Narrative: a. 3.

BIENNIAL STATE QUALITY SERVICE PLAN ARKANSAS - FY 2024

During FY 2024, the Arkansas Division of Workforce Services (ADWS) will continue to pursue a strategic direction designed to take ADWS from a mainframe legacy environment to a new web-based environment using cloud-based technology and focusing on customer self-service. The intent of this new environment is to better leverage staff resources due to continued declines in federal program and administrative funding. As of February 2022, ADWS successfully transitioned to the service center model from the local office driven model. This has removed barriers to claimants by removing the necessity of having to travel to local offices in person, which in rural areas of the state can be challenging, while keeping costs to provide services cost effective.

Improving Processes

ADWS is continuing to work with the business community and is in the process of creating enhancements to current employer facing systems, to streamline requirements and increase participation by submitting quality electronic responses to needed information to maintain the integrity of the UI program. This includes scheduling employer training sessions to explain the benefits of the updated processes, the ability to upload additional documentation to the Tax21 system for notice to last employers (separation reasons), benefit charge notices, and adjudication questionnaires. By giving employers one location to submit new hire registry updates, quarterly UI contribution reports, responses to UI benefit notices and reporting suspected UI fraud, we hope to encourage employer compliance and active participation.

ADWS currently accepts electronic applications for UI benefits though the EZARC (online claims filing system), and in person at local offices around the state. Each local office has a computer lab linked to the EZARC application and staff able to assist claimants filing claims using electronic or paper applications. UI has transitioned to a one phone number format and both employers and claimants are able to gain assistance with UI questions or issues via the service center toll free number. This has added the ability to leverage current staff to assist in all areas of the state and continue to provide services although nine local offices have been closed. This is a much more economical method for providing quality and consistent service across the state.

ADWS participated in the Claimant Experience Pilot and was the first state to implement both the Login.gov and United States Postal Service (USPS) pilot processes for ID verification. This has been a hugely successful endeavor and has assisted Arkansas claimants with providing the required verification while reducing the travel time needed to fulfill the obligation and maintaining the integrity of the UI trust fund.

As all states experienced during the pandemic, Arkansas dealt with the extreme increase of claims, and struggled with that volume while having difficulties retaining staff. Through facing those challenges ADWS is refocused on providing more in-depth training to new hires and developing incentives to retain those well experience staff. Staff for the service center (entry level staff) go through a three-day classroom setting, training with source materials to use as reference. This is followed by 2 days of in person training with UI Technical staff, working and filing claims as a group and then individually with one-on-one assistance as needed. New staff then process claims of varying difficulty for two to three weeks to gain a better knowledge on what is required by claimants and employers, and these claims are then reviewed by supervisors for quality. Once it is determined that they have mastered this skill, they move on to phone call training. This begins with listing to recorded calls and working though the issues as a group in the system. They then move forward to one-on-one real time call observation while they sit with a seasoned staff member and see it in action. They are then prepared to handle Tier One calls that are simpler issues and have quick access to supervisors and other members of their team via chat functions, to handle any issues as they arise.

We are holding monthly training sprints on a variety of topics to keep staff informed of changes to the program and to prevent fraud as well as weekly emails from UI management, addressing issues as they happen. We are also prioritizing staff to complete the training sections available through the National Association of State Workforce Agencies’ (NASWA) learning management platform which has been successful with training new Benefits Accuracy Management (BAM) and Data Validation (DV) staff. ADWS also utilizes the good working relationship with our DOL regional office that provides excellent guidance on a variety of topics.

Training and retention continue to be issues of emphasis for ADWS to cultivate and maintain a well-trained and experienced staff. ADWS continues in its mission of cultivating staff with a focus on succession planning.

ADWS continues to utilize the National Integrity Academy as a tool for staff development and improvement for UI Administration management staff. ADWS remains committed to providing quality service along with a commitment to reduce and eliminate improper payments; training emphasis will continue to focus on promoting a thorough understanding and working knowledge of the unemployment insurance program. This commitment to staff development will be instrumental in ensuring continued improved program performance regarding Core Measures and Integrity efforts.

As ADWS staff has transitioned all UI staff reporting to UI Admin as opposed to the local office managers, a newly invigorated training system has been developed and implemented to ensure a constant voice of the UI program and relating program goals and expectations to staff. Existing staff are also getting refresher training to ensure a thorough understanding of not only their own department but also how the individual departments fit together to create the life cycle of the UI program.

