Presentation on theme: "U.S. Dept. of Labor’s Tax Performance System"— Presentation transcript:
1 U.S. Dept. of Labor’s Tax Performance System TPS Reviewer Training
2 Let’s begin with an Overview Welcome to TPSWelcometo TPSOverviewof TPSScope of Training:Overview of TPSFederal OversightFederal Oversight ProgramsDesign of TPSComputed MeasuresSystems Review of State’s Internal ControlsSampling of Tax’s OutputsAssessing QualityReporting DataEnd - linksFederal OversightDesign of TPSQuality Assess.Report DataEndLet’s begin with an Overview
3 OverviewWelcometo TPSOverviewof TPSFederal OversightTPS 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.Design of TPSQuality Assess.Reports DataEndHow does this work?
4 Overview Cont.Welcometo TPSOverview of TPSFederal OversightYou 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 controlsSamples of each tax function’s outputs to check for accuracyReport this data into web-based system once each year “SUN System”.Work with State and Regional partners to improve tax operation.Design of TPSQuality Assess.Report DataEnd
5 Overview Cont. What is the Federal role? Welcome to TPSOverview of TPSFederal OversightWhat is the Federal role?Monitor States’ UI tax systemsIf 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 actionsare taken.Design of TPSQuality Assess.Report DataEnd“Inspect what you expect”
6 Overview Cont. Ensure TPS is in place and operating as intended Welcome to TPSOverview of TPSFederal OversightEnsure TPS is in place and operating as intendedOnce 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.Design of TPSQuality Assess.Report DataEnd
7 Overview Cont.Welcome to TPSOverview of TPSFederal OversightDesign of TPSReport to Congress via Government Performance and Results Act (GPRA)Long term, five year plansFor 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.Quality Assess.Report DataEndNow, for more details on Federal oversight.
8 Federal OversightWelcome to TPSOverview of TPSFederal OversightDesign of TPSThe US DOL’s oversight system for UI tax, UI benefits and the validation of UI data is called “UI Performs”.Quality Assess.Report DataEndTPSBAMBTQDV
9 Federal Oversight Cont. Welcome to TPSOverview of TPSFederal OversightSeveral 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.Design of TPSQuality Assess.Report DataEnd
10 Federal Oversight Cont. Welcome to TPSOverview of TPSFederal OversightThe 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.Design of TPSQuality Assess.Report DataEnd
11 Federal Oversight Cont. Welcome to TPSOverview of TPSUI Tax Core MeasuresTimeliness70% or more new employer status determinations must be made timely.QualityLess than four out of the thirteen tax functions sampled can fail.Quality Over TimeNo tax function can continue to fail for three successive years.Federal OversightDesign of TPSQuality Assess.Report DataEndFailPass
12 Federal Oversight Cont. Welcome to TPSOverview of TPSFederal OversightCore Measures of UI TaxDesign of TPSQuality Assess.Tax TimelinessTax QualityComputed Measure Passes?At least 70% of determinations made within 90 daysSamples Pass?Three or less fail out of 13 samplesSamples PassOver Time?A sample can not fail 3 successive yearsReport DataEnd
13 Federal Oversight Cont. 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.
14 Federal Oversight Cont. Welcome to TPSFederal Oversight Cont.Overview of TPSFederal OversightThe flow of TPS data:TPS ReviewerDesign of TPSState AdministratorQuality Assess.Report DataFederal OversightRegionalOfficeNational OfficeEndCongressNext, more detail on the design of TPS.
15 Let’s look at this step by step. Welcome to TPSDesign of TPSOverview of TPSFederal OversightTo measure tax performance, TPS examines the States’ major tax functions.Two different methodologies used:Computed MeasuresProgram ReviewsSystems ReviewsSamplingAt the end of each year, TPS findings and any recommendations are submitted.Design of TPSQuality Assess,Report DataEndLet’s look at this step by step.
16 TAX FUNCTIONS EXAMINED Design of TPS Cont.Welcome to TPSOverview of TPSFederal OversightTAX FUNCTIONS EXAMINEDSTATUS DETERMINATIONNew DeterminationsSuccessor DeterminationsInactivation's/ TerminationsCASHIERINGREPORT DELINQUENCYCOLLECTIONSFIELD AUDITACCOUNT MAINTENANCEReport ProcessingDebits/Bills contributoryDebits/Bills reimbursingCredits/RefundsBenefit ChargingExperience RatingDesign of TPSEvery 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.1Quality Assess.234Report Data5End678910111213
17 Design of TPS Cont. Several methodologies are used: Computed Measures Welcome to TPSDesign of TPS Cont.Overview of TPSFederal OversightSeveral methodologies are used:Computed MeasuresProgram ReviewsSystems ReviewsSamplingDesign of TPSQuality Assess.Report DataEndNext, we will discuss Computed Measures.
