Audit Division

Audit Summary

 

Department of Employment, Training and Rehabilitation

Employment Security Division

LA02-09

 

Results in Brief

 

††††††††† The Divisionís collection procedures are not effective in maximizing the collection of unemployment benefit overpayments.Several factors hinder the Divisionís collection process.First, the Division does not use all available collection techniques.Second, statutory restrictions limit the period of time available for collecting overpayments.As a result, the Divisionís collection rate is well below regional and national averages.State laws and regulations provide guidance for recovering monies owed the State.Following this guidance and implementing other collection tools could generate thousands of additional dollars for Nevadaís Unemployment Insurance (UI) program.

 

††††††††† Although the underlying data examined in the General Unemployment Insurance Development Effort (GUIDE) overpayment database was accurate, system processing problems impact collection reports. These processing problems have resulted in collection reports generated by the database for internal and federal government purposes being unreliable.Additionally, overpayment information contained in the database system can be changed with little oversight.Because of database problems, a process was implemented to identify system issues and take corrective action.However, this process could be improved to better ensure the resolution of the system problems.

 

Principal Findings

 

       The BPC Unit is not using many of the collection methods set forth in state law or those used by other entities.As a result, Nevadaís collection rate ranked in the bottom quarter when compared to other western states and nationally for the 9 months ended September 30, 2000.Nevadaís collection rate was about 45%; however, the regional and national averages exceeded 65%.We estimate the BPC Unit could have recovered an additional $800,000 for the UI program in 2000 by attaining collection rates similar to the regional and national averages. (page 7)

 

       Current statutory requirements limit BPCís ability to recover benefit overpayments after 3 years has elapsed.Our testing found that claimants often continue to pay their obligation beyond 3 years.Fifteen of 23 overpayment records we tested had some collection activity after the 3-year statutory restriction.About $19,000 was received after 3 years had elapsed in the 15 records examined. (page 10)

 

       The GUIDE system has the ability to produce a variety of management reports.However, some reports are unreliable.BPCís June 30, 2000, accounts receivable report showed a total over-payment balance of approximately $6.9 million while the federal overpayment activity report showed a balance amounting to over $15 million. (page 12)

 

       Overpayment information can be modified after a claim is entered into the GUIDE system.Although activity reports have been developed to control changes to overpayment records, these reports are not always reviewed by management. (page 13)

 

       The Software Error/Enhancement Report process is used to track the programming needs of the Division.However, our audit found this process needs improvement to ensure all necessary changes are logged into the database, system changes are assigned based on their priority level, and appropriate changes are completed timely. (page 14)




Department of Employment, Training and Rehabilitation

Employment Security Division

 

Agency Response

to Audit Recommendations

 

 

Recommendation

        Number        †††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Accepted††††††† Rejected

 

††††††††††† 1†††††††††††††† Review available collection practices and implement ††††††††††††

†††††††††††††††††††††††††††† those that will help maximize recoveries to the State.††††††††††††         X     ††††††              

 

††††††††††† 2†††††††††††††† Request legislation to amend NRS 612.365 to allow for

††††††††††††††††††††††††††† collections beyond 3 years from the date the overpay-

†††††††††††††††††††††††††††† ment account was established.†††††††††††††††††††††††††††††††††††††††††††         X     ††††††              

 

††††††††††† 3†††††††††††††† Periodically review the accounts receivable aging report

†††††††††††††††††††††††††††† and the federal overpayment activity report to ensure

†††††††††††††††††††††††††††† their completeness and validity.††††††††††††††††††††††††††††††††††††††††††         X     ††††††              

 

††††††††††† 4†††††††††††††† Develop procedures for the routine review of the activity

†††††††††††††††††††††††††††† reports detailing changes to overpayment accounts.††††††††††††         X     ††††††              

 

††††††††††† 5†††††††††††††† Ensure that all system processing issues are tracked,

†††††††††††††††††††††††††††† work requests are prioritized and assigned, and time-

†††††††††††††††††††††††††††† tables for corrective action are developed for each work

†††††††††††††††††††††††††††† request.††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††         X     ††††††              

 

 

†††††††††††††††††††††††††††† †††† TOTALS††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††         5     †††††††        0