Timely Delivery and Backlog

As all states have, Arkansas has been affected by the backlog of claims from the pandemic period, and the retroactivity needed to return to compliance with DOL requirements. This coupled with continued staff turnover has created additional challenges with the 21-day first pay timeliness measure. We recently received approval to increase financial incentives for staff to become expert adjudicators (which typically takes two plus years of experience to master). This update to the pay scale and injection of new employees in the service center will allow ADWS to return to its pre-pandemic high standards within all DOL core measures.

During the 2024 fiscal year, ADWS will be transitioning away from the existing in-house supported imaging system and continuing to enhance the Docuware system and adding additional documents to the logic used to auto image to claims. As the UI program is dependent on images to make quality decisions and ensure the integrity of the UI trust fund, accurate, expedient, and dependable imagining and retaining of source documents is vital. We are working towards transitioning from bar codes to QR codes for efficiency and less human touch needed while reducing error rates.

Plans for Increased Equitable Access

ADWS received approval of the Equity Grant, and is working to implement that plan, to allow for more claimant self-service options, by re-writing all claimant facing notices to 9th grade reading level, providing the updated versions in English, Spanish, Vietnamese, Marshallese and Laotian through paper correspondence and electronic communications. We feel this will allow more equitable access to services, and reduce the number of days to issue decisions, as information will be more easily understood by claimants reducing wait time for eligible benefits.

ADWS will update the wording on the EZARC (online application system), mailed correspondence for the initial application process, additional requests for information, determinations and filing weekly certifications by using the Flesch-Kincaid Grade Level Readability Test. This system allows suggested wording to be entered and assigns a reading grade level based on sentence length and word length. ADWS currently has approximately 9,644 forms that will be updated.

The present methods of tracking education levels on EZARC or the initial application document will be revised to allow for more accurate data that can be used to easier track claimants and their understanding of Division documents. For example, claimants who only finished 1st – 5th grade, 6th – 9th grade, 10th – 12th grade in primary or secondary schools, different levels or degrees of college or university, and any Certificates of Completion by claimants who have cognitive disabilities.

Currently, the UI Service Center uses Wrap Up Codes to identify broad reasons for incoming calls and we are unable to assess how many calls are related to questions about forms. Prior to the starting date of the grant, special Wrap Up Codes will be created to track calls related to documents received by claimants and employers. Once these documents have been revised, focus panels comprised of the various departments under the Department of Commerce, and not familiar with Unemployment Insurance, will be asked to review the documents for comprehension and readability.

ADWS will also produce a series of YouTube videos that will include an overview of the UI process from initial claim to decision, application creation demonstration, how to complete a weekly certification, the determination process, and the appeals process. The scripts for the YouTube videos will also be written using the Felsch- Kincaid Grade Level Readability Test. Tracking of YouTube complete or partial views will be done through the YouTube account.

This will Improve claimant communications and enhance customer service to claimants from the applications process though the appeals process in both written and enhanced audio-visual format. Revised documents will be tracked quarterly for any new documents added to the library.

Tracking of the improved documents will be demonstrated by using the first pay timeliness reports for those claimants identified as a target demographic to reflect that the “easier to understand information” provided back was enough to prevent adjudicators from having to make, third and fourth attempts for additional information.

Supporting Reemployment

RESEA

All UI claimants are scored based on a set of demographic variables to determine those most likely to exhaust benefits before returning to the workforce. When claimants are selected, they are required to attend an initial RESEA review, where they meet one-on-one with an ADWS reemployment specialist. The participants must meet certain RESEA program requirements such as completing a Career Action Plan (CAP), conducting labor market research, tracking work search activities, creating or providing a resume, and participating in ongoing reemployment services.

All program requirements are explained in the initial review. Failure to comply with the RESEA program requirements will result in a delay or loss of unemployment benefits.

Short-Term Compensation

Arkansas is an active participant in the Short-Term Compensation (STC) program often referred to as shared work. This program gained visibility with employers during the pandemic period where Arkansas had record participation. ADWS continues to support employers and claimants though the STC process by explaining the program, and the benefits to employers to maintain employee’s connection to the workforce and avoid layoffs.

Work Search

ACT 587 amends Arkansas code §11-10-507 and, effective January 1, 2024, increases the number of job search contacts to 5 per week for each current claimant and further defines what constitutes a required work search contact as well as sets a requirement for ADWS to audit 100 work search logs submitted by claimants each week. This will further protect the integrity of the UI trust fund and assist to ensure that only eligible claimants will continue to receive benefits.

