1. June 23, 2011

2. Strategies to address areas of national focus:  Benefit Year Earnings (BYE) Root Causes Identified 1. Fraud 2. Failure to report and/or misrepresent earnings 3. Failure to report special payments (vacation, severance, etc.)  Planned actions to address issues 1. Integrity initiative to identify potentially fraudulent claims 2. Public Service Announcements (PSA) and claimant education as well as congratulatory notice to claimants of new job/back-to-work 3. Informational insert included with monetary determination  Principal milestones 1. Integrity Pilot launched in April 2011 2. Educational PSAs scheduled for rollout (4th quarter 2011) 3. Obtain Supplemental Budget Request (SBR) needed for employer online initiative 2

3. Strategies to address areas of national focus:  Separations Issues Root Causes Identified 1. Claimant Side – Fraudulent Activity 2. Employer Side – Failure to respond to employee separation in a timely manner 3. UI Side – Backlog of adjudication and fraud investigations  Planned actions to address issues 1. Move fraud warning to the claim filing and certification process 2. Online initiative advising employer of potential tax consequence for untimely reporting 3. Staff training and skill building  Principle milestones 1. Plan aggressive PSAs and web based videos on consequences of fraudulent activity - 3rd Quarter 2011 2. SBR needed to develop online initiative for employers when available 3. Meet ALPs for nonmonetary time lapse for Seps and Non-Sep issues during 2nd Quarter of 2012 3

4. 4 Strategies to address areas of state-specific focus:  Base Period Wages Issues - Identified Root Causes 1. Claimant statement of wages when employers fail to report 2. Reporting special payments as wages (severance, sick pay, etc.) 3. Wage forms not clear and readily accessible in FileNet  Planned actions to address issues 1. Develop online system requiring employers to self enter wages 2. Prevent wage information from being entered in a quarter after last day of work (LDW) 3. Review wage forms for clarity and review FileNet process  Principal milestones 1. Integrity Pilot launched in April 2011 2. Supplemental Budget Request desired 3. Identify key staff needed for review process by September 2011

5. Strategies to Support the Entire State UI System Owning UI Integrity:  Encourage every staff member to understand how their jobs connect to UI integrity  Managers hold monthly unit discussions to increase awareness and encourage staff  Develop processes that encourage staff to recommend solutions to address UI improper payments  Inform staff of employers’ advantage in using online services  Retrain UI staff on proper procedures and identifying possible fraud  Review and revise Desk Guide and on-line tools on the intranet by the 2nd Quarter 2012  Maintain management oversight in every functional area of the UI program that includes integrity reviews for accuracy and potential problems related to improper payments, etc.  Identify specific areas and report on a monthly basis  Maintain integrity activities during periods of high claims load 5

6. Communications Strategies:  To claimants and employers  Educate the public and employers via internet 4th Quarter 2011  To state UI staff  Revise for clarity UI forms and certification script 4th Quarter 2011  UI staff updated on integrity initiatives & EWAM 3rd Quarter 2011  Regularly scheduled touch point sessions 3rd Quarter 2011  To state leaders  UIA will touch point with the legislature and OAG regarding overpayments, fraud and integrity initiatives  With the public  Create Public Service Announcements & Hold Messages  Employer Web Account Manager (EWAM) online announcements  Rolling video announcements in Problem Resolution Offices (PRO) 6

7.  Michigan has identified Benefit Year Earnings, Misreported Separation Reasons and Base Period Wage issues as the largest contributors to overpayments.  This task was also a great opportunity for the state to take a good look at internal processes and make them more efficient and user friendly. We will continue to identify ways to operate more effectively while meeting our customers’ needs.  Questions?  State Contact for follow-up: Shaun Thomas: ThomasS10@michigan.govThomasS10@michigan.gov Phone: 313/456-2407 7