other ............................................................................................................
VS: (Question 2
)
3.
4.
Does the State have system procedures or internal controls to assure that quarterly
contribution reports are posted promptly to prevent the mailing of delinquent employer
notices or assigning to the field?
Yes
No __
Yes
No __
Does the State have a method for handling system rejects?
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CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
4.
a.
If yes, is an error suspense file used?
Yes
No __
Yes
No __
(1) If yes, is the suspense file aged?
VS: (Questions 3 and 4
5.
)
Does the State have systems, procedures, or internal controls to verify that contribution
report information (including account adjustments) received from employers, field auditors
or other State units has been completed and the work can be tracked by:
a.
b.
c.
Yes No
Following up on field investigations?........................................................................
Keeping a work flow log?..........................................................................................
*Other?.......................................................................................................................
VS: (Question 5
)
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CHAPTER EIGHT
PROGRAM REVIEW
Report processing
SYSTEMS REVIEW QUESTIONS
6.
Are verification procedures in place to assure that updates to quarterly report information are
accurate ("in house" review of account transactions)?
Yes
No __
VS: (Question 6
7.
)
*Does the State have an automated report processing system?
Yes __ No __
a. If Yes, is a system check performed every time a program is changed?
Yes __ No __ N/A __
VS: (Question 7a________________________________________________________________)
8.
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.
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ACCOUNT MAINTENANCE
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CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW NARRATIVE
Question
Explanation of "N/A", and "Compensating Controls"
(when deemed necessary)
Question
Number
Answers to "If yes, describe" and "Other":
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ACCOUNT MAINTENANCE
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CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Review of Completed Work
For the Contribution Report processing function, the State should be conducting systematic
reviews of the accuracy of the Contribution Report information being posted to the employer's
account. The information received and the action taken should be checked against the
information recorded in the employer's account.
The reviewer must consider the kind of supervisory program and/or quality
assurance review the State uses to assess the Contribution Report processing
Unit. Is the review procedure different for new employees? If the State uses
a quality assurance review, who (position and organizational location)
performs it? A review of completed work should be done on a regular basis
for all staff members involved in processing documents for the employer's
account. This review may be done on an individual basis for each staff
member, or by sampling work done throughout the entire unit.
In the narrative section following the questions, explain "Other" responses,
and describe "Compensating Controls". Identify the question being
explained by referencing the number and section. If there is no supervisory
and/or quality assurance review, describe how quality is assured in the
Contribution Report processing function.
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For all staff members involved in Contribution Reports processing, are the following components subject to some form of systematic
review. If review is performed, 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 which is the evaluative question.
Type of review
Component
a.
The mailing of the Contribution Reports?
b.
The posting of the Contribution Reports?
c.
Adjustments made to Contributions Reports?
VS:
(Question 6
* Informational
*1
Supv
*2
Peer
*3
QR
Qual.Rev.
*4
Support
(Clerical)
*5
Other
6
Review
Conducted?
)
ET HANDBOOK NO. 407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Report processing
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 the questions.
VS: (Question 7
)
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CHAPTER EIGHT
PROGRAM REVIEW
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Report processing
CHAPTER EIGHT
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 EIGHT
PROGRAM REVIEW
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CHAPTER EIGHT
PROGRAM REVIEW
Report processing
SYSTEMS REVIEW QUESTIONS
Additional Controls
1.
*Does the State have internal controls or quality assurance systems in the Contribution
Reports function which this review failed to identify?
Yes
No __
If yes, describe below:
2.
*Are there any exemplary practices for the Contribution Reports function?
Yes
No __
If yes, describe below:
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ACCEPTANCE SAMPLES
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Report Processing
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Purpose/Intent
To assure that the contribution report processing function is
accurately processing the quarterly contribution reports.
To confirm that the State maintains accurate quarterly
contribution information.
To determine that employers who do not file timely are being
properly identified.
Scope
Universe
The scope of the review will focus on:
1.
The processing of the returns received from
employers.
2.
The identification of employers who should have filed
a return, but failed to do so.
The universe to be identified for the Contribution Report
processing function will include all contributory employers
who are active on the date the universe is identified.
The universe will exclude all reimbursing employers.
Note: Employers added to the State's master files after the
universe has been identified will not be added to the universe.
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ACCEPTANCE SAMPLE INSTRUCTIONS
Timing/Frequency
The universe will be identified once during the calendar year.
The universe will be identified after January 31 and prior to
March 31. (Single snapshot on the date selected.)
Sampling Procedures
The following described the steps to establish the universe
and select the sample accounts:
1.
Select universe identification date.
This will be any day after January 31 and prior to
March 31.
2.
Identify the universe.
The universe will include all Contributory Employers
who are active on the date selected to identify the
universe.
Excluded from the universe are all Reimbursing
employers.
3.
Select 60 samples.
The samples should be selected between May 1 and
June 30. Date of selection should be after the first
quarter report delinquency notice run.
a. If an employer submitted reports for more than one
quarter only the 1st quarter report will be used.
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ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures cont.
Appendix A describes what action needs to be taken for
sampling in both manual and automated systems.
If the system is automated, the Reviewer must work closely
with ADP. A thorough understanding of what the universe
includes and excludes and when the samples are to be
selected is essential.
Reviewing Samples
Assemble the following information for the employer's
account:
1.
A copy of the contribution report submitted by the
employer and any adjustment forms affecting the
report.
2.
The employer account information on the State's
computer files. If the employer filed electronically,
the only source document may be the information
posted to the account. If no conflicting information
exists, a printout of the employer’s entry or a copy of
the state’s “employer status screen” can be used as the
source document.
The review should be completed as soon as possible after
selecting the sample, and no later than September 30.
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CHAPTER EIGHT
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ACCEPTANCE SAMPLE INSTRUCTIONS
Drawing Conclusions
Using this information, answer the questions on the Acceptance
Sample Questionnaire.
If no report was received by the review date, the only
evaluative question to be answered is:
#2.
Identification of the employer as failing to file a
timely report. (NOTE: Use N/A if no report is owed,
e.g, employer was inactivated/terminated.)
If a report was received, the following questions are
evaluative:
#3a
#3b
#3c
#3d
#5
Accuracy of the employer account number.
Accuracy of the quarter and year.
Accuracy of the amount of money remitted.
Accuracy of the total gross and/or taxable wages.
Accuracy of the computation of tax due.
A "No" answer to question 2, 3(a-d), or 5 will mean that the
sampled account was not processed accurately and is not
considered an acceptable case.
Of the 60 cases, if three or more are not acceptable, then the
reviewer must conclude that accuracy in the State's
processing of Contribution Reports cannot be confirmed.
For all unacceptable cases, the reviewer must provide an
explanation for the unacceptable case on the Acceptance
Sample Explanation Sheet.
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CHAPTER EIGHT
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ACCEPTANCE SAMPLE INSTRUCTIONS
Documentation
All 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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ACCEPTANCE SAMPLE QUESTIONNAIRE
Identification of Delinquent Employers
1.
*Was a Contribution Report received for
the account by the TPS review date?
Yes____ No ____
If No, answer question #2, and end review
2.
Was the account appropriately identified
as delinquent?
Yes____ No ____ N/A ____
Accuracy and Timeliness of Posting
3.
Was the following Contribution Report information posted
accurately:
a.
b.
c.
d.
4.
the employer account number?
the quarter and year?
the amount of money remitted?
the total gross and/or taxable wages?
(Depending on State posting requirements)
* Was the Contribution Report processed promptly according to State
policy and procedures?
Yes ___
Yes
No
____
____
____
____
____
____
____
____
No ___
Accuracy of Computations
5.
Did the State correctly compute the tax
due on the report?