18 Design of TPS Cont. Computed Measures Component Welcome to TPSOverview of TPSFederal OversightTAX FUNCTIONSEXAMINEDSTATUSDETERMINATION-New determinations within 90 days-New determinations within 180 days-Successor determinations within 90 days-Successor determinations within 180 daysCASHIERING-N/AREPORTDELINQUENCY-Timely reports- Reports secured within 90 days-Reports sec. or resolved within 180 daysCOLLECTIONS-Timely payments-Uncollectible-Accounts receivableFIELD AUDIT-Change in total wages-Contributory employers audited- Total wages audited (annualized)ACCOUNTMAINTENANCEDesign of TPSCOMPUTED MEASURESQuality Assess.Report DataEnd
19 Design of TPS Cont. Computed Measures Welcome to TPSOverview of TPSFederal OversightComputed MeasuresWe 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 theUI Performs umbrella, ensuresFederal definitions are used.Design of TPSQuality Assess.Report DataEnd
20 Design of TPS Cont. Computed Measures Welcome to TPSOverview of TPSFederal OversightComputed MeasuresTPS reviewers have access to automated, “Computed Measures” data via the following link:Note that the SUN system also provides State-specific data. This will be discussed during “Reporting Data”.Design of TPSQuality Assess.Report DataEnd
21 Design of TPS Cont.Welcome to TPSOverview of TPSFederal OversightComputed MeasuresAt 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.Also, see examples of Computed Measures in Annual Reports in the Links page at the end of this tutorial.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 TPSQuality Assess.Report DataEnd
22 Design of TPS Cont. Program Reviews Welcome to TPSOverview of TPSFederal OversightTAX FUNCTIONSEXAMINEDSystems ReviewsExamination of Internal controls which ensure:SamplesTo confirm that internal controls are working - examination of:STATUSDETERMINATION-Accuracy of new determinations-Accuracy of successor determins-Accuracy of inactive determinations-New determinations-Successor determinations-Inactive determinationsCASHIERINGTimeliness of remittance processingEmployer remittancesREPORT DELINQUENCYAccurate id of delinquent employersTake actions to secure/resolve rpt delAccounts w/ delinquent reportsCOLLECTIONS-Take actions to manage acts recv-Accounts receivableFIELD AUDIT-Ensure audits meet requirements-Completed auditsACCOUNT 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 ratingsProgram ReviewDesign of TPSQuality Assess.Report DataEnd
23 Design of TPS Cont. Program Reviews Welcome to TPSDesign of TPS Cont. Program ReviewsOverview of TPSFederal OversightDesign of TPSProgram Reviews provide context –a look at the UI tax system as a wholeProgram Reviews consist of:Systems ReviewsSamplingQuality Assess.Report DataEnd
24 Design of TPS Cont. Program Reviews: Systems Reviews Welcome to TPSOverview of TPSFederal OversightSystems 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 activitiesFor 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”.Design of TPSQuality Assess.Report DataEnd
25 Design of TPS Cont. Program Reviews: Systems Reviews Welcome to TPSOverview of TPSFederal OversightMajor Internal Controls:Design of TPSHandbooksFor instance, does the status function have adequate and up-to-date handbooks and recorded instructions for staff to do its job?TrainingDoes the collections unit provide training on the collections tools available to them?Quality Assess.Report DataEnd
26 Design of TPS Cont. Program Reviews: Systems Reviews Welcome to TPSOverview of TPSFederal OversightMajor Internal Controls:Design of TPSSupervisory ReviewIs the completed work of the Refunds/Credit staff subject toreview by supervisors or othersfrom time to time?Audit TrailAre field auditors required to examine employer source documents when examining payroll records and do the auditors provide documentation that this has been done?Quality Assess.Report DataEnd
27 Design of TPS Cont. Program Reviews: Systems Reviews Welcome to TPSOverview of TPSFederal OversightMajor Internal Controls:Authorized IndividualsDoes the State’s cashiering operation only allow certain individuals access to employer remittances?Checks & BalancesDoes the report delinquency unit have tracking systems to follow up when employers promise to submitdelinquent reports?Design of TPSQuality Assess.Report DataEndAfter a review of each tax function controls,small samples are examined.
