U.S. Dept. of Labor’s Tax Performance System TPS Reviewer Training.

U.S. Dept. of Labor’s

Tax Performance System

TPS Reviewer Training

Welcome to TPS

Scope of Training: Overview of TPS Federal Oversight Federal Oversight Programs Design of TPS

Computed Measures Systems Review of State’s Internal Controls Sampling of Tax’s Outputs

Assessing Quality Reporting Data End - links

Overviewof TPS

Welcome to TPS

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Let’s begin with an Overview

Overview

TPS is a performance management tool for States and the Federal government.

TPS Handbook 407 provides a set of instructions for evaluating quality of State UI tax operations.

How does this work?

Welcome to TPS

End

Reports Data

Quality Assess.

Design of TPS

Federal Oversight

Overviewof TPS

Overview Cont.

You examine and evaluate your State’s UI tax system and TPS is your tool. Identify any problem areas:

Weaknesses in State’s system of internal controls

Samples of each tax function’s outputs to check for accuracy

Report this data into web-based system once each year “SUN System”.

Work with State and Regional partners to improve tax operation.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Overview Cont.

What is the Federal role? Monitor States’ UI tax systems

If problems are discovered, the Regional office works with the State to propose solutions.

Receive a “State Quality Service Plan” for any improvements necessary.

If Corrective Action is needed, monitor to ensure agreed-upon actions

are taken.

“Inspect what you expect”

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Overview Cont.

Ensure TPS is in place and operating as intended Once every four years, neighboring States and Region

examine a State’s most recent CY TPS findings. “Federal Team Reviews” are organized and conducted by

Regional staff. Team Reviews promote consistency in application of TPS

between States. Team Reviews facilitate exchange of information and best UI

tax practices between States.

Ensures integrity of the TPS program.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Overview Cont.

Report to Congress via Government Performance and Results Act (GPRA) Long term, 5 year plans For UI Tax, GPRA reports on the timeliness of

new employer status determinations. Example: By 2012, at least 86.7% of new employer

status determinations should be completed by the end of the quarter in which the employer became liable.

Now, for more details on Federal oversight.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Federal Oversight

The US DOL’s oversight system for UI tax, UI benefits and the validation of UI data is called “UI Performs”.

TPS BAM BTQ DV

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Federal Oversight Cont.

Several years’ of discussions with States and DOL resulted in “UI Performs”.

State performance is measured by TPS, Benefit Accuracy Measure (BAM), Benefit Timeliness & Quality (BTQ), and Data Validation (DV). TPS is an examination of State tax operations using two

aspects of performance: Timeliness and Quality. BAM is a statistical survey to determine the accuracy of

paid and denied UI claims. BTQ is a quality review that provides an assessment of

the adequacy of the State’s fact finding application of law, policy and written nonmonetary determinations.

DV verifies the validity of the reports which are used for assessing performance of the State’s UI program.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End


The Department has added emphasis on certain performance measures: “Core Measures”.

Core Measures have been assigned certain “Acceptable Levels of Performance” (ALP).

If scores fall below these levels, corrective action may be necessary. Note this is separate from the GPRA measures reported

to Congress.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End


UI Tax Core Measures

1. Timeliness 70% or more new employer

status determinations must be made timely.

2. Quality Less than four out of the

thirteen tax functions sampled can fail.

3. Quality Over Time No tax function can continue

to fail for three successive years.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

PassFail


Core Measures of UI Tax

Tax Timeliness Tax Quality

Computed Measure Passes?

At least 70% of determinations made

within 90 days

Samples Pass?

Three or less fail out of 13

samples

Samples PassOver Time?

A sample can not fail 3

successive years

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

End

Report Data

Quality Assess.

Failure to conduct one or more TPS sample reviews also results in the need for corrective action (unless the universe is too small to sample or a temporary Federal waiver has been granted).

Corrective Action Plans may be necessary if TPS is not conducted according to Federal guidelines as noted in TPS Handbook 407.



The flow of TPS data:

TPS Reviewer State Administrator

Regional OfficeNational Office

Congress

Next, more detail on the design of TPS.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Federal Oversight

Design of TPS

To measure tax performance, TPS examines the States’ major tax functions.

Two different methodologies used: Computed Measures Program Reviews

Systems Reviews Sampling

At the end of each year, TPS findings and any recommendations are submitted.

Let’s look at this step by step.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess,

Report Data

End

Design of TPS Cont.

Every calendar year, TPS evaluates the timeliness and quality of State tax operations.

The TPS reviewer examines 13 major tax functions once per CY.

Experience Rating is only once every four years – see 407 Handbook for details.

