Transcript Unemployment Insurance Administrative Funding Formulation to Allocation Target Allocation

Unemployment Insurance
Administrative Funding
Formulation to Allocation
Target Allocation
Process Overview
US Department of Labor
Employment and Training Administration
Division of Fiscal and Actuarial Services
Presentation Topics
• Funding Background
• Formulation for State Administration
• Resource Justification Model
• Allocation
UI Administrative Funding
• Title III Section 302(a) Social Security Act:
Secretary of Labor shall certify to the
Secretary of Treasury such amounts as
necessary for “proper and efficient
administration” of each State’s law.
Social Security Act Title III
(http://www.socialsecurity.gov/OP_Home/ssact/title03/0300.htm#ft1)
Budget Timeline for FY 200Z
Jan.
June
Initial
Workload
Projection
200X
July
Initial
Budget
Formulation
ETA
Request
to DOL
200Y
President’s
Budget
Request
Planning
Targets
Final Workload
Projections
Jan.
June
States Submit
SQSP
DOL Request
to OMB
Budget
Hearings
w/OMB
OMB
Passback
Nov.
Feb.
Aug.
Sept.
Oct.
Final Allocations
FY 200Z
Oct.
Budget Formulation
• Workload Driven.
• Workloads projected using statistical
methods & Administration’s economic
assumptions
• Key workload item: Continued Claims.
Budget Formulation
• Base and Above Base
• Projected Continued Claims divided by 52 is
designated the Average Weekly Insured
Unemployment (AWIU) trigger.
• Funding in President’s Request considered
adequate to process workloads up to the trigger.
• Funds automatically made available for AWIU
above the trigger at rate of $28.6 M per 100,000
AWIU & pro-rated (amounts developed in the
1990s).
Budget Formulation
• Congress obligated to use CBO’s economic
assumptions for scoring.
• CBO AWIU projections typically different due
primarily to different economic assumptions and
projecting methodology.
• Funding gap created when CBO’s AWIU
projection higher than Administration’s since
Congress typically accepts the dollars requested
or something lower.
Budget Formulation
Funding gap example:
• For FY 2008, dollars funded AWIU of
2.4M while trigger was set at 2.786M.
– Initial budget request included an AWIU
of 2.62M however a continuing
resolution held the AWIU at the FY 2007
level of 2.4M
Budget Formulation
•
Number of staff
computed using
fixed workload per
staff-year factors.
SY=(WL projected) / (WL/SY factor)
Budget Item
Base
Computation
Above-Base
Computation
Initial Claims
WL/SY
WL/SY
Weeks Claimed
WL/SY
WL/SY
Eligibility Review
WL/SY
WL/SY
Non-Mon
Determination
WL/SY
WL/SY
Appeals
WL/SY
WL/SY
Benefit Payment
Control
Previous Year
N/A
Wage Records
WL/SY
N/A
Subject Employer
WL/SY
N/A
Tax Field Audit
WL/SY
N/A
Interstate
Previous Year
N/A
Internal Security
Previous Year
N/A
UI PERFORMS
Previous Year
N/A
SAVE
WL/SY
N/A
Trade
N/A
WL/SY
Support
12% of above SYs
5% of above SYs
AS&T
9% of above Sys
including Support
2.5% of above Sys
including Support
Budget Formulation
• Staff costs = (SY) X Cost per SY
– Note: In FY2010, inflation included for 1st time
since 1995
• Other activities, e.g., non-personal
services (utilities, facilities, etc.),
overhead, support, & postage, are
established percentages of staff
costs.
• Key result: total dollars for state
administration.
Allocating Base Funds
• What are the primary drivers of the
base allocation?
• Where does the data that drives the
base allocations come from?
Budget Allocation
Projected
State level
Workload
Workload
Staff Year
Levels
+
Non Workload
Staff Year
Levels
Staff Year
Costs
+
NPS Costs
Total Available
for Allocation
Allocating Base Funds
Two key features of allocation:
• Based on cost of doing business and
appropriation.
• Goal: provide funding that allows roughly
equal level of service across all states and
recognize need for productivity incentives.
Allocating Base Funds
• Funding provided in two parts: Base
& Above Base
– Base – costs associated with
processing an AWIU of 2.3M
Initial Claims
16.75M
Weeks Claimed
119.6M
Non-monetary determinations 7.000M
Appeals
1.128 M
All subject employers (200X) 7.674M
All wage records (200X)
641.146M
Allocating Base Funds
• Base funding determined by applying
formulation methodology to base
workloads.
• Above-base – claims activity above
2.3M AWIU
Data Source for Allocation
• Resource Justification Model (RJM)
– RJM is a data collection instrument.