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Yes ___ No ___
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TAX PERFORMANCE SYSTEM
Account Maintenance Sampling Coding Sheet
Quarterly Contribution Report processing - Checklist #1
State: _________
Case
Number
Period Covered: ______________
Date: ________________
Reviewer: ____________________
Sample Type:
Acceptance
Expanded
Employer
Identification
Number
1
Questions 2, 3a,3b, 3c, 3d, and 5 are Evaluative
2
3a
3b
3c
Total Acceptable _______ of _______
3d
4
5
Pass/
Fail
Y/N
Page _______ of _______
TAX PERFORMANCE SYSTEM
Account Maintenance - Sample Explanation Sheet
Quarterly Contribution Report processing
State: _____________________ Period Covered: _______________ Date: _______________ Reviewer: _______________
Sample Type:
Case
Number
Employer
Identification Number
Acceptance
Expanded
Explanation
Page _____ of _____
ACCOUNT MAINTENANCE
EMPLOYER DEBITS/BILLINGS
PROGRAM REVIEW
COMPONENTS
SYSTEMS REVIEW
ACCEPTANCE SAMPLES
SYSTEMS REVIEW
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW INTERVIEW SHEET
Function
Reviewer
Persons Interviewed
Date
Name:
Documents Reviewed
Title:
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Title:
Form#:
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
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CHAPTER EIGHT
PROGRAM REVIEW
R 04/03
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recorded Information and Instructions
For employer billings, recorded information and instructions should include procedures
for assuring that employer accounts with unpaid tax balances are properly billed. The
procedures should be in accordance with State laws and written policies.
The reviewer should examine the recorded information and instructions
available to the employees involved in the employer billing process and
compare them to the laws and written policies.
The reviewer should also observe the employer billing process and talk
with employees to learn whether or not recorded instructions are available
and being used.
In the narrative section following the questions, explain "Other"
responses, and describe any "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
Employer Debit/Billing function.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
1.
Does the State have recorded instructions to help employees properly bill employers in
accordance with State laws and policies?
Yes
2.
No __
If yes, are all the recorded information and instructions:
Yes
a.
b.
c.
d.
No
Current? .....................................................................................................................
Accurate? ...................................................................................................................
Complete? ..................................................................................................................
Readily available to staff?..........................................................................................
VS:(Questions 1 and 2
3.
)
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 the questions.
VS: (Question 3
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
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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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Training
New employees need to learn the requirements for processing employer accounts that
create debits and the methods used to establish employer billings. Experienced employees
benefit from periodic refresher courses and need additional training when changes occur,
and when quality defects or a significant number of errors appear in a particular area.
The reviewer should respond to the following questions after discussing
with management the training systems used for the Employer
Debits/Billing function, and examining the training packages utilized.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". If there are no formal
training systems, describe how the staff knows the laws and written
policies and the proper procedures to perform the Employer Debit/Billing
Function. Identify the question being explained by referencing the
number and section.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
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:
Yes No
a.
b.
c.
d.
e.
*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 comments.
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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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
3.
Does the State provide training when there are:
a.
b.
c.
d.
e.
4.
Yes No N/A
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.
VS: (Questions 1-4)
.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
5.
*In the opinion of the supervisor or manager, does the training meet the needs of the
Employer Billing 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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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
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
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recording of Transactions and Events
The State should have a method to assure that notices of employer debt (billing notices) are
recorded and that the source information (e.g., contribution reports, audit reports,
adjustments) is readily available for examination. Whether the Stats system is automated
or manual, an audit trail should lead from the wage, tax and payment data in the employer
account record to the information source upon which the update was made.
The reviewer should become familiar with the types of updates to
employer records that require an audit trail and the types of source
documents used by the State to update employer accounts.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". If there are no
recording or reconciliation of the Employer Account's Receivables,
explain how the State staff is assured of the account's accuracy. Identify
the question being explained by referencing the number and section.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
1.
Does the State have a method to assure that debits posted to employer accounts can be
traced to their source (even if source is via electronic media)?
Yes
2.
No __
Does the audit trail identify:
Yes No
a. The type of update made to the employer account?...........................................................
b. The date the debit was established?...................................................................................
c. The State employee(s) who authorized and
entered the update? ....................................................................................................
3.
Is source documentation required to support the debit posted to employer accounts?
Yes
VS: (Questions 1 – 3
No __
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
4.
*Which of the following source documents does the State use to identify the posting of
debits to employer accounts?
a.
b.
c.
d.
e.
f.
g.
5.
Yes No
*Contribution reports? ...............................................................................................
*Supplemental reports?..............................................................................................
*Field Audit change notices?.....................................................................................
*Other adjustment reports? ........................................................................................
*Wage Record detail? ................................................................................................
*Electronic media? ....................................................................................................
*Other?……………………………………………………………………………..
Are original and amended information sources, including electronic source
documentation, retained and accessible for State use?
Yes
No __
VS: (Questions 5
6.
)
If any of the preceding evaluative questions are answered "No," does the State have a
substitute or compensating control?
No
N/A __
Yes
If yes, describe in the "Narrative" section following these questions.
VS:(Question 6
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
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":
VIII - 91
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Systems to Assure Execution of Events
Systems should be in place to assure the execution of events such as establishing tax debits,
issuing billings, suppressing billings, and reconciling employer account unpaid balances to
the State's Account Receivables.
The reviewer should become familiar with the systems used by the State
to assure that employer debits/billings are being issued accurately.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
1.
Does the State have system procedures and/or internal controls to identify all employers
that have unpaid balances?
Yes
No __
VS (Question 1
2.
)
Does the State apply a tolerance level to differences between amounts due and received?
(If the amount unpaid is within a certain dollar amount, is it considered not a
receivable?)
Yes
No __
a. *If yes, which type tolerance is used?
Yes No N/A
(a)
(b)
(c)
3.
*Dollar amount? ......................................................................................
......................................................................................................
*Percent? *Other?.......................................................................................................................
*Does the State have an automated billing system?
Yes
a.
No __
If yes, is a system check performed every time a program is changed?
Yes
VIII - 94
No __
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
4.
Is there a method by which to suppress bills/notices?
Yes
No __
VS: (Questions 2, 3 and 4
5.
)
Is there a reconciliation of the sum of employer account unpaid balances to the State's
Accounts Receivable control total (e.g., General Ledger)?
Yes
a.
No __
*If yes, indicate frequency. (Check all that apply).
(1)
(2)
(3)
(4)
(5)
(6)
(7)
*Daily ..........................................................................................
*Weekly ......................................................................................
*Monthly .....................................................................................
*Quarterly ...................................................................................
*Semi-annually ...........................................................................
*Annually ....................................................................................
*Other..........................................................................................
VS: (Questions 5
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
6.
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:(Questions 6
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
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":
VIII - 97
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Review of Completed Work
For the Employer Billing process, the State should be conducting systematic reviews of the
accuracy of the debit being established and the accuracy of the notice being mailed to the
employer. A review of this information should be done during each billing cycle. The
following questions are designed to determine how these reviews are conducted.
The reviewer must consider the kind of supervisory program and/or
quality assurance review the State uses to assess the Employer Billing
processing Unit. Is the review procedure different for new employees? If
the State uses a quality assurance review, who (position and
organizational location) performs it? A review of completed work should
be done on a regular basis for all staff members involved in processing
debits established for the employer's account. This review may be done
on an individual basis for each staff member, or by sampling work done
throughout the entire unit.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section. If there is no
supervisory and/or quality assurance review, describe how quality is
assured in the Employer Debit/Billing function.
VIII - 99
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For all staff members involved in the Employer Debits/Billing process, are the following components subject to some form of
systematic review. If review is performed, 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 evaluative question.
Type of review
Component
a.
Comparing source documents to the
information on the employer's account?
b.
Billing notices prior to mailing.
c.
If yes to (b), is the information on the billing
notice compared to the employer's file?
VS: (Question 6
* Informational
*1
Supv
*2
Peer
*3
QR
Qual.Rev.
*4
Support
(Clerical)
*5
Other
6
Review
Conducted?
)
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
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 the questions.
VS: (Question 7
)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
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":
VIII - 105
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Debits/Billings
SYSTEMS REVIEW QUESTIONS
Additional Controls
1.
*Does the State have internal controls or quality assurance systems
in the Employer Debit/Billing function which this review failed to identify?