To more seamlessly combine the UI program requirement to register for work, Wagener-Peyser Requirements to provide work search assistance, WIOA opportunities for training, and the additional ACT 587 requirements for work search audit, ADWS is scheduled to implement the ARLAUNCH system that will assist those looking for work as well as UI claimants more quickly find work. This system uses a combination of Labor Market Information (LMI) data, wage information, and work experience, to suggest alternate suitable work. Combining this tool along with the existing UI systems, ADWS is working to develop a Certification Hub that integrates the work search tracker and the weekly certification process while improving data collection for auditing.

This new digital work search tracking tool stood up for constituents to log and monitor their progress towards work search requirements, will be mobile friendly have a consistent look and feel. Integration & compatibility will incentivize its use along with improved data collection on back end to ensure the auditing processes are as seamless as possible for claimant and ADWS staff. This will work with the existing mainframe integration but will be compatible with cloud-migration and have a single sign-on utilizing Login.gov for enhanced security, so users can seamlessly move between the tools and there is no “wrong” point of entry.

UI Program Integrity

As further explained in the Integrity action plan, ADWS continues to expand controls used in the UI program to deter the onslaught of UI claim fraudulent activities. One method ADWS is utilizing to minimize UI fraud is the continued partnership with the employer community. Fostering these relationships with the Arkansas State Chamber of Commerce and Society for Human Resource Management (SHRM), continuing to offer training and gain insight on what is needed by the business community, greatly assists in identifying potential separation, wage earnings, and identity theft related claim fraud.

ADWS participated in the Login.gov and USPS ID verification which has assisted in locating and stopping fraudulent payments from being processed for those claims while meeting all DOL requirements for due process. We continue to utilize data analytics to identify patterns and connect fraudulent claims.

ADWS utilizes the Integrity Data Hub (IDH) via once-a-week file transmissions, to identify potential fraud during the waiting week. Moving forward we are investigating what is needed to fully leverage the IDH processes to move to a real time data comparison to further stop potential fraud schemes.

Like the UI State Information Data Exchange System (SIDES), ADWS’ Adjudication (AAS) system is web- based and designed to streamline and increase the efficiency of the nonmonetary determination process. Since AAS was implemented in Arkansas, ADWS has continued to enhance the system to further streamline the adjudication process. Through the electronic response system employers receive and respond to Notices to Last Employer, Notices to Base Period Employer, and questionnaires regarding nonmonetary issues via the Internet. ADWS is aware that the United States Department of Labor (USDOL) encourages states to fully implement SIDES; however, ADWS’ Automated Adjudication System and electronic response system for employers, which is based upon our own state UI law, enables Arkansas to maintain the same functionality as SIDES along with ability to tailor questionnaires designed to elicit more information from employers with no additional subscription costs to the agency. ADWS will consider incorporating SIDES into its modernized benefits system.

Worker Misclassification

ADWS has continued to struggle with the identification of misclassified workers. Retaining well qualified staff has been challenging as they have more financial incentive for leaving ADWS and moving to other state agencies and completing similar work requirements. We recently received approval to increase the pay grade for senior field tax representatives that complete misclassification investigations as well as audit employers for compliance. We believe this enhancement for staff as well as continued use of technology to simplify audit processes will assist in the identification of misclassified employees and meeting the audit core measures with DOL.

Required Reporting

As all states have suffered thought the pandemic period, we have seen large turnovers through attrition of well qualified UI reporting staff. The reporting requirements are complex and interwoven creating additional challenges for unseasoned staff. This as well as staff shortages in the budget units, financial management service and UI core program units has stressed this difficult situation. ADWS continues to face the issues of timely reporting and is in the process of hiring additional support staff to assist with these processes.

Government Performance and Results Act (GPRA) Percent of Interstate Payments Made Timely

To meet target, the state must have an average greater than 87% for all intrastate first payments for full weeks of Unemployment Compensation (UC) made within 21 days from the week ending date of the first compensable week. ADWS is currently at 74.15%, or 12.85% less than the given target. This is directly related to staffing issues that are in the process of being addressed for both the Service Center and Adjudication sections.

Dropping below ideal levels in both departments had slowed processing on initial and additional claims, and greatly increased the number of days to issue a decision.