• States submit data from cost
accounting records
– Expenditures, Hours by functional activity,
personnel costs
• Data is subject to review & verification
RJM - Objectives
• Demonstrate true funding need.
• Use data to allow for fair and
equitable allocation of available
funds.
RJM Website
(http://www.ows.doleta.gov/rjm/)
RJM – Use of Data
• Actual cost data for most recent year
available are the starting point for
determining base allocations.
• Shows how much and on what
activities states spent money.
• Supplements to the federal grant not
considered in allocation formula.
Allocating Base Funds
Availability by activity
• Allocated base funds assigned to functional
activities according to proportions reflected in
RJM data collection.
–
–
–
–
–
–
Claims activities
Non-personal services
Tax/Wage Records
Support
AS&T
BPC/UIP
Allocating Base Funds
Primary drivers of base allocation levels:
• Each state’s share of national UI workloads
(claims, appeals, wage records, tax accounts)
Initial Claims
Weeks Claimed
Non-monetary determinations
Appeals
• Each state’s PS/PB rates (from RJM)
16.75M
119.6M
7.000M
1.128 M
Allocating Base Funds
Primary drivers of base allocation levels:
• Time allowed for processing each budgeted
workload item (MPUs, which are calculated
from RJM data)
– 3-year average
• Non-personal services spending (from RJM)
– 3-year average
FY 200Z Targets
Inflated FY0X Rates
(Derived from RJM Data)
Unreduced Total
Percent
Shortfall
Targets
Workload SY
1,395,198,145
56.9%
-161,884,626
1,233, 313,519
[Appeals
214,568,805
8.8%
-25,188,923
189,379,882]
Support SY
311,900,446
12.7%
-36,189,865
275,710,581
AS&T SY
214,325,600
8.7%
-24,857,601
189,467,999
NPS $
529,661,418
21.6%
-61,456,195
468,205,223
Sub. TOTAL
2,451,085,609
100.0%
-284,388,287
2,166,697,322
BPC/UIP SY
138,409,793
0.0%
0
138,409,793
2,589,495,402
100.0%
-284,388,287
2,305,107,115
TOTAL
Allocations
• Staff years =
• Cost =
Workload x MPU
Minutes Worked Per Year Per Staff
Staff Years x PS/PB rates
• MPU reduction algorithm
– MPU values are an average of the most recent
three years of actual data.
MPU Reduction Process - Appeals
AP SY
alpha
US
VI
VT
SD
PR
WI
ND
NY
CO
OH
WY
ME
UT
MT
PA
MA
WV
OR
AK
DC
AZ
MI
SC
HI
CA
RI
KS
MN
MS
NH
GA
WA
NV
ID
AL
NJ
MO
IA
DE
NE
TX
NC
CT
KY
NM
LA
AR
TN
VA
MD
IN
FL
IL
OK
2428.1
0.782784
wkld
1,128,000
87
1548
1195
5541
18775
1354
38786
15334
20397
1155
5597
6645
912
63820
22385
4405
17223
1984
2400
16689
27503
12732
2587
212151
4534
10567
15664
11706
3384
37780
23505
9319
3558
14699
37963
26758
12386
4327
4050
82092
37676
16498
18277
6941
18594
11702
17246
16041
25411
22750
68180
55232
9955
1 madj = (mpu_st – mpu_high10) * alpha
2 wadj = .75 + ( AP_st / (AP_highst*4))
2428.100
hours
worked
1687.34
1732.75
1799.13
1584.80
1756.93
1877.26
1608.65
1760.58
1754.44
1782.00
1711.46
1787.01
1761.91
1605.99
1649.46
1601.73
1745.34
1638.51
1698.46
1830.01
1710.68
1619.56
1658.52
1718.29
1491.16
1768.29
1725.80
1800.63
1597.62
1798.72
1762.77
1938.55
1750.46
1739.82
1448.53
1714.20
1764.77
1650.00
1748.83
1691.92
1785.35
1735.16
1669.21
1831.64
1775.19
1798.22
1666.96
1775.64
1668.45
1710.79
1848.48
1606.75
1737.70
Total
Maximum
MPU Workload
Unreduced
Reduction Ajustment
Total
MPU
SY
(madj)
(wadj) Reduction
2750.6
1
2
563.048
0.5
276.598
0.7501
207.476
489.310
7.3
218.877
0.7518
164.557
415.479
4.6
161.083
0.7514
121.039
405.275
23.6
153.095
0.7565
