The Tax Performance System (TPS) is intended to assist state administrators in improving their Unemployment Insurance (UI) programs by providing objective information on the quality of existing revenue operations. TPS also serves to help the U.S. Department of Labor carry out its oversight, technical assistance, and policy development responsibilities.
The TPS program is a part of the Department's "UI Performs", a comprehensive performance system in which the states and Federal government work together as partners to strengthen the UI system. One of the primary goals of the system is to achieve continuous improvement of overall performance quality.
State TPS administrators use two methodologies in the program:
- Computed Measures – These measures, based on reported aggregate information, are indicators of timeliness and completeness with which UI tax transactions occur. States report a quarterly series of data elements, which the TPS data system uses to automatically calculate the computed measures. Data are provided to the TPS reviewers so that they may factor them as part of their assessment of each tax function.
- Program Reviews – Program Reviews consist of Systems Reviews, which examine tax systems for the existence of internal controls and Acceptance Samples, which examine small numbers of transactions to verify the effectiveness of the internal controls in producing accurate outputs.
ETA Handbook No. 407 - TPS
Information on Using State TPS Application/Software
Data Validation (DV) and Tax
The purpose of the Data Validation (DV) program is to verify the accuracy of the Unemployment Insurance Required Reports (UIRR) system data. This process includes reconstructing reported counts from an independent audit trail, known as the extract file, as well as investigating samples, which includes verifying data elements in state databases. States use the DV software provided by DOL to conduct the validation and submit results. By insuring states are reporting accurate counts and storing key data points correctly, the performance and workload of a state UI program can be trusted. The DV software also provides a mechanism to verify a state’s sampling methods and procedures, known as Module 4, and Wage Item information, known as Module 5.
Tax data validation highlights areas where a State agency can improve business relations and revenue/contribution operations with employers.
Tax DV consists of five populations that validate one report, the ETA 581. These populations are: Active Employers, Report Filing, Status Determinations, Accounts Receivable, and Field Audits. Tax uses minimum samples (two cases from each subpopulation) and a Sorts or distribution test for populations. The Sorts test checks whether the primary codes in the extract file correctly correspond with state values used to differentiate between Contributory or Reimbursing employers and their associated Employer Account Numbers (EAN). EANs often have specific prefixes, suffixes, or ranges that make them unique. Sorts must be conducted when states have multiple specific codes that could be assigned to a single generic code (i.e. C-Contributory, R-Reimbursing) and are most often used with Population 3, Status Determinations.
Because Status Determinations (Population 3) is due every year regardless of a passing or failing score in any previous year, states will likely perform its Sorts test annually. Population 3 includes successorship transactions, which is the number of business transfers to new and existing employers. The Labor Department requires states to report successor transactions because successor determinations have a major impact on state contribution operations. For example, they affect the assignment of proper experience-rated tax rates, collection activities on delinquent predecessor accounts, and the successor’s computation of taxable wages based on the predecessor’s taxable wages reported in the year of transfer. Having states report them separately from new determinations gives a more accurate measurement of how promptly states are adding new employers to their systems to begin receiving contribution and wage reports.
Another aspect of the tax program is Wage Item Validation (WIV), Module 5. Employers submit Wage Reports to the state quarterly through various means of transmission. Wage Reports list the wage record for each employee during a particular quarter. A wage record includes the employee’s name, SSN, and earnings during the specified time period. WIV consists of recounting random samples of wage records (150 cases) for each means of transmission (i.e. paper, Internet, CD, etc.) in order to make an inference about the accuracy of the 581 reported counts from the sample of wage records. Once a state passes WIV, the score is valid for three years.
For more information on the DV program, including handbooks, recordings of virtual training sessions, and other supplemental guidance, visit: https://oui.doleta.gov/dv/index.asp
