1205-0187 Supporting Statement_FINAL 7.10.17

1205-0187 Supporting Statement_FINAL 7.10.17.doc

Overpayment Detection and Recovery Activities

OMB: 1205-0187

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Overpayment Detection and Recovery Activities

OMB Control No. 1205-0187

July 2017


SUPPORTING STATEMENT

Overpayment Detection and Recovery Activities

OMB Control No. 1205-0187


A. Justification.


1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.

  1. Legal Basis. Section 303(a)(1) of the Social Security Act requires a state's Unemployment Compensation (UC) law to include provisions for:


"Such methods of administration ... as are found by the Secretary of Labor to be reasonably calculated to insure full payment of unemployment compensation when due..."


Section 303(a)(5) of the Social Security Act further requires a state's UC law to include provisions for:


"Expenditure of all money withdrawn from an unemployment fund of such State, in the payment of unemployment compensation..."


Section 3304(a)(4) of the Internal Revenue Code of 1954 provides that:


"All money withdrawn from the unemployment fund of the State shall be used solely in the payment of unemployment compensation..."


The Secretary of Labor has interpreted the above sections of Federal law in Section 7511, Part V, ES Manual (Handbook 401) to further require a state's unemployment compensation (UC) law to include provisions for such methods of administration as are, within reason, calculated (1) to detect benefits paid through error by the state UC agency or through willful misrepresentation or error by the claimant or others, (2) to deter claimants from obtaining benefits through willful misrepresentation, and (3) to recover benefits overpaid under certain circumstances.


  1. Program Operational Need. Form ETA 227 is used to determine whether state UC agencies meet the requirements of the Secretary's interpretation of the Federal laws above, and to measure state UC agencies’ performance for Benefit Payment Control (BPC). This information is critical to agency administrators and Department of Labor (DOL) staff to analyze the effectiveness to the states’ efforts to detect and recover improper payments. The data collected are used to report and track the detection and recovery of overpayments in each state. In addition to reporting actual data, it is used to track performance based on the Benefit Accuracy Measurement predictions. It is the only source for obtaining the necessary data. The data reported on the form include both intrastate and interstate claims for the regular state UC program, the Federal-State Extended Benefits (EB) program, the Unemployment Compensation for Federal Employees (UCFE) program, and the Unemployment Compensation for Ex‑Service members (UCX) program. This request for approval to extend the present reporting requirement for another three years is necessary since there are no other reports that contain these data.


2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.


The ETA 227 contains data on the number and amounts of fraud and non-fraud overpayments, the methods by which the overpayments were detected, the amounts and methods by which overpayments were collected, the amounts of overpayments waived and written off, the accounts receivable for the overpayments outstanding, and data on criminal/civil actions.


These data are gathered by 53 State Workforce Agencies (SWAs) and reported to the DOL following the end of each calendar quarter. Annual data are compiled and analyzed to determine the effectiveness of the controls in place for preventing, detecting, and recovering benefit overpayments and to plan and budget for this vital program function.


The ETA 227 report was updated under UIPL No. 08-12, Change 1, Consolidation of the Employment and Training Administration (ETA) 9000 and ETA 227 Reports, July 27, 2015. The UIPL explains changes in detail, including both modifications to elements already included in the facsimile of form and additions and changes to the definitions in the report to collect new data (using preexisting cells) that assess the states’ integrity efforts.


3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden.


States must report this data electronically to the DOL, and have been doing so for a number of years. States submit reports through a web-based computer system. This is the only way to submit reports and ensures a consistent, timely submission. On an exception basis (hardware or software problems), SWAs may transmit hard paper copy.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.


There is no similar information available that can be used or modified that can furnish the overpayment detection/recovery data contained on the Form ETA 227.




5. If the collection of information impacts small businesses or other small entities, describe any methods used to minimize burden.


The data collected from this reporting requirement does not involve small businesses or other small entities.


6. Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.


The ETA 227 report is used by the states to summarize the results of BPC activity. This information is not captured elsewhere. The report provides critical information on the results of BPC investigations of specific issues and alleged fraud and resulting overpayments that have been identified and overpayments collected. Such information allows state and Federal managers to evaluate the effectiveness of the principal integrity functions in the UC program and assess whether they have deployed their BPC resources effectively.


Any less frequent collection of these data would weaken DOL’s ability to provide timely information for program managers within the SWAs and the DOL staff charged with ensuring that the Secretary’s responsibilities are carried out.


7. Explain any special circumstances that would cause an information collection to be conducted in a manner that requires further explanation pursuant to regulations 5 CFR 1320.5.

There are no special circumstances that would require the collection of this information to be conducted in a manner that is not consistent with the guidelines contained in 5 CFR 1320.5.


8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.


Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.


Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years - even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.


In accordance with the Paperwork Reduction Act of 1995, the public was allowed 60 days to comment through the Federal Register Notice posted on March 15, 2017 (82 FR 13855). No public comments were received.


