1

Operational RateOperational Rate

Understanding the BAMUnderstanding the BAM

22

OverviewOverview

SamplingSampling FormulaFormula Weighting Weighting Excluded OverpaymentsExcluded Overpayments Time PeriodTime Period

33

SamplingSampling

BAM data gathered weeklyBAM data gathered weekly Sampling programSampling program Sample size Sample size Results are estimatesResults are estimates

44

The FormulaThe Formula

)( / ) x)mN

(v)m

N(( ih

m

=1ih

hH

=1hih

m

=1ih

hH

=1h

hh

Nh = Total number of UI payments in the

population for batch h.

vih = Dollars overpaid for the ith case in batch h.

xih = Original amount paid/offset for the ith case in batch h.

mh = Number of completed sample cases for batch h.

H = Number of batches in the range.

55

The Formula…SimplifiedThe Formula…Simplified

Total Amount Overpaid

÷Total Amount Paid

=Rate Overpaid

66

Extra FactorsExtra Factors

WeightedWeighted Computed WeeklyComputed Weekly Summed YearlySummed Yearly

77

WeightingWeighting Based on sample casesBased on sample cases How much weight does each case carry?How much weight does each case carry?

Number of cases each week compared to Number of cases each week compared to the number of payments in the universethe number of payments in the universe

Avg score for men = 5

Avg score for women = 10

Is the average score 7.5?

What if there are 100 men in the population and only 50 women?

5*100 + 10*50 / 150 = 6.666

88

ExclusionsExclusions

Non-Recoverable OverpaymentsNon-Recoverable Overpayments Technically Proper OverpaymentsTechnically Proper Overpayments Base Period Wage ErrorsBase Period Wage Errors Work SearchWork Search ES RegistrationES Registration Other CausesOther Causes Why?Why?

• RecoverableRecoverable• Reasonably detectable Reasonably detectable

99

Time PeriodTime Period

Based on a sampleBased on a sample Need 12 months to get full pictureNeed 12 months to get full picture BAM is currentBAM is current BAM is a sample, therefore an BAM is a sample, therefore an

estimateestimate Operational Rate Operational Rate

• Overpayment rate * Dollars paid in the Overpayment rate * Dollars paid in the populationpopulation

• estimated amount of overpayments in estimated amount of overpayments in the population the population

1010

BPCBPC

Ties to BPC Ties to BPC • (Overpayment/Fraud Unit)(Overpayment/Fraud Unit)

BPC takes timeBPC takes time• 6 months to discover (wage detail), 6 months to discover (wage detail),

investigate and writeinvestigate and write

1111

Goals and StandardsGoals and Standards GPRA target is to establish 52.8% of the GPRA target is to establish 52.8% of the

overpayments that BAM estimates is out there overpayments that BAM estimates is out there (FY 2010)(FY 2010)

Lower limit 50%Lower limit 50%• CAP needed if below 50%CAP needed if below 50%

Upper Limit 95%Upper Limit 95%• BAM program accuracy suspectBAM program accuracy suspect• BPC reporting accuracy suspectBPC reporting accuracy suspect• CAP needed if over 95%CAP needed if over 95%

UIPL regarding target:UIPL regarding target:• http://wdr.doleta.gov/directives/attach/UIPL/UIPL28-09.pdfhttp://wdr.doleta.gov/directives/attach/UIPL/UIPL28-09.pdf

1212

Time linesTime lines BAM Operational rate datesBAM Operational rate dates

• Jan. 1, Year1 through Dec. 31, Year1Jan. 1, Year1 through Dec. 31, Year1 BPC DatesBPC Dates

• Jul 1, Year1 through Jun 30, Year2Jul 1, Year1 through Jun 30, Year2

WEB site to view your rate yearly (GPRA):WEB site to view your rate yearly (GPRA):• http://www.ows.doleta.gov/unemploy/gpra.asp

WEB site to view your 3 year rate (Core WEB site to view your 3 year rate (Core Measure)Measure)• http://workforcesecurity.doleta.gov/unemploy/3yr_overpay.asp

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Understanding the WebsiteUnderstanding the Website

Column 1 = yearly total of cm4Column 1 = yearly total of cm4 Column 2 = Computed Operational RateColumn 2 = Computed Operational Rate Column 3 = Column 1* Column 2 Column 3 = Column 1* Column 2

• $540,341,335 * .0347 = $18,749,844$540,341,335 * .0347 = $18,749,844• Not a perfect match due to roundingNot a perfect match due to rounding

Column 4 = yearly total of 227 OP dataColumn 4 = yearly total of 227 OP data Column 5 = Column 4 / Column 3Column 5 = Column 4 / Column 3

• $10,994,408 / $18,759,207 = .58608$10,994,408 / $18,759,207 = .58608

Col 5

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ReviewReview BAM uses a sampleBAM uses a sample Overpayments/Amount paidOverpayments/Amount paid Weighted to accurately represent the Weighted to accurately represent the

populationpopulation Need a complete year of dataNeed a complete year of data Rate includes only overpayments that are Rate includes only overpayments that are

recoverable and reasonably detectablerecoverable and reasonably detectable Compare rate to a full year, 6 months later Compare rate to a full year, 6 months later

for BPC activity for BPC activity