Skip to Content


Proposed Modification to Unemployment Insurance (UI) Benefit Accuracy Measurement (BAM) Investigative Procedures; Submitted for Public Comment and Recommendations

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble




The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95) [44 U.S.C. 3506(c)(A)]. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Employment and Training Administration (ETA), Office of Workforce Security, is soliciting comments concerning the proposed modification of the case investigation procedures for the BAM data collection. A copy of the proposed information collection request (ICR) can be obtained directly by accessing this Web site:​Performance/​guidance/​OMBControlNumber.cfm.


Written comments must be submitted to the office listed in the ADDRESSES section below on or before April 24, 2006.


Andrew W. Spisak, U.S. Department of Labor, ETA, Room S-4522, 200 Constitution Avenue, NW., Washington, DC 20210, Phone: 202-693-3196 (This is not a toll-free number), Fax: 202-693-3975, e-mail:

End Preamble Start Supplemental Information


I. Background

During fiscal year (FY) 2003, the Department of Labor Office of the Start Printed Page 9165Inspector General (OIG) conducted an audit of the BAM program. The OIG final report (OIG Report Number 22-03-009-03-315, September 30, 2003) concluded that the BAM program is methodologically sound and accurately detects and reports UI payment errors; however, the BAM case investigation procedures potentially miss overpayments caused by unreported earnings during the claimant's benefit year. The OIG recommended that the BAM audit procedures be modified to include crossmatching UI beneficiaries' Social Security Numbers (SSN) against the state's intrastate wage records or the State Directory of New Hires (SDNH).

The use of the state wage record files was considered when BAM was designed but was not included in the methodology because the data are not available in time to insure the completion of BAM case investigations within the 90-day timeliness standard which was set to insure that information bearing on the propriety of UI payments is accurate and contemporaneous. Use of the SDNH as a BAM audit resource is encouraged but not required by the current BAM State Operations Handbook (ET Handbook No. 395, 4th ed., chapter VI, p. 5):

The potential for claimant employment during the benefit year should be verified using the State Directory of New Hires where available. This new hire directory is mandatory under section 453A of the Social Security Act, and BAM should access this resource when possible.

Following the OIG's recommendation, ETA conducted a pilot test of wage record and SDNH crossmatches as part of the BAM case investigation methodology between August 2004 and June 2005. Seven states participated—Alabama, Idaho, Illinois, Maine, Missouri, South Carolina, and Washington. The pilot showed that use of either the wage record or SDNH crossmatch resulted in increased detection of UI overpayments. Use of wage record data resulted in an estimated increase of 0.36 percentage points in the overpayment rate, and use of the state new hire data added an estimated 0.45 percentage points to the overpayment rate. The complete BAM Crossmatch Pilot Final Report is at​unemploy/​pdf/​xmatch_​pilot_​report.pdf.

The states that participated in the BAM crossmatch pilot reported no significant implementation or operational issues.

II. Review Focus

The Department of Labor is particularly interested in comments which:

  • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
  • Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
  • Enhance the quality, utility, and clarity of the information to be collected; and
  • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.

III. Current Actions

Based on the results of the pilot, ETA concluded that of the two methods tested, crossmatching BAM cases with the new hire directory is superior for the following reasons.

  • Investigating cases identified by the state wage record crossmatch costs a little more than twice as much as investigating cases identified by the new hire directory.
  • Pilot results indicated that the new hire directory crossmatch is somewhat more effective than the wage record crossmatch in detecting additional overpayment errors.
  • The wage record crossmatch would require the revision of BAM payment accuracy rates to reflect the results of the post-audit. Chapter VI of ET Handbook No. 395 requires that “a minimum of 98 percent of cases for the year must be completed within 120 days of the ending date of the Calendar Year.” Final BAM data could not be published until all of the wage record follow-up audits are completed, which could be several months after the 120-day close-out deadline for the original BAM investigations. In comparison, because the new hire directory crossmatches are concurrent with the rest of the BAM investigation, the BAM data publication schedule should not be adversely affected.
  • Implementation of a post-audit requirement would also likely have a negative impact on BAM case completion timeliness. As each quarter's cases are crossmatched with the most recent wage records, BAM investigators would have to follow-up on hits for several completed cases while they are conducting audits for current cases. This would likely delay completion of the on-going sample cases. The pilot states that conducted new hire directory crossmatches as part of their BAM investigations reported no change in their case completion timeliness.