9. Explain any decisions to provide payments or gifts to respondents, other than remuneration of contractors or grantees.


There are no payments or gifts to respondents.


10. Describe any assurance of confidentiality provided to respondents and the basis for assurance in statute, regulation, or agency policy.


Assurance of confidentiality is not necessary for this report since only cumulative data is reported.


11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.


The information contained in this report does not involve questions of a sensitive nature.


12. Provide estimates of the hour burden of the collection of information.


All states use this report as a part of information management system for their normal data processing operations. Based on previous experience and information reported by state personnel, it is estimated that it takes state agencies a total of 2,968 hours per year to run a retrieval program, review the results and transmit the results through the electronic reporting system. This disaggregates to 14 hours per submission per quarter per state (53). Following is the calculation:


Number of respondents -- states 53

Frequency of report -- quarterly 4

Total number of responses (53 x 4) 212

Estimated hours per state per report 14

Annual burden hours (212 x 14) 2,968


Average hourly wage $47.20

Annual cost burden (2,968 x $47.20*) $140,089.60



The following table can be used as a guide to calculate the total burden of an information collection.


Activity

Number of Respondents

Annual Frequency

Total Annual Responses

Time Per Response (Hours)

Total Annual Burden (Hours)

Hourly Rate*

Monetized Value of Respondents Time


ETA 227

53

4

212

14

2,968

$47.20

$140,089.60

Unduplicated Totals

53


212


2,968


$140,089.60

*Source: The hourly rate is computed by dividing the FY 2016 national average PS/PB annual salary for state staff as provided for through the distribution of state UI administrative grants (http://wdr.doleta.gov/directives/attach/UIPL/UIPL_21-15.pdf) by the average number of hours worked in a year (1,711). For FY2016, this calculation was: $80,756 / 1,711 = $47.20.


13. Provide an estimate for the total annual cost burden to respondents or record keepers resulting from the collection of information. (Do not include the cost of any hour burden already reflected on the burden worksheet).


There are no annual costs in addition to those in item 12 above.


14. Provide estimates of annualized costs to the Federal government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any other expense that would not have been incurred without this collection of information. Agencies may also aggregate cost estimates from Items 12, 13, and 14 in a single table.

During FY2016, ETA has budgeted $839,171.90 to operate and maintain the Unemployment Insurance Required Reports system. Including the subject ICR, this system supports 30 information collections. For administrative purposes, each information collection is assumed to contribute an equal share of the cost for supporting the entire system; therefore the cost allocated to this ICR is estimated to be $27,972 ($839,171.90 system cost/30 information collections). Estimated costs for review and oversight are as follows:


Federal Oversight
GS-12, Step 1

Locality Pay adjustment based on regional office location

Current 75% of time oversight (40% benefit package)




$73,846

25.19%

Boston

$69,335.86


$73,846

21.79%

Philadelphia

$67,452.78


$73,846

19.58%

Atlanta

$66,228.79


$73,846

21.04%

Dallas

$67,037.40


$73,846

25.44%

Chicago

$69,474.32


$73,846

35.75%

San Francisco

$75,184.46


$73,846

24.78%

National Office

$69,108.78


 

 

Total

$483,822.38


Federal Oversight
GS-15, Step 1

 

Management

Current 15% of time oversight
(40% benefit package)


$102,646

25.19%

Boston

$19,275.38


$102,646

21.79%

Philadelphia

$18,751.88


$102,646

19.58%

Atlanta

$18,411.61



The report format is basic fillable PDF form/document and will be provided to the state UI agencies, so there are no capital/startup costs for the state UI agencies and there are no other parties who are impacted by this reporting.


Federal costs include the six regional staff required to assist in the data collection and analysis of the data, and the maintenance the Adobe PDF tool by one National Office staff.  The staff costs are summarized as follows:


Estimated hours for each staff used for data analysis are approximately 75 % of their annual work hours (i.e. 2,080 hours).


15. Explain the reasons for any program changes or adjustments reported on the burden worksheet.

This ICR does not seek approval for discretionary changes. The Department must make changes to the ETA 227 reporting instructions to comply with Executive Order 13520, Reducing Improper Payments; the Trade Adjustment Assistance Extension Act of 2012 (TAAEA), as well as to provide reporting instructions for preexisting cells, which had not been previously provided. There are no changes in the burden estimate other than the one time burden for programming the changes to this report.


16. For collections of information whose results will be published, outline plans for tabulation and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

Data reported on the Form ETA 227 are summarized periodically and distributed to the users: state workforce agencies and DOL regional offices.


17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons why display would be inappropriate.

ETA displays the OMB approval number and expiration date.


18. Explain each exception to the topics of the certification statement identified in “Certification for Paperwork Reduction Act Submissions.”

There are no exceptions.



B. Collections of Information Employing Statistical Methods


This information collection does not employ statistical methods.



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