Narrative: a. 4.

4. CORRECTIVE ACTION PLANS (CAPS) Corrective Action Plans (CAPs): CAPs are expected as a part of the SQSP when State’s annual performance does not meet the established criteria for core measures, Secretary’s Standards, UI program, assurances, and other program deficiencies identified in the annual SQSP guidance provided by the Department. The CAP must list both specific milestones for key corrective actions or improvement activities, and the completion date for each milestone. First Payment Promptness

Performance Measures ALP CAP Based on SQSP 2019 Perf Level CAP Based on SQSP 2020 Perf Level State's Target Performance 12/31/2018 Quarter 1 3/31/2019 Quarter 2 6/30/2019 Quarter 3 9/30/2019 Quarter 4 85.0% First Payment Promptness: % of all 1st payments within 14/21 days after the compensable week. = 87% 66.17% 85.50% Target 70.0% 75.0% 80.0% First Payment Promptness, 14/21 days Intrastate UI full weeks = 87% 65.67% 85.49% Target 70.0% 75.0% 80.0% 85.0%

First Payment Promptness, 14/21 days Interstate UI full weeks = 70% 68.04% 81.21% Target 70.0% 72.0% 74.0% 76.0% Corrective Action Plan Summary: A. The Reason for the deficiency. During the core measure period of 4/1/2017 to 3/31/2018, Kentucky First Payment Promptness of 66.17% was below the Acceptable Level of Performance (ALP) of 87%. The intrastate First Payment Promptness of 65.67% was below the ALP of 87% and the interstate First Payment Promptness of 68.04% was below the ALP of 70%. During the majority of this review period, Kentucky had an employer protest period of fifteen days which had an adverse impact on First Payment Promptness. Kentucky reduced the employer protest period from fifteen days to ten days if the employer submits the protest by paper or twelve days if filed electronically. This change was made effective December 1, 2017, by regulation 787 KAR 1:070, and should have a positive impact on First Payment Promptness. B. Provide a description of your "Plan-Do-Check-Act" corrective action plan which will be undertaken to achieve the acceptable level of performance. Examples of major actions and activities; aka, Milestones, include IT requirements, business process analysis, training, implementing process improvements, measuring effectiveness, etc. Please include a description of these actions/activities in each stage of your "Plan-Do-Check-Act" corrective action plan. Kentucky continues to monitor and enforce the regulatory requirements of 787 KAR 1:070 to ensure employer protests are received timely. This will reduce the time it takes to complete an investigation, resolve issues, and make first payments. Kentucky is reviewing all correspondence and questionnaires shared with our customers for readability, understandability, and efficacy. Revisions are ongoing to ensure all communications are targeted and written with Kentucky’s Unemployment Insurance customers/audience in mind. Moreover, all interactive questionnaires are being revised to ensure that the questions posed are concise and tailored to efficiently glean all pertinent information necessary to make a well-reasoned determination in a timely manner, meet Federal timeliness and quality standards, and make prompt first payments. Kentucky has developed an internal tool (interactive elements manual) that is a spreadsheet based questionnaire utilizing decision tree technology. This tool will be available to all adjudicators. The interactive elements manual will assist the adjudicator in performing an effective investigation by following the most efficient questioning convention and will also internally track the efficacy of the interview vis-à-vis Benefits Timeliness and Quality criteria. Kentucky is currently utilizing the Equifax Portal to retrieve relevant and material information, decrease the time it takes to complete an investigation, and improve First Payment timeliness. Kentucky has conducted User Acceptance Training (UAT) on Liquid Office, a web-based solution for creating, routing and managing electronic forms. The interactive nature of this software will reduce the time it takes to request and receive critical information and documentation from claimants and make first payments. Kentucky is automating the issue assignment process with an internal Seibel based program (Assignment Manager). This will optimize the issue assignment process, emancipate resources, and improve Non-Monetary timeliness. Assignment manager is in the development stage and will proceed as resources permit. This will reduce the time necessary to make accurate and timely first payments. Kentucky is leveraging technology to address training needs. Specifically, Kentucky’s interactive training modules initiative. These modules are designed to address specific issues, processes, and procedures in an interactive format including tests designed to gauge information retention, understanding and practical applications. The initiative is a comprehensive and holistic approach to disseminating critical program information. Kentucky currently has six training modules vetted and ready for distribution. These modules will increase the adjudicators’ skillsets and issue awareness and thereby decrease the time it takes to identify and resolve issues and make accurate and timely first payments. C. If a plan was in place the previous year, an explanation of why the actions contained in that plan were not successful in improving performance; and, an explanation of why the actions now specified will be more successful. The plan in place for 2018 did indeed produce positive results resulting in slightly higher performance results in 2018. This is reflective of the change in regulation 787 KAR 1:070, in December 2017, to reduce the employer protest period. However, the change in the regulation was late in the assessment period and the full effects and residual benefits of said change were not fully realized in the 2018 review period. Kentucky will continue to benefit from the residual effects of the reduction in the employer protest period as well as improved training techniques. D. A brief description of plans for monitoring and assessing accomplishment of planned actions and for controlling quality after achieving performance goals. Kentucky continues to monitor and assess the efficacy of the efforts to improve First Payment Promptness. The monitoring is performed on a weekly, monthly, and quarterly basis through internal reports. Milestones 1. Improve adjudicator efficiency through intensive training techniques including static interactive training modules and testing. Completion Date: Multi-year 2. Leverage technology to decrease the time it takes to assign an issue and complete the investigation. Automate the assignment of issues through a Seibel based program (Assignment Manager). Completion Date: Multi-year 3. Leverage technology to decrease the time it takes to request and receive critical information from claimant. Implement Liquid Office, a web-based solution for creating, routing and managing electronic forms to enhance communications with the claimants. Completion Date: 03/31/2019 4. Leverage technology to improve the timeliness and quality of investigations through the implementation of an internal tool (interactive elements manual) that is a spreadsheet based questionnaire utilizing decision tree technology. Completion Date: 12/31/2018