Detection of Recoverable Overpayments

To meet target, the state must have a detection rate of recoverable overpayments greater than 57.5%. ADWS for the grading period detected 204.92% of collectible overpayments, which is much larger than typical years, as staff are continuing to identify and issue decisions for claims during the pandemic period.

Employer Tax Liability Decision Made Timely

To meet target, the state must have an average greater than 90% for all employer tax liability determinations made timely, within 90 days of the end of the first quarter of liability. ADWS is currently at 87.92%, or 2.08% less than the given target. This as well as many other issues are related to staff shortages across the UI program. This challenge is in the process of being addresses by hiring additional staff and reorganizing the field tax, employer accounts, and quarterly report processing sections.

Core Measures

The Detection of Overpayments Measure

This measure is the percentage of detectable/recoverable overpayments estimated by the Benefit Accuracy Measurement (BAM) survey that was established for recovery through regular UI Benefit Payment Control (BPC) program operations. The performance period for the BPC component is the three-year period ending March 31, 2023; the performance period for the BAM component is the three-year period ending September 30, 2022. The Arkansas rate for the appropriate BPC and BAM reporting periods was 64.97%, well between the requirements of above 50% and below 95%, no corrective action plan is currently needed, although ADWS has prioritized this measure to ensure continued protection of the security of the UI trust fund.

Effective Audit Measure

The Effective Audit Measure, as noted in UIPL No. 03- 11, is a blended measure of the following four factors:

• Percentage of Contributory Employers Audited Annually
• Percentage of Total Wage Changed as a Result of Audit
• Percentage of Total Wages Audited
• Average Number of Misclassifications Detected Per Audit

Each of the four factors has a minimum standard score that states must meet to pass the Effective Audit Measure, as well as an overall combined score that must be achieved. The measure also requires each state to direct additional emphasis to the factor(s) that state personnel deem important to the state. An additional two points must be earned among any of the four factors to attain the overall passing score of at least 7.0. A CAP is required for states that do not meet the measure based on calendar year 2022 data. ADWS did fail this measure for the 2022 calendar year with the following scores:

• Employers Audited (penetration rate) 0.9% which is below the required 1.0% but well above the national average of 0.7%.
• Change in Total Wages from Audits (picking up wages during the audit process), 4.6% which is above the requirement of 2.0%.
• Total Wages Audited, 1.1% which is above the required 1.0% and slightly below the national average of 1.2%
• Average Number of Misclassified Employees Detected per Audit, 1.9% which is above the required 1.0%.
• Total of all Factors, 8.5% which is well above the required 7.0% total score for the measure.

ADWS failed this grouped measure, based on not meeting the total number of employers audited by 0.10% or 85 audits over the calendar year, and therefore failed the total group although three of four individual measures passed.

As all states, ADWS redirected staff to claims processing during the pandemic period and lost seasoned audit staff though attrition and moving on to more financially incentivized positions. To address this issue Department of Commerce approved four additional grade-seven positions. The department previously had twelve grade-six positions. To bridge the gap in funding, the total staff will be reduced to ten, with four grade-seven and six grade-six positions managed by one grade-eight position. This has been accomplished by reducing the administrative tasks associated with these positions and focusing solely on the audit requirements. These new positions, which are in the process of being advertised and hired, are expected to be in place mid to late November 2023. We strongly believe that making career paths with additional financial incentive will assist in retaining highly skilled staff, and enticing new staff, and will increase scores and allow ADWS to pass this core measure in the future. As the new positions are late in the calendar year, while we continue to increase the number of audits, we do not think we will pass this measure for calendar year 2023 but will for 2024.

Improper Payments Measure

The Improper Payments Measure is defined as Unemployment Compensation (UC) overpaid plus UC underpaid divided by the total amount of UC paid. It is based on estimates from the results of the BAM survey of paid UC claims in the State UI, Unemployment Compensation for Federal Employees, and Unemployment Compensation for Ex-Servicemembers programs. The Payment Integrity Information Act (PIIA) requires agencies to examine the risk of erroneous payments in all programs and activities they administer. This Federal law defines the term improper payment as:

• Any payment that should not have been made or that was made in an incorrect amount, including an overpayment or underpayment, under a statutory, contractual, administrative, or other legally applicable requirement; and
• Includes—
  • Any payment to an ineligible recipient
  • Any payment for an ineligible good or service
  • Any duplicate payment
  • Any payment for a good or service not received, except for those payments where authorized by law
  • Any payment that does not account for credit for applicable discounts.