In August 2004, Public Law 108-295, section 3, authorized state workforce security agencies to access the National Directory of New Hires (NDNH) “for purposes of administering an unemployment compensation program under Federal or State law”. During FY 2005, the Texas, Utah, and Virginia UI agencies participated in a pilot test which matched UI payments against the NDNH data. The results of this pilot indicate that because the NDNH includes data for out-of-state, Federal civilian, and military employment, and in-state hires by some multi-state employers, it is a more effective tool in identifying potentially disqualifying employment than the SDNH, which includes only intrastate employment data.

According to the regulation establishing a quality control program for UI, each state shall:

Perform the requirements of this section in accordance with instructions issued by the Department, pursuant to § 602.30(a) of this part, to ensure standardization of methods and procedures in a manner consistent with this part [20 CFR 602.21].

Further, each state shall:

Complete prompt and in-depth case investigations to determine the degree of accuracy and timeliness in the administration of the State UI law and Federal programs with respect to benefit determinations, benefit payments, and revenue collections; and conduct other measurements and studies necessary or appropriate for carrying out the purposes of this part [20 CFR 602.21].

In order to enhance the ability of BAM to detect erroneous UI benefit payments and to ensure that each state follows standard methods and procedures with respect to case investigations, ETA proposes to modify ET Handbook No. 395, Chapter VI (Investigative Procedures), to incorporate crossmatches with the NDNH into the BAM case investigation methodology:

Section 453(i) of the Social Security Act [42 U.S.C. 653(i)] directs the Secretary of Health and Human Services to maintain an automated database of the State Directory of New Hires records in the National Directory of New Hires (NDNH). Public Law 108-295, section 3, Start Printed Page 9166authorizes state workforce security agencies to access the NDNH “for purposes of administering an unemployment compensation program under Federal or State law”. BAM must utilize this resource as part of the audit of paid claims to detect and investigate claimant employment during the benefit year to determine its effect on the claimant's eligibility for UI.

This requirement will be effective with BAM batch 200801 (sampling week beginning December 30, 2007, and ending January 5, 2008). States may begin to use the NDNH crossmatch as part of their BAM paid claims investigations prior to the effective date. States not participating in the NDNH crossmatch prior to the effective date may crossmatch BAM paid claims sample cases with their SDNH. However, once the state begins to access the NDNH, they must utilize the NDNH as part of the BAM paid claims investigation instead of the SDNH. All BAM paid claims investigations must include the NDNH crossmatch by the effective date (BAM sampling batch 200801).

BAM auditors will conduct fact-finding for those BAM cases in which the claimant's SSN matches one or more records in the NDNH (or SDNH) to determine if there are any issues affecting the claimant's eligibility for UI benefits for the sampled week. Agencies will conduct fact-finding according to the procedures in ET Handbook No. 395.

Pending approval of this information collection request by the Office of Management and Budget, ETA will issue technical specifications for crossmatching BAM cases with the new hire directories. BAM program managers will be responsible for identifying the organizational unit within their state that administers their state's participation in the NDNH or manages their SDNH and for determining the procedures needed to link BAM data with the NDNH or SDNH data.

State agencies that currently use their state's wage records as part of the BAM investigation may continue to do so. However, the use of wage records as part of the BAM investigation is not required.

Type of Review: Revision of a currently approved collection.

Agency: Employment and Training Administration.

Title: Modification to Unemployment Insurance Benefit Accuracy Measurement Investigative Procedures.

OMB Number: 1205-0245.

Agency Form Number: BAM State Operations Handbook (ET Handbook No. 395, 4th ed.).

Recordkeeping: States are required to follow their state laws regarding public record retention in retaining records for this proposed data collection system.

Affected Public: State Workforce Agencies (Primary), individuals, businesses, and not-for-profit institutions.

Total Respondents: 188,984 (unchanged).

Estimated Total Burden Hours: 429,805 (+6,562 from current burden).

Total Burden Cost (capital/startup): $38,411 ($739 per agency, annualized over 3-year life cycle).

Total Burden Cost (operating/maintaining): $504,000 (unchanged).

Comments submitted in response to this comment request will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record.

Start Signature

Dated: February 6, 2006.

Cheryl Atkinson,

Administrator, Office of Workforce Security.

End Signature End Supplemental Information

[FR Doc. E6-2490 Filed 2-21-06; 8:45 am]