5. Utilize existing third party administrator technology, Equifax Portal, to expedite critical information requests and responses from employers and their third party administrators/agents. Completion Date: 12/31/2018 Nonmonetary Determination Timeliness

Performance Measure ALP CAP Based on SQSP 2019 Performance CAP Based on SQSP 2019 Performance State's Target Performance 12/31/2018 Quarter 1 3/31/2019 Quarter 2 6/30/2019 Quarter 3 9/30/2019 Quarter 4 85.0% Nonmonetary Determination Timeliness = 80% 59.09% 77.23% Target 70.0% 75.0% 80.0% Corrective Action Plan Summary: A. The Reason for the deficiency. During the core measure period of 4/1/2017 to 3/31/2018, Kentucky Non-Monetary Timeliness was 79.9%. This is .01% below the Acceptable Level of Performance (ALP) of 80%. During the majority of this review period, Kentucky had an employer protest period of fifteen days which had an adverse impact on Non-monetary Timeliness. Kentucky reduced the employer protest period from fifteen days to ten days if the employer submits the protest by paper or twelve days if filed electronically. This change was made effective December 1, 2017, by regulation 787 KAR 1:070, and will have a positive impact on Non-monetary Timeliness. B. Provide a description of your "Plan-Do-Check-Act" corrective action plan which will be undertaken to achieve the acceptable level of performance. Examples of major actions and activities; aka, Milestones, include IT requirements, business process analysis, training, implementing process improvements, measuring effectiveness, etc. Please include a description of these actions/activities in each stage of your "Plan-Do-Check-Act" corrective action plan. Kentucky continues to monitor and enforce the regulatory requirements of 787 KAR 1:070 to ensure employer protests are received timely. This will reduce the time it takes to complete an investigation and resolve issues. Kentucky is reviewing all correspondence and questionnaires shared with our customers for readability, understandability, and efficacy. Revisions are ongoing to ensure all communications are targeted and written with Kentucky’s Unemployment Insurance customers/audience in mind.

