Post on 01-Apr-2015
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
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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
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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
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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
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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
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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
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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
Federal Oversight Cont.
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
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Federal Oversight Cont.
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
Federal Oversight Cont.
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
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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.
Federal Oversight Cont.
Federal Oversight Cont.
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
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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
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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
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5
67
89
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Several methodologies are used: Computed Measures Program Reviews
Systems Reviews Sampling
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
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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
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Quality Assess.
Design of TPS
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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
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Design of TPS
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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”.
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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
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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:
Systems Reviews Sampling
Welcome to TPS
Overview of TPS
Federal Oversight
Design of TPS
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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”.
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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?
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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?
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Design of TPS
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Overview of TPS
Welcome to TPS
Major Internal Controls:
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.
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Design of TPS
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Overview of TPS
Welcome to TPS
Major Internal Controls:
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.
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Design of TPS
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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.
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Overview of TPS
Welcome to TPS
Design of TPS Cont.Program Reviews: Sampling
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.
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Overview of TPS
Welcome to TPS
Design of TPS Cont.Program Reviews: Sampling
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.
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Design of TPS
Federal Oversight
Overview of TPS
Welcome to TPS
Design of TPS Cont.Program Reviews: Sampling
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.
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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.
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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
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Design of TPS
Federal Oversight
Overview of TPS
Welcome to TPS
Quality Assessment Cont.
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
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Overview of TPS
Welcome to TPS
Quality Assessment Cont.
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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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
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Report Data Cont.Computed Measures Path
Selecting the Computed Measures
options will lead you to
these screens.
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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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Design of TPS
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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
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Design of TPS
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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
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Design of TPS
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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
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Federal Oversight
Overview of TPS
Welcome to TPS
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Overview of TPS
Welcome to TPS