May 28, 2004

REGION 5 ETA WORKFORCE DEVELOPMENT LETTER NO. 006-04

TO:              STATE WORKFORCE AGENCY ADMINISTRATORS

FROM:         Byron Zuidema
                   BYRON ZUIDEMA
                   Regional Administrator

SUBJECT:    Unemployment Insurance Integrity Systems Funding

                   Opportunity

1.  Purpose.  To inform regional offices of the opportunity for State Workforce Agencies (SWAs) to submit Supplemental Budget Requests (SBRs) to fund the implementation and/or enhancement of systems for preventing, detecting, and reducing overpayments in the Unemployment Insurance (UI) program. 

2.  Reference.  ET Handbook No. 336.

3.  Background.  In fiscal year (FY) 2003, $10 million was awarded to SWAs to build interfaces with other government agencies for the purpose of verifying personal data and performing cross-matches to detect and prevent overpayment of UI benefits.  These funds were awarded to SWAs through the SBR process for projects including State Directories of New Hires (SDNH) crossmatches, crossmatches with State Departments of Motor Vehicles (DMV) for identity verifications, and Social Security Number (SSN) verifications through the Social Security Administration (SSA).  Funds were also provided for third-party security verifications for interfaces with the SSA to SWAs that were implementing SSN verifications.

4.  Funding for Crossmatches.  In FY 2004, funding up to $100,000 per individual SBR is available to SWAs for integrity crossmatches and other processes, including, but not limited to, SSA, DMV, and SDNH.  SWAs may submit multiple SBRs for different systems.

5.  Guidelines for the Preparation of SBRs.  ET Handbook No. 336 contains instructions for completing SBRs.  SWAs are encouraged to submit one or more proposals using the following guidelines:

       a. Description of the Crossmatch System.  The narrative must include the following information:

- Identify the data that will be received from the crossmatch, e.g., name, date of birth, address, etc.

- Estimate the amount of overpayments the match will prevent or detect in a year.

- Estimate the percentage of claimants that will be a part of the crossmatch system.

- Describe the data system that the SWA will utilize to crossmatch claimant records.

- Indicate how often the crossmatch will be run.

- Describe the assurance that the SWA has received that the owner(s) of the data is willing to participate in the proposed crossmatch.

- Identify the planned implementation date of the crossmatch system.

       b.  Hardware, Software, and Telecommunications Equipment.  The SBR must include detailed descriptions of the hardware, software, and/or telecommunications equipment purchases that are to be a part of the proposed project.  Descriptions must include the number of items and the cost per item.   A table similar to the following should be used to provide the required information.

The technical specifications of the hardware must also be provided.  Specification should include any of the following that are applicable:

- Processors (number, type, size, etc.);

- Memory (type, size, etc.);

- Storage (hard drive, controllers, back-up devices, etc.);

- Hardware peripherals (monitors, network connectivity, tape drives, external modem, etc);

- Operating system; and

- Warranty, field service, and/or system support specifications.

A detailed narrative description of the software should include the technical specifications of the version to be purchased.  These technical specifications should include the version type and the license type.

All available information should be included, and if any of the above narrative information cannot be provided, the narrative should explain why it is not included.  All estimated cost information is required.  Ongoing maintenance and telecommunications costs cannot be funded through these SBRs.

          c. Staff Needs.  The proposal should identify one-time SWA staff needs and/or contract staff needs.  Staff needs should include the type of position (e.g., program analyst), the expected number of staff hours, and the projected hourly costs.  All staff funded under this grant must be in excess of base staff and proposals must state this in writing.  SWAs should include information in a format similar to the following table.

If contract staff is requested, documentation must include the type of position, estimated contract staff hours, and the projected hourly costs for contract staff.

          d. Other.  The proposal should include and explain any one-time costs for other activities, not identified above, that will be obtained from vendors – such as telephone companies, Internet service providers, and telecommunications providers.

Forms SF-424 (.pdf) and SF-424A (.pdf) serve as the basis for the grant agreement between the U.S. Department of Labor and the SWA.  They must reflect the SWA’s best estimate of costs in each individual category.  Subsequent changes in actual expenditures will require a modification of the grant if the changes are in excess of 20 percent for any individual category.  For example, if a SWA proposes to spend $50,000 for hardware and later determines that only $30,000 will be needed for hardware, the grant agreement must be formally modified.  SWAs must ensure that each categorical expenditure on Form 424A reflects the best available estimate of costs, that these costs are documented in the narrative of the proposals, and that no Form 424 or Form 424A exceeds the maximum grant amount of $100,000.

Funds used for SSA data exchange security verification purposes that meet the definition of “automation acquisitions” may be obligated through September 30, 2006.  If the funds are used for non-automation overpayment related activities, they must be obligated by September 30, 2004.

6.  Action Required.  Administrators are requested to:

a. Provide the above information to all appropriate staff as soon as possible.
b. Submit all SBRs according to the above instructions.
c. Transmit two copies of each SBR to the Regional Office by June 18, 2004. The SBRs should be submitted to the attention of Patricia Hernandez.

7. Contact.  Questions about SBRs may be directed to Patricia Hernandez on 312.596.5438 or John Montague on 312.596.5444. Faxes may be directed to 312.596.5401.

8.  Effective Date. Immediate

9.  Expiration Date. July 30, 2004

10.  Attachments. None