Moreover, all interactive questionnaires are being revised to ensure that the questions posed are concise and tailored to efficiently glean all pertinent information necessary to make a well-reasoned determination in a timely manner and meet Federal timeliness and quality standards. Kentucky has developed an internal tool (interactive elements manual) that is a spreadsheet based questionnaire utilizing decision tree technology. This tool will be available to all adjudicators. The interactive elements manual will assist the adjudicator in performing an effective investigation by following the most efficient questioning convention and will also internally track the efficacy of the interview vis-à-vis Benefits Timeliness and Quality criteria. Kentucky is currently utilizing the Equifax Portal to retrieve relevant and material information, decrease the time it takes to complete an investigation, and improve First Payment timeliness. Kentucky has conducted User Acceptance Training (UAT) on Liquid Office, a web-based solution for creating, routing and managing electronic forms. The interactive nature of this software will reduce the time it takes to request and receive critical information and documentation from claimants. Kentucky is automating the issue assignment process with an internal Seibel based program (Assignment Manager). This will optimize the issue assignment process, emancipate resources, and improve Non-Monetary timeliness. Assignment manager is in the development stage and will proceed as resources permit. Kentucky is leveraging technology to address training needs. Specifically, Kentucky’s interactive training modules initiative. These modules are designed to address specific issues, processes, and procedures in an interactive format including tests designed to gauge information retention, understanding and practical applications. The initiative is a comprehensive and holistic approach to disseminating critical program information. Kentucky currently has six training modules vetted and ready for distribution. These modules will increase the adjudicators’ skillsets and issue awareness and thereby decrease the time it takes to identify and resolve issues. C. If a plan was in place the previous year, an explanation of why the actions contained in that plan were not successful in improving performance; and, an explanation of why the actions now specified will be more successful. The plan in place for 2018 did produce positive results. Indeed, the change in regulation 787 KAR 1:070 in addition to intensive training has resulted in an increase of .09% in Non-monetary Timeliness. Kentucky will continue to benefit from the residual effects of the reduction in the employer protest period through regulation change in 787 KAR 1:070 as well as improved training techniques. D. A brief description of plans for monitoring and assessing accomplishment of planned actions and for controlling quality after achieving performance goals. Kentucky continues to monitor and assess the efficacy of the efforts to improve Non-monetary Timeliness results. The monitoring is performed on a weekly, monthly, and quarterly basis through internal reports. Milestones 1. Improve adjudicator efficiency through intensive training techniques including static interactive training modules and testing. Completion Date: Multi-year 2. Leverage technology to decrease the time it takes to assign an issue and complete the investigation. Automate the assignment of issues through a Seibel based program (Assignment Manager). Completion Date: Multi-year

3. Leverage technology to decrease the time it takes to request and receive critical information from claimant. Implement Liquid Office, a web-based solution for creating, routing and managing electronic forms to enhance communications with the claimants. Completion Date: 03/31/19 4. Leverage technology to improve the timeliness and quality of investigations through the implementation of an internal tool (interactive elements manual) that is a spreadsheet based questionnaire utilizing decision tree technology. Completion Date: 12/31/2018 5. Utilize existing third party administrator technology, Equifax Portal, to expedite critical information requests and responses from employers and their third party administrators/agents. Completion Date: 12/31/2018 Improper Payments Measure

Performance Measure ALP CAP Based on SQSP 2019 Performance Level CAP Based on SQSP 2019 Performance Level State's Target/Actual Performance 12/31/2018 Quarter 1 3/31/2019 Quarter 2 6/30/2019 Quarter 3 9/30/2019 Quarter 4 17.00% Improper Payments Measure 10% 20.38% 22.26% Target 20.00% 19.00% 18.00% Corrective Action Plan Summary: The Summary must provide: A. The Reason for the deficiency. During the review period of 1/1/2017 to 12/31/2017, improper payments were Employment Service (ES) registration 75.5%, separation issues 9.16% and benefit year earnings (BYE) 6.34%. The majority of improper payment deficiencies were attributable to the inefficiencies in the ES Registration process. The ES Registration process during this period was facilitated through two independent systems. These systems were not integrated and lacked the capacity for sharing information. Moreover, the registration process required a separate set of credentials to access each system. A deactivation of the ES accounts lead to the inability of returning claimants to access their accounts and register in a timely manner. The separation issues were attributable in larger part due to improper benefit payments being made because the employer, or an agent of the employer, was at fault for failing to respond timely or adequately to the request of the secretary for information relating to a claim for benefits. In addition, separation instructions given by the employer were not clear and ambiguous. Additionally, the lack of effective audits to timely identify unreported and underreported earnings have resulted in BYE deficiencies. B. Provide a description of your "Plan-Do-Check-Act" corrective action plan which will be undertaken to achieve the acceptable level of performance. Examples of major actions and activities; aka, Milestones, include IT requirements, business process analysis, training, implementing process improvements, measuring effectiveness, etc. Please include a description of these actions/activities in each stage of your "Plan-Do-Check-Act" corrective action plan. In order to achieve better results, Kentucky is looking at addressing the root causes of improper payments: Employment Service (ES) registration, separation issues and benefit year earnings. 75% of Kentucky’s improper payments are attributed to ES Registration. Kentucky has embeded the ES Registration process into the UI claim filing process in December 2017. In addition, information provided to claimants during the benefit rights interview was updated in March 2018 to clarify instructions during the claim filing and ES Registration process. This has addressed both ES Registration and separation issues. To address benefit year earnings, Kentucky will work with the Commonwealth Office of Technology (COT) to develop targeted audits to look for wages in quarters that benefits were paid. In addition, Kentucky will utilize its authority to penalize employers for untimely / inadequate responses to cross match audits. An electronic wage audit notice response will be added to kcc.ky.gov website.

