More on the UI audit

One of the recommendations from the audit report is that the annual reports to the Advisory Council about recouped over-payments identify the year at issue for the over-payment (see p.35).

In his letter attached to the report, Secretary Newson notes:

  • The overpayment recoupment rate on which the LAB focuses its recommendation is consistent with the federal overpayment recovery measures and is defined as the amount of improper overpayments recovered divided by the amount of improper overpayments identified within the same year, expressed as a percentage. The U.S. Department of Labor (USDOL) includes this measure in its annual Improper Payment Recapture Activities report.
  • Providing a more specific breakdown per LAB’s recommendation will give broader context for this measure in Wisconsin. We would offer that this breakdown be provided along with the current overpayment recoupment rate so that we remain consistent with the federally defined measure as included in the USDOL’s report.

Newson is right to make these observations. The most recent federal UNEMPLOYMENT INSURANCE PROGRAM LETTER No. 09-13 to address these issues states (see p.9):

One state felt that this measure, as proposed, did not take into account differences in state law that could make reaching the targets easier for some states. Also, the commenter stated, TOP [Treasury/income tax offsets] recoveries may not meet expectations, which are based on preliminary estimates; UI overpayments would have to “stand in line” with other claimant obligations such as child support and student loan debt. According to this commenter, targets may also be unrealistic due to changing economic conditions. Because an overpayment may be recovered some time after it is initially established, and economic conditions may differ at those two stages, as the economy improves and benefit levels fall, there will be fewer benefits against which to offset overpayments and, consequently, states will have a harder time meeting these targets.

Another state did not agree with the methodology, arguing that matching overpayment amounts with overpayments established all from the same CY was not a valid indicator of recovery rate because recovery of overpayments, when it occurs, is often years after the original overpayments are established. This commenter recommended, instead, comparing data for the most recent five-year period.

Department staffers some time ago told me that these concerns were their own. In other words, any kind of annual tracking of over-payment recovery efforts is problematic at best and of limited usefulness in practical terms. Hence, the annual percentage specified in this program letter provides the best overall rate of effectiveness.

And, speaking of effectiveness, Wisconsin was number one in this program letter for over-payment recovery, with a 91.34% recovery rate — almost double the national average (see p.B-2). So, any complaints about Wisconsin needing to improve on this front are dubious to say the least.

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