Yes
No __
If yes, describe below:
2.
*Are there any exemplary practices for the Employer Debit/Billing function?
Yes
No __
If yes, describe below:
VIII - 107
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ACCEPTANCE SAMPLES
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Purpose/Intent
To assure accuracy in the establishment of employer
underpayments (debits).
To assure that the State maintains employer debit (accounts
receivable) information accurately and timely.
To assure that the State accurately issues debit
memorandums or billing notices to employers for underpayments of UI contributions due.
Scope
The scope of the review will focus on:
1.
Debits for contributory employers established
during the processing period which remain unpaid
at the end of the processing period.
2.
Debits for reimbursing employers for benefits
paid during the selected time period which remain
unpaid at the end of the processing period.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Universe
There are two universes to be identified.
CONTRIBUTORY EMPLOYERS
1.
All contributory employers who have an unpaid
debit that was established during the processing
period and remains unpaid at the end of the
processing period. The debit may relate to any
quarter, but must have been established during the
processing period for the quarter selected.
The processing period is defined as the time period
during which the quarterly reports and contributions
are processed after the selected quarter has ended.
E.g., if the 2nd quarter is selected for review, the
processing period would begin July 1 and end on
the cut off date the State uses to identify delinquent
employer reports, approximately August 20. This
definition is for the sole purpose of defining the
time frame from which the universe of debits
established for contributory employers is to be
drawn.
2.
The debit is for unpaid UI contributions. (The debit
may include interest and penalty.)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Universe cont.
3.
Excluded from this universe are:
a.
Contributory Employers with only interest
and/or penalty due.
b.
Contributory Employers with only other
State mandated taxes due, e.g., State
Disability Withholdings, etc.
c.
Contributory Employers with debits
established and cleared during the
processing period.
d.
Contributory employers with debits within
tolerance level established by State
(amounts that State does not issue debit
memorandums for).
e.
All Reimbursing Employers
REIMBURSING EMPLOYERS
1.
All reimbursing employers who have an unpaid
debit balance for benefits paid during the period
selected. The balance may include interest and
penalty.
Debits for reimbursing employers are limited to
those debits which are past due. This does not
include the debits initially established on the benefit
charging Statement or the initial request for
payment which allows an established period of time
for the reimbursing employer to pay.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Universe Cont.
2.
Timing/Frequency
Excluded from this universe are:
a.
Reimbursing Employers with only interest
and/or penalty due.
b.
Reimbursing Employers with only other
State mandated taxes due., e.g., State
Disability Withholdings, etc.
c.
Reimbursing Employers who paid their
charges within the "grace period."
d.
Reimbursing Employers within a tolerance
level for which State does not issue debit (or
charge) notices
e.
All Contributory Employers.
The two samples will be selected once per calendar year.
The universe of contributory employers quarter will cover
the processing period for either the 1st, 2nd or 3rd quarter
and will be identified immediately at the end of the
processing period.
The universe of reimbursing employers covers one of the
time periods shown in step one of the Sampling Procedures
below and will be identified immediately at the end of the
period of time allowed for the employer to pay from the
first notice, e.g., the charge Statement.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures
The following describes the steps to establish the universe and
select the sample accounts:
1.
Select period for review
For Contributory Employers, this will be either
the 1st, 2nd, or 3rd quarter.
For Reimbursing Employers, the time period will
be either:
2.
a.
The entire year, if the State bills its
reimbursing employers only once a year.
b.
Either the 1st, 2nd, or 3rd quarter if the State
bills its reimbursing employers quarterly.
c.
Three consecutive months of charges if the
State bills its reimbursings employer more
frequently than quarterly, e.g., monthly,
biweekly. (It may be possibly to use only
one month of charges. Contact N.O. for
instructions.)
Identify Universes.
The universe for contributory employers will be
identified immediately at the end of the processing
period for the quarter selected.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures Cont.
The universe for reimbursing employers will be
identified immediately at the end of the "grace
period" for payment of reimbursing charges.
States who do not build the universes as debits are
established, and whose automated systems
overwrite the pertinent fields, may find it necessary
to identify the populations of each type employer at
the beginning of the applicable period and again at
the end of the period and then compare the two
populations to isolate those employers who had a
debit increase established during the applicable
period that remains unpaid. These employers
constitute the sampling universes.
3.
Select 60 cases, or if universe is small, select the
number of cases based on Table in Appendix A-III
Reviewers must investigate billing procedures and
identify the appropriate sample selection date. We
recommend the following:
For contributory employers, the samples should
be selected 30 days after the universe is identified.
For reimbursing employers, the samples should be
selected 30 days after the universe is identified.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures
Cont.
If the State bills reimbursing employers more
frequently than quarterly, the State should discuss
sampling procedures with the Regional Office
Representative.
In some States, the entire universe of reimbursing
employers may be very small. In these cases, see
Appendix A for number to be reviewed.
If the system is automated, the Reviewer must work closely
with ADP. A thorough understanding of what the universe
includes and excludes and when the samples are to be
selected is essential.
Appendix A describes what action needs to be taken for
sampling in both manual and automated systems.
Reviewing the Samples
Assemble the following information for the employer's
account:
1.
A copy of the original debit memorandum/ billing
notice or a facsimile of the original computer billing
notice and a copy of any payment history.
2.
The original source of the information on the State's
files; e.g., contribution reports, adjustment reports,
benefit charges, rate changes, etc.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Reviewing the Samples
Cont.
3.
The account information maintained on the State's
employer records.
Compare all source documents with the information on the
employer's account record.
The review should be completed within 45 days after the
samples are selected.
Drawing Conclusions
Using this information, answer the questions on the Acceptance
Sample Questionnaire.
The following questions on the Acceptance Sample
Questionnaire are evaluative:
#1.
#2.
#4.
#5.
Establishing to proper account.
Accuracy of dollar amount and time frame.
Accuracy of the billing notice.
Accurate processing of the debit established.
A "No" answer to 1, 2, 4, or 5 will mean that the sampled
account was not processed accurately and is not an
acceptable case.
An inaccurate penalty or interest assessment will not cause
the case to fail.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Of the 60 cases, if three or more are not acceptable, then
the reviewer must conclude that accuracy in the Employer
debit/billing processing function cannot be confirmed.
For all unacceptable cases, the reviewer must provide an
explanation on the TPS Sample Explanation Sheet.
Documentation
All 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
ACCOUNT MAINTENANCE
Debits/Billings
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE QUESTIONNAIRE
Accuracy of Debit
Yes
No N/A
1.
Was the debit established on the proper employer's account?
If No, case fails, do not proceed with Questionnaire.
2.
Was the debit for the correct:
a.
Dollar Amount?
____
____
b.
____
____
Quarter(s) and Year?
____ ____
Accuracy of Billing Notices
3.
*Was an employer billing notice issued for
the debit?
____ ____
If Yes, answer question #4.
If No, answer question #5
4.
5.
Did the billing notice accurately reflect
the dollar amount receivable?
____ ____
Was the billing notice withheld in accordance
with State's established procedures? (e.g., State policy,
State law, bankruptcy status, etc.)
____ ____ ____
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TAX PERFORMANCE SYSTEM
Account Maintenance Sample Coding Sheet
Employer Debits/Billings - Checklist #2
State: _________
Period Covered: ______________
Employer Type:
Contributory
Case
Number
Employer
Identification
Number
Date: ________________
Reimbursing
Questions 1, 2a, 2b, 4, and 5 are evaluative
1
Reviewer: ____________________
Sample Type:
2a
2b
3
Acceptance
4
5
Expanded
Pass/
Fail
Y/N
Total Acceptable ______ of ______
Page ______ of ______
TAX PERFORMANCE SYSTEM
Account Maintenance - Sample Explanation Sheet
Employer Debits/Billings
State: _____________________ Period Covered: _______________ Date: _______________ Reviewer: _______________
Sample Type:
Acceptance
Expanded
Case
Number
Employer
Identification Number
Explanation
Page _____ of _____
ACCOUNT MAINTENANCE
CREDITS/REFUNDS
PROGRAM REVIEW
COMPONENTS
SYSTEMS REVIEW
ACCEPTANCE SAMPLES
SYSTEMS REVIEW
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW INTERVIEW SHEET
Function
Reviewer
Persons Interviewed
Date
Name:
Documents Reviewed
Title:
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Title:
Form#:
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Credits/Refunds
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recorded Information and Instructions
For employer credits/refunds, recorded information and instructions should include
procedures for assuring that employer accounts with overpayments are properly credited
and monies refunded when applicable. The procedures should be in accordance with State
law and written policies.