C. If a plan was in place the previous year, an explanation of why the actions contained in that plan were not successful in improving performance; and, an explanation of why the actions now specified will be more successful. Kentucky centralized operations during the review period. The process for ES Registration has been updated and embedded into the claim filing process to ensure registration is completed prior to first payments. In addition, Kentucky is working to develop targeted audits to look for wages in quarters that benefits were paid to address BYEs. D. A brief description of plans for monitoring and assessing accomplishment of planned actions and for controlling quality after achieving performance goals. Review BAM Improper Payments quarterly to determine top three root causes and if our milestones are effective. Review targeted audits to determine effectiveness in BYE findings. Milestones 1. Update the unemployment insurance rights and responsibility pamphlet for claimants and clarify instructions to the claimant during the claim filing and ES Registration process. Completion Date : 12/31/2018 2. BAM Investigators to use House Bill 102 for employers when writing determinations. Completion Date : 12/31/2018 3. Utilize Kentucky’s authority to penalize employers for untimely / inadequate responses to cross match audits. Completion Date : 03/31/2019 4. Add electronic wage audit notice response to kcc.ky.gov website. Completion Date : 06/30/2019 5. Review BAM improper payments quarterly to determine if changes that were implemented March 2018 for ES registration are effective. Completion Date : 12/31/2019 6. Develop and launch a state-wide campaign to prevent overpayments, direct claimant to report earnings, and recover money from existing overpayments. Completion Date : 3/31/2020 7. Leverage technology to capture claimant Work Search information as part of their bi-weekly benefit request to prevent improper payments due to lack of Work Search compliance. Completion Date : 3/31/2020

Data Validation Benefits

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Corrective Action Plan Summary: A. The Reason for the deficiency. During the Data Validation 2017 validation year, Kentucky’s Quality Control Branch unexpectedly lost their institutional knowledge of Data Validation. Kentucky was able to send a person to Data Validation training in the last quarter of the validation year that provided additional tool sets that could only be found in Data Validation training. Data Validation populations were submitted prior to end of the validation year, however all failed report validation. Data Validation is competing for priorities on a limited mainframe resource. B. Provide a description of your "Plan-Do-Check-Act" corrective action plan which will be undertaken to achieve the acceptable level of performance. Examples of major actions and activities; aka, Milestones, include IT requirements, business process analysis, training, implementing process improvements, measuring effectiveness, etc. Please include a description of these actions/activities in each stage of your "Plan-Do-Check-Act" corrective action plan. Kentucky has disseminated training to expand Data Validation efforts within the Quality Control Branch. Kentucky will create a timeline/work plan to complete each population and chart the progress. Progress reports with be discussed with management monthly to ensure data validation is completed timely. Data Validation personnel will partner with the Commonwealth Office of Technology (COT) to obtain extract files corrected as needed. C. If a plan was in place the previous year, an explanation of why the actions contained in that plan were not successful in improving performance; and, an explanation of why the actions now specified will be more successful. During the previous year, Kentucky loaded Benefits Population 3 several times, failing report validation each time but not without results; reporting problems were found in the ETA 5159. Kentucky corrected the reporting problems, but still produced failing results with Population 3. Kentucky unexpectedly lost the institutional knowledge of Data Validation. Receiving training during the last quarter of the validation year has provided a foundation to re-establish Data Validation knowledge in Kentucky. D. A brief description of plans for monitoring and assessing accomplishment of planned actions and for controlling quality after achieving performance goals. A timeline for populations will be created and tracked in the Quality Control Branch. Monthly meetings with Data Validation team to discuss Data Validation will address issues as they arise. Progress reports will be kept for each population to include numbers of times loaded, extract file errors to be fixed, reporting issues, and other items of concern. Milestones 1. Begin process of training additional employee currently on staff to assist with Benefits Data Validation processes. Completion Date: 12/31/2019 2. Monthly meetings with Data Validation team to discuss progress and future populations. Completion Date: Multi-year 3. Population 6-11 submitted during the second quarter of the data validation period. If populations do not pass report validation, determine root causes and repeat the steps. Completion Date: 12/31/2018 4. Population 1-5 submitted during third quarter of the data validation period. If populations do not pass report validation, determine root causes and repeat the steps. Completion Date: 12/31/2018 5. Population 12-15 submitted during fourth quarter of the data validation period. If populations do not pass report validation, determine root causes and repeat the steps. Completion Date: 3/30/2019 6. Benefits Module 4 submitted during fourth quarter of the data validation period. If populations do not pass report validation, determine root causes and repeat the steps. Completion Date: 6/30/2019 Data Validation Tax