TAX FUNCTIONS EXAMINED

STATUS DETERMINATION

New Determinations

Successor Determinations

Inactivation's/ Terminations

CASHIERING

REPORT DELINQUENCY

COLLECTIONS

FIELD AUDIT

ACCOUNT MAINTENANCE

Report Processing

Debits/Bills contributory

Debits/Bills reimbursing

Credits/Refunds

Benefit Charging

Experience Rating

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

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Several methodologies are used: Computed Measures Program Reviews


Design of TPS Cont.

Next, we will discuss Computed Measures.

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Design of TPS Cont. Computed Measures Component

TAX FUNCTIONS

EXAMINED

STATUS

DETERMINATION

-New determinations within 90 days

-New determinations within 180 days

-Successor determinations within 90 days

-Successor determinations within 180 days

CASHIERING -N/A

REPORT

DELINQUENCY

-Timely reports

- Reports secured within 90 days

-Reports sec. or resolved within 180 days

COLLECTIONS -Timely payments

-Uncollectible

-Accounts receivable

FIELD AUDIT -Change in total wages

-Contributory employers audited

- Total wages audited (annualized)

ACCOUNT

MAINTENANCE

-N/A

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

COMPUTED MEASURES

Design of TPS Cont.

Computed Measures We rely on existing reports that each State

automatically submits every quarter. Data are then computed and show

performance in terms of: Timeliness (Ex: percent of timely determinations) Numbers (Ex: percent of debt declared un-

collectable, percent of employers audited)

Data Validation program, under the

UI Performs umbrella, ensures

Federal definitions are used.

Welcome to TPS

Overview of TPS

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Design of TPS Cont.

Computed Measures

TPS reviewers have access to automated, “Computed Measures” data via the following link: www.ows.doleta.gov/TPSWP-cm-cmc/web.jsp.

Note that the SUN system also provides State-specific data. This will be discussed during “Reporting Data”.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Computed Measures At the end of the calendar year when evaluating

the tax system, the Computed Measures should be factored into the mix.

This will be demonstrated later in the presentation.

In addition to the Computed Measures’ data, on tax timeliness, information about tax quality is needed.

Next, we will discuss TPS’ Program Reviews.

Design of TPS Cont.Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

Quality Assess.

Report Data

End

Design of TPS Cont.Program Reviews

TAX FUNCTIONS

EXAMINED Systems Reviews

Examination of Internal controls which ensure:

Samples

To confirm that internal controls are working - examination of:

STATUS

DETERMINATION

-Accuracy of new determinations-Accuracy of successor determins -Accuracy of inactive determinations

-New determinations -Successor determinations -Inactive determinations

CASHIERING Timeliness of remittance processing Employer remittances

REPORT DELINQUENCY Accurate id of delinquent employersTake actions to secure/resolve rpt del

Accounts w/ delinquent reports

COLLECTIONS -Take actions to manage acts recv -Accounts receivable

FIELD AUDIT -Ensure audits meet requirements -Completed audits

ACCOUNT MAINTNANCE -Accuracy of contrib.rpt processing-Accuracy of billings-Accuracy of credits/refunds-Accuracy of benefit charging-Accuracy of experience rating

-Active contributory accounts -Contrib./reimb. Accounts receivable -Accounts payable credits/refunds -Accounts due benefit charges -Employer experience ratings

Program Review

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Design of TPS Cont. Program Reviews

Program Reviews provide context –

a look at the UI tax system as a whole Program Reviews consist of:


Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS

End

Report Data

Quality Assess.

Design of TPS Cont.Program Reviews: Systems Reviews

Systems Reviews are conducted once every four years unless the State has made system changes or problems have been discovered.

They are the most time-consuming of TPS activities For each tax function, TPS conducts a thorough

examination of the function’s Internal Controls & Quality Assurance systems.

These controls are supposed to be in place, working together to ensure that the tax operation is producing accurate outputs.

If controls are missing, the tax function is deemed to be “at risk”.

End

Report Data

Quality Assess.

Design of TPS

Welcome to TPS

Overview of TPS

Federal Oversight

Design of TPS Cont.

Program Reviews: Systems Reviews

Handbooks For instance, does the status function

have adequate and up-to-date handbooks and recorded instructions for staff to do its job?

Training Does the collections unit provide training

on the collections tools available to them?

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Welcome to TPS

Overview of TPS

Major Internal Controls:

Design of TPS Cont. Program Reviews: Systems Reviews

Supervisory Review Is the completed work of the

Refunds/Credit staff subject to

review by supervisors or others

from time to time?

Audit Trail Are field auditors required to examine

employer source documents when examining payroll records and do the auditors provide documentation that this has been done?

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS


Design of TPS Cont. Program Reviews: Systems Reviews

Authorized Individuals Does the State’s cashiering operation

only allow certain individuals access to employer remittances?

Checks & Balances Does the report delinquency unit have

tracking systems to follow up when employers promise to submit

delinquent reports?