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
Credit/Refund 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 "Other"
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 Employer
Credits and Refunds function.
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ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
1.
Does the State have recorded information and instructions to assist employees processing
employer credits/refunds reports in accordance with State laws and written policies?
Yes
2.
No __
If yes, are all the recorded information and instructions:
Yes
a.
b.
c.
d.
Current? .....................................................................................................................
Accurate? ...................................................................................................................
Complete? ..................................................................................................................
Readily available to staff?..........................................................................................
VS:(Questions 1 and 2
3.
No
)
If any of the preceding evaluative questions are answered "No", does the State have a
substitute or compensating control?
Yes
VS: (Question 3
No
N/A __
)
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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
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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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Training
Employees involved in processing employer credits/refunds should be given training to
properly perform required tasks such as determining the amount of overpayments and
issuing credit memorandums and/or refunds. New employees need to learn the procedures
for processing employer overpayments, and 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 the Employer
credits/refunds processing staff, and after examining the training packages
utilized.
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 there are no
formal training systems, then describe how the staff knows the laws and
written policies and the proper procedures to perform the credits and/or
refunds function duties.
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ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
1.
Does the State have methods or procedures to provide training for newly hired
employees?
No __
Yes
*If yes, identify the type of training:
Yes No
a.
b.
c.
d.
e.
*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 comments.
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 EIGHT
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Credits/Refunds
SYSTEMS REVIEW QUESTIONS
3.
Does the State provide training when there are:
a.
b.
c.
d.
e.
4.
Yes No N/A
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.
VS: (Questions 1-4
)
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CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
5.
*In the opinion of the supervisor or manager, does the training meet the needs of the
Employer Credits/Refunds 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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ACCOUNT MAINTENANCE
Credits/Refunds
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CHAPTER EIGHT
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
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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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recording of Transactions and Events
The State should have a method to assure that notices of employer credits and refunds
(e.g., credit memos, letters, etc.) are recorded and that the source information (e.g.,
contribution reports, adjustments, etc.) is readily available for examination. Whether the
State system is automated or manual, an audit trail should lead from the wage, tax and
payment data in the employer account record to the information source upon which the
update was made.
The reviewer must become familiar with the types of updates to employer
records that require an audit trail and the types of source documents used
by the State to update employer accounts.
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 there is no
audit trail maintained, then explain how the State is assured that the
employer credits and/or refunds are accurate.
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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
1.
Does the State have a method to assure that credits (overpayments) posted to employer
accounts can be traced to their source (even if source is via electronic media)?
Yes
2.
No __
Does the audit trail identify:
Yes
No
a. The type of update made to the employer account?...........................................................
b. The date the credit was established?..................................................................................
c. The State employee(s) who authorized and
entered the update? .......................................................................................................
3.
Is source documentation required to support the credits posted to employer accounts?
Yes
VS: (Questions 1 – 3
No __
)
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ACCOUNT MAINTENANCE
Credits/Refunds
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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
4.
*Which of the following source documents does the State use to identify the posting of
credits to employer accounts:
Yes No
a.
b.
c.
d.
e.
f.
g.
5.
*Contribution reports? ...............................................................................................
*Supplemental reports?..............................................................................................
*Field Audit change notices?.....................................................................................
*Other adjustment reports? ........................................................................................
*Wage record detail? .................................................................................................
*Electronic media?…………………………………………………………………
*Other?.......................................................................................................................
Does the State have a method to assure that refunds issued to an employer can be traced
to their source?
Yes
6.
No __
Does the audit trail identify:
Yes No
a.
b.
c.
The type of update made to the employer account? ..................................................
The date the refund was issued? ................................................................................
The State employee(s) who authorized the refund? ..................................................
VS: (Questions 5 – 6
.
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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
7.
Are original and amended information sources, including electronic source documents,
retained and accessible for State use?
Yes
VS: (Question 7
8.
No __
)
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 8
.
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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
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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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Systems to Assure Execution of Events
Built in systems should be in place to assure the execution of events such as establishing tax
credits and issuing memorandums and/or refunds.
The reviewer must become familiar with the types of built-in checks used
by the State to assure the accurate processing of all employer
overpayments, and the issuing of proper credits and/or refunds to such
employers.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
1.
Does the State have system procedures and/or controls to identify all employers who
have overpaid taxes?
Yes
No __
VS: (Question 1
2.
)
*Does the State issue Credit Memorandums to the employers?
Yes
No
N/A __
If Yes, answer questions 3 & 4.
If No, continue to question 5.
VS: (Question 2
)
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ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
3.
Does the State issue Credit Memorandums via an automated system?
Yes
No
N/A __
If Yes, when there is a change to a program in the automated system, is the new program
tested for accuracy?
Yes
No __
VS: (Question 3
4.
)
Prior to issuing credit memorandums, is a review done to determine if:
Yes No
a.
b.
c.
N/A
Math computations are accurate? ..............................................................................
All tax due has been paid? .........................................................................................
Other?.........................................................................................................................
VS: (Question 4
)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
5.
Does the State issue Refunds to employers?
Yes
6.
No __
*Indicate below which method of refunds your State uses:
a.
b.
c.
Automatically issues refunds .....................................................................................
Issues refunds on request ...........................................................................................
Both............................................................................................................................
If both methods are used, explain the criteria for each method.
7.
*Does the State issue refunds via an automated system?
Yes
No __
a. If Yes, when there is a change to a program in the automated system, is the new
program tested for accuracy?
Yes
VS: (Questions 5 and 7a
No __
)
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ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
8.
Prior to issuing refunds, is an internal reconciliation done to determine if:
Yes No
a.
b.
c.
d.
Math computations are accurate? ..............................................................................
All tax due has been paid? .........................................................................................
Required contribution reports have been
received? ....................................................................................................................
Other?.........................................................................................................................
VS: (Question 8
9.
N/A
)
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 9)
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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
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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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Review of Completed Work
For the Credits/Refunds function, the State should be conducting systematic reviews of the
accuracy of the credit being established and the accuracy of the notice/refund being mailed
to the employer. A review of this information should be done during each processing cycle.
The following questions are designed to determine how these reviews are conducted.
The reviewer must consider the kind of supervisory program and/or
quality assurance review the State uses to assess the Credits/Refunds
processing unit. Is the review procedure different for new employees? If
the State uses a quality assurance review, who (position and
organizational location) performs it? A review of completed work should
be done on a regular basis for all staff members involved in processing
documents for the employer's account. This review may be done on an
individual basis for each staff member, or by sampling work done
throughout the entire unit.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section. If there is no
supervisory and/or quality assurance review, describe how quality is
assured in the Employer Credits/Refunds function.
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For all staff members involved in Employer Credits/Refunds 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 which is the evaluative question.
Type of Review
Component
a.
Credits established on the
employer's account?
b.
Credit memorandums mailed to
the employers?
c.
Refunds mailed to the employer?
VS: (Question 6)
* Informational
*1
Supv
*2
Peer
*3
QR
Qual.Rev.
*4
Support
(Clerical)
*5
Other
6
Review
Conducted?
7
N/A
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Credits/Refunds
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 the questions.
VS: (Question 7
)
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ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
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 EIGHT
PROGRAM REVIEW
Credits/Refunds
SYSTEMS REVIEW QUESTIONS
Additional Controls
1.
*Does the State have internal controls or quality assurance systems in the Employer
Credits/Refunds function which this review failed to identify?