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Corrective Action Plan Summary: A. The Reason for the deficiency. During the Data Validation 2017 validation year, Kentucky’s Quality Control Branch unexpectedly lost their institutional knowledge of Data Validation. Kentucky was able to send a person to Data Validation training in the last quarter of the validation year that provided additional tool sets that could only be found in Data Validation training. Data Validation populations were submitted prior to end of the validation year, however all failed report validation. Data Validation is competing for priorities on a limited mainframe resource. B. Provide a description of your "Plan-Do-Check-Act" corrective action plan which will be undertaken to achieve the acceptable level of performance. Examples of major actions and activities; aka, Milestones, include IT requirements, business process analysis, training, implementing process improvements, measuring effectiveness, etc. Please include a description of these actions/activities in each stage of your "Plan-Do-Check-Act" corrective action plan. Kentucky has disseminated training to expand Data Validation efforts within the Quality Control Branch. Kentucky will create a timeline/work plan to complete each population and chart the progress. Progress reports with be discussed with management monthly to ensure data validation is completed timely. Data Validation personnel will partner with the Commonwealth Office of Technology (COT) to obtain extract files corrected as needed. C. If a plan was in place the previous year, an explanation of why the actions contained in that plan were not successful in improving performance; and, an explanation of why the actions now specified will be more successful. During the previous year, Kentucky loaded Benefits Population 3 several times, failing report validation each time but not without results; reporting problems were found in the ETA 5159. Kentucky corrected the reporting problems, but still produced failing results with Population 3. Kentucky unexpectedly lost the institutional knowledge of Data Validation. Receiving training during the last quarter of the validation year has provided a foundation to re-establish Data Validation knowledge in Kentucky. D. A brief description of plans for monitoring and assessing accomplishment of planned actions and for controlling quality after achieving performance goals. A timeline for populations will be created and tracked in the Quality Control Branch. Monthly meetings with Data Validation team to discuss Data Validation will address issues as they arise. Progress reports will be kept for each population to include numbers of times loaded, extract file errors to be fixed, reporting issues, and other items of concern. Milestones 1. Begin process of training additional employee currently on staff to assist with Tax Data Validation processes. Completion Date: 3/31/2019 2. Monthly meetings with Data Validation team to discuss progress and future populations. Completion Date: Multi-year 3. Tax Population 1-5 submitted during third quarter of the data validation period. If populations do not pass report validation, determine root causes and repeat the steps. Completion Date: 3/31/2018 4. Tax Module 4 and Module 5 submitted during fourth quarter of the data validation period. If populations do not pass report validation, determine root causes and repeat the steps. Completion Date: 3/31/2019 Benefit Accuracy Measurement