28 Design of TPS Cont. Program Reviews: Sampling Welcome to TPSOverview of TPSFederal OversightSmall Samples reviewed 1 x year, to ensure internal controls are working as intended.Reviews examine the work each taxunit 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.Design of TPSQuality Assess.Report DataEnd
29 Design of TPS Cont. Program Reviews: Sampling Welcome to TPSOverview of TPSFederal OversightDesign of TPSEach 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 findingsA second sample can be extracted.If an actual error rate is needed– see Handbook 407 on Expanded Sample.Quality Assess.Report DataEnd
30 Design of TPS Cont. Program Reviews: Sampling Welcome to TPSOverview of TPSFederal OversightA Quick Run Through:Status DeterminationsAll new, successor and inactivation determinations that have been made during the CY.Examine 60 each for accuracy.CashieringEmployer checks sent for the 2nd q of CY.Sample 500 checks for timeliness of deposit.Report DelinquencyEmployers whose 1st q reports are delinquent.Examine 60 a few months later for actions taken.Design of TPSQuality Assess.Report DataEnd
31 Design of TPS Cont. Program Reviews: Sampling Welcome to TPSOverview of TPSFederal OversightA Quick Run Through Cont. :CollectionsA one-day snapshot of active receivables.Review 60 a few months later for collections actions taken.Field AuditsAll audits completed 1, 2 and 3rd q of CY.Review 60 for adherence to auditing requirements.Account MaintenanceContribution ReportsA one day snapshot of active employers for the 1st q.Review 60 at the end of the quarter for accuracy in processing.Design of TPSQuality Assess.Report DataEnd
32 Design of TPS Cont. Program Reviews: Sampling Welcome to TPSOverview of TPSFederal OversightA Quick Run Through Cont. :Debits/BillsSelect 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/RefundsSelect one quarter and identify employers who are owed money.Look at 60 - were the credits or refunds established properly?Benefit ChargesIdentify all employers who have been charged for UI benefits.Review 60 charges to ensure accuracy.Experience RatingsIdentify employers who are to receive experience rate notices.Examine 60 employer accounts to confirm accuracy of rates.Design of TPSQuality Assess.Report DataEnd
33 Quality AssessmentWelcome to TPSOverview of TPSFederal OversightDesign of TPSEach 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.Quality Assess.Report DataEnd
34 Quality Assessment Cont. Welcome to TPSOverview of TPSFederal OversightProgram ReviewsPossible OutcomesDesign of TPSSystems ReviewsSamplesConsistency?No Risk FoundSample PassesConsistencySample FailsInconsistencyRisk FoundQuality Assess.Report DataEnd
35 Quality Assessment Cont. Welcome to TPSOverview of TPSWhen CY has ended, you produce an Annual Report by end of MayReport identifies strengths and weaknessesSR 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 improvementGoes to State administratorState and RO discuss problems andplans for improvementFederal OversightDesign of TPSQuality Assess.Report DataEnd
36 Quality Assessment Cont. Welcome to TPSOverview of TPSFederal OversightYou have spent months and monthsevaluating State’s tax operations.As you come to conclusions, keep thetax units appraised – no surprises atend of year.National Office needs TPS dataData entry into SUN by March 31 of each yearCY 1 enter data by March 31 of CY 2.Here is what the TPS Web Application Menu looks likeDesign of TPSQuality Assess.Report DataEnd
37 Report Data TPS Web Applications Menu Welcome to TPSReport Data TPS Web Applications MenuOverview of TPSFederal OversightDesign of TPSQuality Assess.Report DataEndPlace-holderSelecting the “Computed Measures” option will lead to these screens….
38 Report Data Cont. Computed Measures Path Welcome to TPSReport Data Cont. Computed Measures PathOverview of TPSFederal OversightDesign of TPSThe states’ scores will be displayed.Quality Assess.Report DataSelecting the Computed Measures options will lead you to these screens.EndOr the actual data the state has entered will be displayed.Select the Report Type and Year.Then, Select either:Measures,Database DisplayFormulas.Or the formulas will be displayed.…
39 Report Data Cont. Sampling Path Welcome to TPSOverview of TPSFederal OversightDesign of TPSQuality Assess.Report DataEndSelect the Sampling option and it will lead you to these screens.Select a year and then enter your sampling data.
40 Report Data Cont. Systems Review Path Welcome to TPSReport Data Cont. Systems Review PathOverview of TPSFederal OversightDesign of TPSQuality Assess.Report DataEndSelect the Systems Review option and it will lead you to this menu.Select a year and enter your sampling data.
41 Report Data Cont. ET 581Contribution Report Path Welcome to TPSOverview of TPSFederal OversightDesign of TPSQuality Assess.Report DataEndSelect a Year and Quarter and you will see the states’ 581 Report.Select the 581 option and it will lead to this screen.
42 End This concludes the TPS training presentation Welcome to TPSOverview of TPSFederal OversightThis concludes the TPS training presentationA list of links followsDesign of TPSQuality Assess.Report DataEndFor further assistance , don’t hesitate to use the Contact List link to call your Regional and National Office colleagues!
43 Links TPS Universe and Sampling Details Welcome to TPSLinksOverview of TPSFederal OversightTPS Universe and Sampling DetailsTPS Small Universes and Sample SizesTPS Guide to Writing an Annual ReportTPS and Tax Contacts ListDesign of TPSQuality Assess.Report DataEnd