Yes
No __
If yes, describe below:
2.
*Are there any exemplary practices for the Employer Credits/Refunds function?
Yes
No __
If yes, describe below:
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ACCEPTANCE SAMPLES
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Credits/Refunds
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Purpose/Intent
To assure accuracy in the establishment of employer
overpayments (credits/refunds).
To assure that the State maintains employer overpayment
(credit/refund) information accurately and timely.
To assure that the State accurately issues credit
memorandums and/or refunds to employers for
overpayments.
Scope
The scope of the review will focus on credits established
during the processing period that are still outstanding (not
refunded or applied to a liability) on the date the universe is
identified.
Universe
The universe for employer overpayments (credits/refunds)
will include all contributory employers who have
overpayments (credits) established during the processing
period of the selected quarter that remains outstanding at
the end of the processing period.
The overpayments may relate to any quarter but must have
been established during the processing period for the
quarter selected for the review.
The credit is for overpaid contributions. (The credit may
include penalty and interest monies overpaid.)
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CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Universe Cont.
Timing/Frequency
The universe will exclude the following:
1.
All contributory employers who had an
overpayment (credit) that was established during
the processing period, but that was cleared by the
end of the processing period, either through refund
or application to a liability.
2.
All contributory employers with credits within the
tolerance level for which the State neither refunds
nor issues credit refunds.
3.
All reimbursing employers.
The sample will be selected once per calendar year.
The universe covers the processing period for either the 1st,
2nd, or 3rd quarter and will be identified immediately at the
end of the processing period.
Sampling Procedures
The following describes the steps to identify the universe and
select the sample accounts:
1.
Select the quarter to review.
This will be either the 1st, 2nd, or 3rd quarter.
2.
Identify the universe.
The universe includes all contributory employers
who:
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CHAPTER EIGHT
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ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures
Cont.
a.
Have an overpayment for any quarter (current or
prior) which was established during the processing
period, and
b.
The credit remains outstanding (not refunded or
applied to a debit) at the end of the processing
period.
The processing period is defined as the State time
period during which the quarterly reports and
contributions are processed after the selected
quarter has ended. (e.g., if the 1st quarter is
selected for review, the processing period would
begin April 1 and end approximately June 30. This
definition is for the sole purpose of defining the
time frame from which the universe of credits
established is to be drawn.
States who do not build the universe as credits are
established, or whose automated systems make it
difficult or impossible to locate the targeted credits
may find it necessary to identify the population of
all contributory employers at the beginning of the
processing period and again at the end of the period
and then compare the two populations to isolate
those employers who had a credit balance
established (or increased) during the defined
processing period. These employers constitute the
sampling universe.
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CHAPTER EIGHT
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ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures
Cont.
3.
Select 60 cases, or if universe is small, select the
number of cases based on Table in Appendix A-III
Note: The reviewer will have to investigate
procedures for issuing credits/refunds and then
identify the appropriate sample selection date. (e.g.,
in some States there may be a lag time of 90 - 180
days before refunds are issued, etc. - thus the
sample selection date would be after the 90 - 180
day time lag period.)
If the system is automated, the Reviewer must work closely
with ADP. A thorough understanding of what the sample
includes and when it is to be extracted is essential.
Appendix A describes what action needs to be taken for
sampling in both manual and automated systems.
Reviewing the Samples
Assemble the following information for each of the cases
selected for review:
1.
A copy of the original credit memorandum; or a
facsimile created from the ADP file that created the
original notice; or a copy of the cancelled check if a
refund was issued; or a computer generated listing
showing the employer account number, check
amount, mail date and address refund issued to.
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ACCEPTANCE SAMPLE INSTRUCTIONS
Reviewing the Samples
cont.
2.
The original source of the information on the state's
files, e.g, contribution reports, adjustment reports,
wage detail adjustments, rate changes, etc.
3.
The employer's account information on the state's
computer files.
Compare all source documents with the information on the
employer's account record.
The review should be completed within 45 days after the
sample is selected.
Drawing Conclusions
Using this information, answer the questions on the Acceptance
Sample Questionnaire.
The following questions are evaluative:
#1.
#2
#4.
#5.
#6.
#7.
Establishment to proper account.
Accuracy of dollar amount and time frame.
Accuracy of the credit memorandum or refund.
Accurate processing of the established credit.
Credit memorandum/refund issued to correct
address
Accuracy of withholding credit
memorandum/refund
A "No" answer to #1, 2, 4, 5, 6 or 7 will mean that the
sampled account was not processed accurately and is not
considered an acceptable case.
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ACCEPTANCE SAMPLE INSTRUCTIONS
Drawing Conclusions
Note that when a credit or refund is due, in excess of Contd.
established tolerance limits, the employer must be given the
opportunity to request a refund, or to apply the credit to
future tax obligations, or to automatically receive a credit or
refund. If the sampled case indicates that the state did not
fulfill this obligation (for instance, no attempt was made to
advise the employer of credit or refund due, or no
credit/refund adjustments were made), question 7 would be
answered “No,” and the case would fail.
Of the 60 cases, if three or more are not acceptable, then
the reviewer must conclude that accuracy in the
Credit/Refund processing function cannot be confirmed.
For all unacceptable cases, the reviewer must provide an
explanation for the unacceptable case on the Acceptance
Sample Explanation Sheet.
Documentation
All 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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CHAPTER EIGHT
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ACCEPTANCE SAMPLE QUESTIONNAIRE
Yes No
Establishment of Credit
1. Was the credit established on the proper employer's account?
If No, case fails, do not proceed with Questionnaire.
2.
____ ____
Was the credit for the correct:
a.
Dollar amount?
____ ____
b.
____ ____
Quarter(s) and year?
Accuracy of Credit Memorandum/Refund
3.
*Was a memorandum/refund issued for the credit?
____ ____
If Yes, answer questions #4, 5, and 6.
If No, answer question #7.
4.
5.
6.
7.
Did the credit memorandum/refund accurately
reflect the amount of the credit?
____ ____
Was the credit memorandum/refund issued to
the correct entity? (e.g., if 3rd party refund
involved, was check made out to 3rd party)
____ ____
Was credit memorandum/refund issued to
correct address?
____ ____
Was the credit memorandum/refund withheld in
accordance with the State's established procedures?
(e.g., The credit designated for future tax, etc.)
____ ____
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Credits/Refunds
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CHAPTER EIGHT
PROGRAM REVIEW
R 11/04
TAX PERFORMANCE SYSTEM
Account Maintenance Sampling Coding Sheet
Employer Credits/Refunds - Checklist #3
State: ___________
Case
Number
Period Covered: ____________
Sample Type:
Employer
Identification
Number
1
Questions 1, 2a, 2b, 4, 5, 6 and 7 are evaluative.
2a
Date: ___________ Reviewer: ____________________
Acceptance
Expanded
2b
3
4
Total Acceptable _______ of _______
5
6
7
Pass/
Fail
Y/N
Page _______ of _______
TAX PERFORMANCE SYSTEM
Account Maintenance - Sample Explanation Sheet
Credits and Refunds
State: _____________________ Period Covered: _______________ Date: _______________ Reviewer: _______________
Sample Type:
Case
Number
Employer
Identification Number
Acceptance
Expanded
Explanation
Page _____ of _____
ACCOUNT MAINTENANCE
BENEFIT CHARGING
PROGRAM REVIEW
COMPONENTS
SYSTEMS REVIEW
ACCEPTANCE SAMPLES
SYSTEMS REVIEW
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW INTERVIEW SHEET
Function
Reviewer
Persons Interviewed
Date
Name:
Documents Reviewed
Title:
VIII - 195
Title:
Form#:
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
VIII - 196
CHAPTER EIGHT
PROGRAM REVIEW
R 04/03
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recorded Information and Instructions
Recorded information and instructions should include procedures to assure that employer
accounts are accurately charged for benefits paid to claimants. The procedures should be
in accordance with State laws and written policies.