Performance Measures ALP CAP Based on SQSP 2019 Performance Level CAP Based on SQSP 2019 Performance Level State's Target/Actual Performance 12/31/2018 Quarter 1 3/31/2019 Quarter 2 6/30/2019 Quarter 3 9/30/2019 Quarter 4 70% BAM Operations Compliant - 60-Day Paid Timeliness = 70% 50.19% Target 50% 60% 65% BAM Operations Compliant - 60-Day Monetary Timeliness = 60% 48.10% Target 60.00% 60.00% 70.00% 75.00% BAM Operations Compliant - 90-Day Monetary Timeliness = 85% 77.10% Target 85.00% 87.00% 88.00% 89.00% BAM Operations Compliant - 60-Day Nonseparation Timeliness = 60% 31.28% Target 60.00% 60.00% 70.00% 75.00% NDNH BAM Compliance Pass Fail Pass Target PASS PASS PASS PASS Corrective Action Plan Summary: A. The Reason for the deficiency. During the period that covered BAM batches 201627-201726, timeliness issues in BAM investigations have arisen due to a lack of outlined goals for the investigators. Many of the investigators perform multiple roles and their time has not been properly prioritized during this time period. Being clearly aware of the expectations regarding investigations should bring swift improvement. The NDNH BAM hit file was found to be non-compliant due to the W-4 thru date being less than 30 days from the key week. B. Provide a description of your "Plan-Do-Check-Act" corrective action plan which will be undertaken to achieve the acceptable level of performance. Examples of major actions and activities; aka, Milestones, include IT requirements, business process analysis, training, implementing process improvements, measuring effectiveness, etc. Please include a description of these actions/activities in each stage of your "Plan-Do-Check-Act" corrective action plan. The manager of the Quality Control Branch, in conjunction with the BAM supervisor, is currently implementing checks and balances to ensure timely investigations, and providing support and training where needed. Other areas of improvement will include better communication with employers, including but not limited to: email scripts for investigators, revamping written (paper) communication with employers, etc. These modernizations, including written and established goals for case completion, should invigorate our BAM investigators and produce more timely results in the future. Weekly meetings with BAM Staff are already in place to address barriers to case completion as well as weekly goals and progress updates. Case trackers have been implemented to provide branch management an operation picture and to identify issues with case completion. Kentucky is working to create a backlog/timeliness contingency plan to address potential timeliness issues and to ensure DOL timeliness standards are meet. In addition, Kentucky currently assigns 40 additional BAM cases for both paid and denied cases; this is above DOL requirements. Kentucky will reduce the number of BAM cases assigned to the required DOL standard to help address timeliness of both paid and denied cases. Kentucky is working in partnership with the Commonwealth Office of Technology and On Point to make the necessary changes to programing to bring the NDNH hit file into compliance. C. If a plan was in place the previous year, an explanation of why the actions contained in that plan were not successful in improving performance; and, an explanation of why the actions now specified will be more successful. D. A brief description of plans for monitoring and assessing accomplishment of planned actions and for controlling quality after achieving performance goals. Weekly meetings with BAM Staff to address barriers to case completion, review weekly goals and progress reports. BAM case trackers will provide the needed operational picture to identify triggers for implementing timeliness contingency plan. Kentucky will monitor the number of cases completed to ensure DOL requirements of 480 cases is meet. Milestones 1. Update NDNH hit file to comply with DOL guidelines for the W-4 thru date. Completion Date: 12/31/2018 2. Revamp BAM Case documents to function more efficiently through better use of available technology, including mail-merge functionality and creation of a single, comprehensive BAM contact document. Completion Date: 12/31/2018 3. Create backlog contingency plan to address issues and actions to take when DOL timeliness is not being meet. Completion Date: 12/31/2018 4. Create standardized scripts for email correspondence. Transition to global BAM email address for sending and receiving electronic BAM documents to improve efficiency of BAM unit by allowing cases to continue to be worked when an investigator is out of the office. Completion Date: 12/31/2018 5. Implement processes so that as documents are received they are immediately reviewed. If they are incomplete or additional information is required, this is addressed by the document reviewer at that time. Completion Date: 12/31/2018 6. Review case trackers weekly to ensure timeliness and implement timeliness contingency plan if thresholds identified are not meet. Completion Date: 12/31/2018 7. Review BAM procedural manual quarterly and update to ensure consistent standards are established and followed throughout the BAM unit. Completion Date: Multi-year