After a review of each tax function controls,

small samples are examined.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS


Design of TPS Cont. Program Reviews: Sampling

Small Samples reviewed 1 x year, to ensure internal controls are working as intended. Reviews examine the work each tax

unit did during the CY under review. State IT unit should be building the universe from

which each sample will be selected. At specific times during the year, samples should

be automatically extracted for review.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Design of TPS Cont.Program Reviews: Sampling

Each of the tax functions’ universes should have 60 samples extracted (Exception of Cashiering).

TPS reviewer should ensure that this is taking place! Out of 60, if 3 or more cases fail, the tax function does

not have “reasonable assurance of quality”. With such a small sample, it is a rough guide (just a

warning flag). If there is disagreement about the sample’s findings

A second sample can be extracted. If an actual error rate is needed– see Handbook 407 on

Expanded Sample.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS


A Quick Run Through: Status Determinations

All new, successor and inactivation determinations that have been made during the CY.

Examine 60 each for accuracy.

Cashiering Employer checks sent for the 2nd q of CY. Sample 500 checks for timeliness of deposit.

Report Delinquency Employers whose 1st q reports are delinquent. Examine 60 a few months later for actions taken.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS


A Quick Run Through Cont. : Collections

A one-day snapshot of active receivables. Review 60 a few months later for collections actions taken.

Field Audits All audits completed 1, 2 and 3rd q of CY. Review 60 for adherence to ESM requirements.

Account Maintenance Contribution Reports

A one day snapshot of active employers for the 1st q. Review 60 at the end of the quarter for accuracy in processing.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS


A Quick Run Through Cont. : Debits/Bills

Select one quarter and identify all contributing & reimbursing employers who owe money.

Look at 60 contributions and 60 reimbursements - were the debits/bills processed correctly?

Credits/Refunds Select one quarter and identify employers who are owed

money. Look at 60 - were the credits or refunds established properly?

Benefit Charges Identify all employers who have been charged for UI benefits. Review 60 charges to ensure accuracy.

Experience Ratings Identify employers who are to receive experience rate notices. Examine 60 employer accounts to confirm accuracy of rates.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Quality Assessment

Each sample will either pass a quality review or fail. There should be a correlation between a sample that

passes and “no risk”, found in that tax function’s set of internal controls. Ex: Benefit Charge unit has controls in place = sample

passes. If a sample fails, it could be related to problems

(“risks”) in the tax function controls. Ex: Status unit has outdated manuals and little training

= failed sample.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Quality Assessment Cont.

Systems Reviews

Samples Consistency?

No Risk Found Sample Passes Consistency

No Risk Found Sample Fails Inconsistency

Risk Found Sample Passes Inconsistency

Risk Found Sample Fails Consistency

Program Reviews Possible Outcomes

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS


When CY has ended, you produce an Annual Report by end of May

Report identifies strengths and weaknesses SR findings – are there problems in State’s system of

internal controls? Sampling – have samples failed test of accuracy? Computed Measures – are tax systems operating

timely? Recommendations for improvement Goes to State administrator State and RO discuss problems and plans for improvement

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS


You have spent months and months evaluating State’s tax operations. As you come to conclusions, keep the tax units appraised – no surprises at end of year. National Office needs TPS data

Data entry into SUN by March 31 of each year CY 1 enter data by March 31 of CY 2.

Here is what the TPS Web Application Menu looks like

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Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Report DataTPS Web Applications Menu

Selecting the “Computed Measures” option will lead to these screens….

Place-holder

Welcome to TPS

Overview of TPS

Report Data

Quality Assess.

Design of TPS

Federal Oversight

End

Report Data Cont.Computed Measures Path

Selecting the Computed Measures

options will lead you to

these screens.

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Select the Report Type and Year.

Then, Select either:

Measures,

Database Display

Formulas.

The states’ scores will be displayed.

Or the actual data the state has entered will be displayed.

Or the formulas will be displayed.…

Report Data Cont.Sampling Path

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Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Select the Sampling option and it will lead you to these

screens.

Select a year and then enter your sampling data.

Report Data Cont. Systems Review Path

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Select the Systems Review

option and it will lead you to

this menu.

Select a year and enter

your sampling data.

Report Data Cont.ET 581Contribution Report Path

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

Select the 581 option and it

will lead to this screen.

Select a Year and Quarter and you will

see the states’ 581

Report.

Links

TPS Universe and Sampling Details

TPS Small Universes and Sample Sizes

TPS Guide to Writing an Annual Report

TPS and Tax Contacts List

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

End

Report Data

Quality Assess.

Design of TPS

Federal Oversight

Overview of TPS

Welcome to TPS

U.S. Dept. of Labor’s Tax Performance System TPS Reviewer Training.

Documents

overview tps

application of tps

tps program

tps handbook

tps end reports data

tps sample reviews

tps scope of training

overview slide