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 Benefit
Charging 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 "Other"
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 Benefit
Charging function.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
1.
Does the State have recorded information and instructions to assist employees in
processing the benefit charges properly in accordance with State laws and written
policies?
Yes
2.
No __
If yes, are all the recorded information and instructions:
Yes
a.
b.
c.
d.
Current? .....................................................................................................................
Accurate? ...................................................................................................................
Complete? ..................................................................................................................
Readily available to staff?..........................................................................................
VS:(Questions 1 and 2
3.
No
)
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 3
)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
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":
VIII - 201
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
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 Benefit Charging function. New
employees need to learn the procedures involved in charging employer accounts for
benefits paid to claimants. 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 Benefit Charging staff,
and after examining the training packages utilized.
In the narrative section following the questions, explain "Other"
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 Benefit
Charging function duties.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
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:
Yes No
a.
b.
c.
d.
e.
*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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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
3.
Does the State provide training when there are:
a.
b.
c.
d.
e.
4.
Yes No N/A
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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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
5.
*In the opinion of the supervisor or manager, does the training meet the needs of the
Benefit Charging 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
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
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":
VIII - 209
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recording of Transactions and Events
The State should have methods that benefit charging information (including but not
limited to the decision to charge or non-charge, amount of benefits charged, the date of the
charge, the claimant to whom benefits were paid, the individual who made the decision to
charge, appeals, etc.) is accurately recorded and that the source information is readily
available for examination. Whether the State system is automated or manual, an audit
trail should lead from the benefit charging data in the employer's account record to the
source document upon which the charge was based.
The reviewer must become familiar with the systems and procedures the
State uses to track benefit charges to the source documents (e.g., claimant
separation information, notice of charge or non-charge, benefit payment
and overpayment records, adjustments to charges, appeal notices, etc.)
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section. If there is no
audit trail maintained, then explain how the State is assured that the
employer benefit charging records are accurate.
VIII - 211
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
1.
Does the State have a method to track benefits charged to employer accounts for the
claimant to whom benefits were paid?
Yes
2.
No __
Does the audit trail identify:
Yes No
a. The amount of charges or credits (including electronic media)?.......................................
b. The date of the charge or credit? .......................................................................................
c. The State employee(s) who made the decision
to non-charge the employer?......................................................................................
d. The documentation to support denial of
the non-charging? ......................................................................................................
e. The documentation to support the allocation
of charges or credits to employers? ...........................................................................
3.
Is source documentation required to support updates to employer accounts?
Yes
VS: (Questions 1 – 3
No __
)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
4.
*Which of the following source documents does the State use to identify changes to
benefit charges:
Yes No
a.
b.
c.
d.
e.
f.
g.
h.
5.
*Claimant Separation Information?...........................................................................
*Notice of Charge or Non-charge? ............................................................................
*Benefit Payment Records?.......................................................................................
*Benefit Overpayment Notices? ................................................................................
*Monetary Redeterminations? ...................................................................................
*Appeal Notices? .......................................................................................................
*Electronic media?…………………………………………………………………
*Other Adjustment records? ......................................................................................
Are original and amended information sources, including electronic source
documentation, retained and accessible for State use?
Yes
No __
VS: (Question 5
6.
)
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 6
)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
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":
VIII - 215
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Systems to Assure Execution of Events
Systems should be in place to assure the execution of events such as accurately charging to
the employer's account or the pool account benefits paid to claimants. Systems should also
be in place to assure the reconciliation of benefits charged with benefits paid. The systems
may be automated or manual.
The reviewer must become familiar with the types of built-in checks used
by the State to assure the accurate charging to employer accounts for all
benefits paid.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section.
VIII - 217
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
1.
*Does the State use an automated benefit charge system to apply charges to employer
accounts or the pool account?
Yes
a.
If yes, is a review performed every time a program change is made?
Yes
2.
No __
No __
Are verification procedures in place to assure that benefit charges are correctly made by
comparing information sources to employer account transaction records?
Yes
No __
VS: (Question 1 (a) and 2
3.
)
Does the State reconcile benefits charged with benefits paid? (e.g., Is the State
accounting for all benefits paid by charging either the employer account or the pool
account?)
Yes
No __
If Yes, answer 3a - 3d.
If No, go to question 4.
VIII - 219
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
3.
a.
*Is the reconciliation performed by individual Social Security number (e.g., all
benefit checks issued to a claimant are reconciled with the benefit charges that are
charged to the claimant's employer(s) account(s) or the pool account)?
Yes
*If Yes,
b.
Frequency
*Are aggregate benefit charges reconciled with aggregate benefits paid?
If Yes,
c.
No __
Yes
No __
Yes
No __
Frequency
*Other?
In the Narrative Section, describe the method the State uses to reconcile out-of-balance accounts
(e.g., discrepancies charged to the general pool account or the overpayment accounts, etc. or
does State track each discrepancy in order to balance the accounts).
d.
*Provide the following data for the most recently completed calendar year (or
quarter) if available:
(1)
(2)
Amount of charges not reconciled to benefits paid:
Total Benefits Paid:
VS: (Question 3
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
4.
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 4
)
VIII - 221
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
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":
VIII - 223
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Review of Completed Work
For the Benefit Charging function, the State should be conducting systematic reviews for
accuracy of the benefit charge information being posted to the employer's account.
A review of completed work should be done on a regular basis for all staff
members involved in processing benefit charges for the employer's
account. 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 must become familiar with the kind of review program the
State uses to assess the work performed by the staff processing the
employer's benefit charges.
In the narrative section following the questions, explain "other" responses,
and describe compensating controls. Identify the question being explained
by referencing the number and section. If there is no review performed,
describe how quality is assured in the Employer Benefit Charging
function.
VIII - 225
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For all staff members involved in Employer Benefit Charging process, are the following components subject to some form of
systematic review. For Yes Answers, enter "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 which is the evaluative question.
Type of review
Component
a.
Benefits charged to the employer's account?
b.
Benefits charged to the general pool account?
c.
Balancing of the benefits paid to the benefits
charged?
VS: (Question 6)
* Informational
*1
Supv
*2
Peer
*3
QR
Qual.Rev.
*4
Support
(Clerical)
*5
Other
6
Review
Conducted?
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
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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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
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":
VIII - 231
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Benefit Charging
SYSTEMS REVIEW QUESTIONS
Additional Controls
1.
*Does the State have internal controls or quality assurance systems
for Employer Benefit Charging which this review failed to identify?
Yes
No __
If yes, describe below:
2.
*Are there any exemplary practices for the Employer Benefit Charging
function?
Yes
No __
If yes, describe below:
VIII - 233
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ACCEPTANCE SAMPLES
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Purpose/Intent
To assure accuracy of benefit charges posted to employer
accounts.
To assure that the State accurately maintains all data used
to determine benefit charges for an employer's account.
To assure that the State accurately issues benefit charge
Statements to employers.
Scope
The scope of the review will focus on benefit charges or
benefit credits posted to employer accounts during the
designated time period.
Where a non monetary decision has been issued on the
selected UI claim, the TPS review will focus on
implementation of the decision as it affects charging of the
selected employer. For instance, if a decision was made to
charge the employer – was that employer charged? The
decision itself or its merits will not be evaluated.
Universe
The universe to be identified for the Benefit Charging
Acceptance Sample will include:
1.
All employers with benefits charges posted to their
account, and
2.
All employers with credits issued for prior charges
posted to their account.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Timing/Frequency
The universe will be identified once during the calendar
year.
The universe covers either:
Sampling Procedures
1.
The 1st, 2nd, or 3rd quarter, if the State issues
benefit charge Statements on a quarterly basis, or
2.
A year, if the State issues benefit charge Statements
on a yearly basis or,
3.
A month if the State issues benefit charge
Statements on a monthly basis.
The following describes the steps to identify the universe and
select the sample accounts:
1.
Select the time period to review.
This will be either the 1st, 2nd, or 3rd quarter, or
the month or year. See Timing/Frequency above.
2.
Identify the universe.