115.821
393.998
70.2
144.268
0.7721
111.393
393.581
4.7
143.941
0.7516
108.186
348.818
140.2
108.902
0.7957
86.654
347.378
50.4
107.774
0.7681
82.778
339.418
65.8
101.544
0.7740
78.598
335.239
3.6
98.272
0.7514
73.838
333.855
18.2
97.189
0.7566
73.533
331.386
20.5
95.256
0.7578
72.188
322.458
2.8
88.268
0.7511
66.295
305.911
202.6
75.315
0.8252
62.150
304.377
68.8
74.114
0.7764
57.541
288.646
13.2
61.800
0.7552
46.671
288.439
47.4
61.638
0.7703
47.479
282.217
5.7
56.767
0.7523
42.708
280.501
6.6
55.424
0.7528
41.725
274.072
41.7
50.392
0.7697
38.785
271.725
72.8
48.555
0.7824
37.990
265.860
34.8
43.963
0.7650
33.632
265.352
6.9
43.566
0.7530
32.807
260.648
536.4
39.884
1.0000
39.884
260.044
13.2
39.411
0.7553
29.769
258.654
25.8
38.323
0.7625
29.219
249.175
37.7
30.903
0.7685
23.747
247.150
26.8
29.318
0.7638
22.393
246.371
8.7
28.708
0.7540
21.645
244.581
85.6
27.307
0.7945
21.696
237.809
52.8
22.006
0.7777
17.114
236.419
18.9
20.918
0.7610
15.918
232.426
7.9
17.792
0.7542
13.419
231.401
32.6
16.990
0.7673
13.036
230.392
100.6
16.200
0.7947
12.874
230.315
59.9
16.139
0.7815
12.613
229.324
26.8
15.364
0.7646
11.747
228.702
10.0
14.877
0.7551
11.233
224.872
8.7
11.879
0.7548
8.966
223.233
180.5
10.596
0.8467
8.972
222.429
78.2
9.966
0.7944
7.917
220.771
35.0
8.669
0.7694
6.670
218.780
39.9
7.110
0.7715
5.486
209.697
13.2
0.000
0.7582
0.0000
209.639
36.6
0.000
0.7719
0.0000
209.123
22.7
0.000
0.7638
0.0000
204.711
35.3
0.000
0.7703
0.0000
201.938
30.4
0.000
0.7689
0.0000
197.857
50.2
0.000
0.7799
0.0000
187.792
41.6
0.000
0.7768
0.0000
185.903
114.3
0.000
0.8303
0.0000
161.826
92.7
0.000
0.8151
0.0000
151.903
14.5
0.000
0.7617
0.0000
Reduced
MPU
SY
2428.1
355.572
0.3
324.753
4.8
294.440
3.3
289.454
16.9
282.605
50.3
285.395
3.4
262.164
105.4
264.600
38.4
260.820
50.5
261.401
2.8
260.322
14.2
259.198
16.1
256.163
2.2
243.761
161.4
246.836
55.8
241.975
11.1
240.960
39.6
239.509
4.8
238.776
5.6
235.287
35.8
233.735
62.6
232.228
30.4
232.545
6.0
220.764
454.3
230.275
11.7
229.435
22.9
225.428
34.1
224.757
24.4
224.726
7.9
222.885
78.0
220.695
49.0
220.501
17.7
219.007
7.4
218.365
30.7
217.518
95.0
217.702
56.6
217.577
25.5
217.469
9.5
215.906
8.3
214.261
173.3
214.512
75.4
214.101
33.9
213.294
38.9
209.697
13.2
209.639
36.6
209.123
22.7
204.711
35.3
201.938
30.4
197.857
50.2
187.792
41.6
185.903
114.3
161.826
92.7
151.903
14.5
1,128,000
212,151
SY Cum
0.3
5.1
8.4
25.3
75.6
79.0
184.4
222.8
273.3
276.2
290.3
306.4
308.6
470.1
525.9
537.0
576.6
581.4
587.1
622.8
685.5
715.9
721.9
1176.2
1187.9
1210.7
1244.8
1269.2
1277.1
1355.1
1404.2
1421.9
1429.3
1460.0
1555.0
1611.7
1637.1
1646.6
1655.0
1828.2
1903.7
1937.6
1976.5
1989.8
2026.4
2049.1
2084.4
2114.8
2165.0
2206.6
2320.9
2413.6
2428.1
Allocations
• Support and AS&T percentages are
reduced by the same algorithm used
for MPU values.
• BPC, UIP staff years taken after
adjustment for state dollars.
Allocations
• Total Allocation
(Reduced SYs x Inflated PSPB rates) + Reduced NPS
• SYs for BPC & UIP are not reduced
• NPS is decreased across-the-board to equal
availability.
Allocations
• Stop-loss is -5% of total dollars
from previous year’s base
allocation.
• Stop-gain is not pre-determined.
– Has been as low as 4.56% and as
high as 7.71%
Bottom Line Authority
• States have authority to move
allocated resources among
activities.
• Cannot move resources in such a
way as to increase above base
payment.