The universe includes all employers who have
benefit charges and/or credits posted to their
account for the selected time period.
The universe will be identified immediately after all
benefit charges (or credits issued) have been posted
to the employer's account for the applicable time
period.
VIII - 238
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures
Cont.
3.
Select 60 samples.
The samples will be selected immediately after the
Benefit Charge Statements are produced for the
selected time period.
If the system is automated, the Reviewer must work closely
with ADP. A thorough understanding of what the sample
includes and when it is to be selected is essential.
Appendix A describes actions for sampling in both manual
and automated systems.
Reviewing the Samples
Assemble the following information for the employer's
account:
1.
A copy of the original benefit charge Statement or a
facsimile created from the ADP file that created the
original Statement.
2.
A print-out of the selected claimant's pay history.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Reviewing the Samples
Cont.
The claimant will be selected as follows:
a.
If there are credits on the employer's charge
Statement, select the last claimant with a
credit;
b.
If there are only debits on the charge
Statement, select the last claimant.
3. The documentation for the decision to charge or credit
the employer's account. This documentation will
consist of whatever is used in the State to substantiate
the charge or credit, whether a “canned” decision, text
customized for the situation, discharge or quit
decisions, etc. Whatever is needed for the reviewer to
ensure that the appropriate charging action was taken.
Note that the decision itself or its merits will not be
evaluated.
4.
The employer's account information on the State's
files.
Compare all documentation with the information on the
employer's Master File.
The review should be completed approximately 45 days
after selecting the sample.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Drawing Conclusions
Using this information, answer the questions on the Acceptance
Sample Questionnaire.
The following questions are evaluative:
#1
Accuracy of the charge or credit to the employer's
account.
#2
Accuracy of
a.
the employer's account number.
b.
the claimant's social security number.
c.
the time period for the charge or credit.
d.
the dollar amount charged (or credited).
A "No" answer to question 1, 2a, 2b, 2c, or 2d will mean
that the sampled account was not charged (or credited)
accurately and is not considered an acceptable case.
Of the 60 cases, if three or more are not acceptable, then
the reviewer must conclude that accuracy in the Employer
Benefit Charging function cannot be confirmed.
For all unacceptable cases, the reviewer must provide an
explanation for the unacceptable case on the Acceptance
Sample Explanation Sheet.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Documentation
All 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
ACCOUNT MAINTENANCE
Benefit Charging
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE QUESTIONNAIRE
Yes No
Accuracy of Charge or Credit
1.
Based upon the information available, did
the State properly charge or credit the employer's account?
____ ____
Accuracy of Charge Statement
2.
Did the charge Statement accurately reflect the correct:
a.
employer's account number?
b.
claimant's (former employee)
social security number?
c.
d.
the correct period of time for the
charge or credit? (e.g., were the charges for
benefits paid in August posted to the
3rd quarter charge Statement?)*
amount charged or credited for
benefits paid?
____ ____
____ ____
Yes
No NA
____ ____ ____
____ ____
*(Note: For CWC employers, time period
may not be that precise.)
VIII - 243
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TAX PERFORMANCE SYSTEM
Account Maintenance Sampling Coding Sheet
Employer Benefit Charging - Checklist #4
State: ___________
Sample Type:
Case
Number
Period Covered: ____________
Date: ___________
Acceptance
Employer
Identification
Number
Questions 1, 2a, 2b, 2c, and 2d are evaluative.
Reviewer: ____________________
Expanded
1
2a
2b
2c
2d
Pass/
Fail
Y/N
Total Acceptable _______ of _______
Page _______ of _______
TAX PERFORMANCE SYSTEM
Account Maintenance - Sample Explanation Sheet
Benefit Charging
State: _____________________ Period Covered: _______________ Date: _______________ Reviewer: _______________
Sample Type:
Case
Number
Employer
Identification Number
Acceptance
Expanded
Explanation
ACCOUNT MAINTENANCE
EMPLOYER TAX RATES
PROGRAM REVIEW
COMPONENTS
SYSTEMS REVIEW
ACCEPTANCE SAMPLES
SYSTEMS REVIEW
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW INTERVIEW SHEET
Function
Reviewer
Persons Interviewed
Date
Name:
Documents Reviewed
Title:
VIII - 255
Title:
Form#:
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recorded Information and Instructions
For Employer Tax Rates, recorded information and instructions should include procedures
to assure that employer tax rates are accurately computed and assigned. The procedures
should be in accordance with current State laws and State policies.
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 must also observe the Employer
Tax Rate 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 "Other"
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 computing
employer tax rates.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW QUESTIONS
1.
Does the State have recorded information and instructions to assist employees to properly
calculate and assign employer tax rates in accordance with State laws and State policies?
Yes
2.
No __
If yes, are the recorded information and instructions:
Yes No
a.
b.
c.
d.
Current? ......................................................................................................................
Accurate?....................................................................................................................
Complete?...................................................................................................................
Readily available to staff? ..........................................................................................
VS:(Questions 1 and 2
3.
)
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 3
)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW NARRATIVE
Question
Number
Explanation of "N/A" and "Compensating Controls"
(when deemed necessary)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
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 employer tax rate unit. New
employees need training to understand the procedures involved in computing and
assigning the tax rates. Experienced employees benefit from periodic refresher courses
and need additional training when changes occur, and when quality defects or a significant
number of errors appear in a particular area.
The reviewer should become familiar with the methods and procedures
the State uses to identify and meet training needs of employees
involved in computing employer tax rates.
In the narrative section following the questions, explain "other"
responses and exceptions to the questions. Identify the question being
explained by referencing the number and section. If there are no
training programs, describe how the staff know the laws, rules, written
policies and proper procedures to perform the Tax Rate process.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
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:
Yes No
a.
b.
c.
d.
e.
*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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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
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.
VS: (Questions 1-4
)
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW QUESTIONS
5.
*In the opinion of the supervisor or manager, does the training
meet the needs of the employer tax rate 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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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
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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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Recording of Transactions and Events
The State should have a method to assure that tax rates and tax rate changes are recorded
and the source of the information (including, but not limited to the data used for the tax
rate formula) is readily available for examination. Whether the State’s system is
automated or manual, an audit trail should lead from the tax rate recorded in the
employer's account record to the source document upon which the rate or rate change was
calculated.
The reviewer must become familiar with the systems and procedures
the State uses to trace the elements used in rate computations and rate
assignments to their source.
In the narrative section following the questions, explain "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 tax rate calculations have been made.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW QUESTIONS
1.
Does the State have a method to assure that the elements used to compute or change tax
rates can be traced to their source (even if source is via electronic media)?
Yes
2.
Does the audit trail identify the following information:
a.
b.
c.
3.
No __
Yes No
The information used to calculate rates
(including surtax rates)? .............................................................................................
The date of the information used in tax
calculations? ...............................................................................................................
The State employee who authorized
changes to a tax rate? .................................................................................................
Is a source document required to support tax rate changes?
Yes
No __
VS: (Question 1-3
4.
)
Are original and amended tax rate information sources, including electronic source
documents, retained and readily accessible to support rate computations and assignments?
Yes
VS: (Question 4
No __
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW QUESTIONS
5.
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 the questions.
VS: (Question 5
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
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
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Systems To Assure Execution of Events
Systems should be in place to assure that every employer tax rate is accurately computed
and assigned in accordance with State law and State policies. The checks may be manual
or automated. Systems should also be in place to assure the elements used to calculate tax
rates are maintained, and that employers are experience rated when they should be.
The reviewer must become familiar with built in systems and automated
or manual controls used by the State for computing and assigning of tax
rates.
In the narrative section following the questions, explain "Other"
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 the
correctness of tax rate calculations.
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW QUESTIONS
1.
*Does the State have an automated system for calculating employer tax rates?
Yes
a.
If Yes, is a system check performed every time there is a program change?
Yes
b.
No __
Is there a system check prior to mailing rate notices?
Yes
2.
No __
No __
Is there a check of the math computations used in tax rate calculations?
Yes
No __
VS: (Question 1 (a-b) and 2
3.
)
Is there a control to assure that accounts which are eligible to be experienced rated are
assigned an experience rate when applicable?
Yes
VS:(Question 3
No __
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW QUESTIONS
4.
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 the questions.
VS: (Question 4
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
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
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
SYSTEMS REVIEW
Review of Completed Work
For the Employer Tax Rate function, the State should be conducting systematic reviews for
accuracy of the rate calculations, and of the changes made to employer tax rates.
The reviewer must consider the kind of supervisory program and/or
quality assurance review the State uses to assess the Employer Tax Rate
processing unit. Is the review procedure different for new employees? If
the State uses a quality assurance review, who (position and
organizational location) performs it? A review of completed work should
be done on a regular basis for all staff members involved in making
changes to employer tax rates. This review may be done on an individual
basis for each staff member, or by sampling work done throughout the
entire unit.
In the narrative section following the questions, explain "Other"
responses, and describe "Compensating Controls". Identify the question
being explained by referencing the number and section. If there is no
supervisory and/or quality assurance review, describe how quality is
assured in the Employer Tax Rate function.
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For all staff members involved in Employer Tax Rate process, are the following components subject to some form of systematic
review. For Yes answers, enter "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 which is the evaluative question.
Type of review
Component
a.
Tax Rate notices issued to the employers?
b.
Changes made to employer tax rates?
VS: (Question 6
* Informational
*1
Supv
*2
Peer
*3
QR
Qual.Rev.
*4
Support
(Clerical)
*5
Other
6
Review
Conducted?
)
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
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 the questions.
VS: (Question 7
)
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ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
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
ACCOUNT MAINTENANCE
CHAPTER EIGHT
PROGRAM REVIEW
Tax Rates
SYSTEMS REVIEW QUESTIONS
Additional Controls
1.
*Does the State have internal controls or quality assurance systems in the Employer Tax
Rate function which this review failed to identify?
Yes
No __
If yes, describe below:
2.
*Are there any exemplary practices for the Employer Tax Rate function?
Yes
No __
If yes, describe below:
VIII - 291
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ACCEPTANCE SAMPLES
ET HANDBOOK NO.407
TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Purpose/Intent
........... ...........To assure accuracy of the computation of employer's tax
rate.
To assure that the State accurately maintains all data used in
computation of the employer's tax rate.
Scope
........... ...........The scope of the review will focus on tax rates assigned to
experienced rated employers who are active at the time the
universe is identified.
Universe
........... .........The universe to be identified for Employer Tax Rates will
include all active contributory employers who are
experience rated on the date the universe is identified.
The universe will exclude:
1. ........All reimbursing employers.
2. ........All non-experience rated contributory employers.
3. ........All employers who are not active on the date the
universe is identified.
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ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Timing/Frequency
........... .........The universe will be selected once during the calendar year.
.........The universe will be identified after processing is
completed for the tax rate notices to be issued during the
review year.
If the previous year’s samples of Tax Rates, Contribution
Reports and Benefit Charges passed TPS review, and there
have not been changes to the State’s tax rating system that
could have an impact on the accuracy of rate computation,
the next examination of Tax Rates can take place at any
time during the next four calendar years. Tax Rates are
subject to TPS review some time within a four-year cycle.
If one or more of the above mentioned tax functions do not
pass TPS review, the Tax Rate sample must be conducted
the following year.
Sampling Procedures ........... .........The following describes the steps to establish the universe
and select the sample accounts.
1. ........Determine the date the universe can be identified.
This date will vary from State to State. It will be after all
the factors required to calculate the tax rates are available.
2. ........Identify the universe.
The universe includes all active contributory experience
rated employers who will receive tax rate notices issued
during the calendar year being reviewed by TPS. The tax
rate notices may be for the current year or for the following
year.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Sampling Procedures
Cont.
........... ........... ...........E. g., During a 2004 TPS review, in a State which
issues 2004 tax rate notices in January, 2004, a
sample of the 2004 notices issued in January would
be selected and reviewed. For a State which issues
2005 tax rate notices in November, 2004, a sample
of the 2005 notices issued in November, 2004
would be selected and reviewed.
3. ........Select 60 samples.
The samples will be selected from the universe immediately
after the rate notices are prepared.
.........If the system is automated, the Reviewer must work closely
with ADP. A thorough understanding of what the sample
includes and when it is to be extracted is essential.
.........Appendix A describes what action needs to be taken for
sampling in both manual and automated systems.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Reviewing Samples
........... .........Identify which of the following items are included in the
State's rate computation formula:
a..........total benefit charges? ........................................_____
b. ........total benefit wages? ......................................... _____
c..........total taxable wages?.........................................._____
d. ........taxes paid? ........................................................_____
e..........total payroll wages? .........................................._____
f. .........reserve balance?................................................_____
g. ........other? (describe) ..............................................._____
.........Assemble the following information for the employer's
account:
1. ........Copies of the contribution reports and any
adjustments to these reports used in the tax rate
calculation for the most recent 4 quarters of the
calculation period.
2. ........The benefit charges used in the tax rate calculation
for the most recent four quarters of the calculation
period.
3. ........Information from the employer's data file used in the
tax rate calculation.
4. ........The State's experience rate factor (e.g., tax table,
schedule, ratio, etc.).
5. ........Any other factors used by the State to calculate the
employer’s tax rate.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Reviewing Samples
Cont.
.........Compare all documentation with the information on the employer's
account record.
.........The review should be completed within 60 days after
selecting the sample.
Drawing Conclusions
Using this information, answer the questions on the
Acceptance Sample Questionnaire. Note that the reviewer
will not evaluate the accuracy of the contribution report
data, only the accurate compilation and computation of the
data.
Questions #1, 2, and 3 are all evaluative.
#1. ......Accuracy of the computation.
#2. ......Accuracy of the experience rate factor.
#3. ......Accuracy of any solvency surtax the State may use.
A "No" answer to question #1, 2, or 3 will mean that the
sampled account was not processed accurately and is not
considered an acceptable case.
Of the 60 cases, if three or more are not acceptable, the
reviewer must conclude that accuracy in the Employer Tax
Rate function cannot be confirmed.
For all unacceptable cases, the reviewer must provide an
explanation for the unacceptable case on the Acceptance
Sample Explanation Sheet.
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TAX PERFORMANCE SYSTEM
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE INSTRUCTIONS
Documentation
........... ...........All 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
ACCOUNT MAINTENANCE
Tax Rates
CHAPTER EIGHT
PROGRAM REVIEW
ACCEPTANCE SAMPLE QUESTIONNAIRE
Accuracy of Annual Tax Rate Notice
Yes No N/A
1.
2.
3.
Were all employer specific items
(e.g, wages, benefits, reserve
balance, etc.,) accurately
reflected on the tax rate notice?
____ ____
Were all the State specific items,
(e.g., tax table, schedule, ratio, etc.)
accurately reflected on the tax
rate notice?
____ ____
If there is a solvency surtax charge,
were the correct figures for the
surcharge accurately reflected on
the annual tax rate notice?
____ ____ ____
VIII - 301
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TAX PERFORMANCE SYSTEM
Account Maintenance Sample Coding Sheet
Employer Tax Rates - Checklist #5
State: _________
Period Covered: ______________
Sample Type:
Date: ________________
Reviewer: ____________________
Acceptance
Case
Number
Employer
Identification
Number
All Questions are evaluative.
Expanded
1
2
3
Pass/
Fail
Y/N
Total Acceptable _______ of ______
Page _______ of ______
TAX PERFORMANCE SYSTEM
Account Maintenance - Sample Explanation Sheet
Employer Tax Rates
State: _____________________ Period Covered: _______________ Date: _______________ Reviewer: _______________
Sample Type:
Case
Number
Employer
Identification Number
Acceptance
Expanded
Explanation
| File Type | application/pdf |
| File Title | Microsoft Word - Chapter 8.doc |
| Author | MacDonald |
| File Modified | 2008-01-08 |
| File Created | 2008-01-08 |