PIIA requires Federal programs to report an annual improper payment rate. It also requires agencies to include all identified improper payments in the reported estimate, regardless of whether the improper payment in question has been or is being recovered (see UIPL No. 09-13, Change 1 for ETA’s approved improper payment rate computation methodology).

States are expected to maintain an improper payment rate of less than 10% for covered UC programs. This ALP is applicable to the 2022 PIIA performance period (July 1, 2021, to June 30, 2022). A state failing to meet the ALP for the 2022 PIIA performance period will be expected to develop a CAP as part of the FY 2024 SQSP.

ADWS had an effective improper payment rate of 11.64% for the BAM effective period of July 2021-June 2022 which is slightly higher than the required 10% or less and is significantly lower than the national average of 14.924%. The score of 11.64% places Arkansas as 20 of 52 or in the top performing 38% of all states.

This corrective action was met and cleared by regional DOL office based on four quarters below the requirement as of the second quarter of 2023 submission. This was possible through concerted efforts from UI staff to prioritize quality decisions, and timeliness of wage-earning investigations. With wage earnings investigation creating 44.104% of all overpayments for the period, this is a key area for system enhancement. ADWS is currently working with partners to write an updated system to create the wage earnings audit the day the wages are received from the employer in the Tax21 system as opposed to the current process of cross matching once each quarter after all contributions reports for the quarter have been processed. This new system and continuing to work with the employer community will assist in ADWS continuing to meet this core measure.

UI Overpayment Recovery Measure

As explained in UIPL No. 09-13, the recovery rate is “the value of improper overpayments recovered divided by the value of improper overpayments identified.” The ALP for the recovery rate measure is 68 percent for the 2022 PIIA performance period. Pursuant to the UI Reports Handbook (ET Handbook No. 401, 5th edition), the June quarter ETA 227 reports are due August 1st each year. A state failing to meet 19 the ALP for the 2022 PIIA performance period will be expected to develop a CAP as part of the FY 2024 SQSP.

ADWS’ UI overpayment recovery measure of 54.69% for the July 2021-June 2022 time frame is 13.31%, lower than the required 68%. During the pandemic period ADWS could not focus resources on the creation of overpayments as all focus was forced to the issuing of payments to those claimants in desperate need and stopping fraudulent claims from being paid in real-time. We have circled back and are creating large volumes of overpayments for prior periods, due in part to vendor issues and the retroactivity required to clear all remaining audit finding related to CARES act funds. With this renewed focus on collections from prior periods and clearing that backlog of work, we believe ADWS will regain is pre-pandemic levels well above the required 68%.

Secretary Standards

Data for the most recent secretary’s year April 2022 through March 2023 was as follows.

1. First Payment Promptness, Intrastate 14/21 days: 74.15%, less than 87% or above requirement.
2. First Payment Promptness, intrastate 35 days: 94.31%, greater than the required 93% or greater requirement.
3. First Payment Promptness Interstate 14/21 days: 74.43%, greater than the 70% or greater requirement.
4. First Payment Promptness Interstate 35 days: 95.64%, greater than the 78% or greater requirement.
5. Lower Authority Appeals 30 days: 61.89%, greater than the 60% or greater requirement.
6. Lower Authority Appeals 45 days: 78.27%, less than the 80% or higher requirement.

First Payment Promptness percent of all first payments within 14/21 days after the compensable week. ADWS is making great strides but continues to struggle with this measure. For the period April 1, 2021, through March 31, 2022, at 62.82% or 24.18% less than the required level of performance. While we increased for the period of April 1, 2022, through March 31, 2023, to 74.99% we remain 12.01% lower than the requirement of 87%.

This is due to staffing struggles and the inability to retain seasoned well-trained staff. Adjudication is a difficult position to train and on average takes two years beyond service center experience to gain the depth of knowledge to make expedient and accurate expert level decisions.

Through assistance from the Department of Commerce, we have retained an additional seven grade-seven positions, for a total of twelve expert level adjudicators. We are in the process of advertising and hiring for these positions, which is expected to be completed mid November 2023. We expect this enhanced career path option will entice new staff and assist in retaining experienced staff to the Adjudication department which will increase our timeliness measures and retain our high-quality.

Average Age of pending lower authority appeals time lapse less than 45 days from the filing date. ADWS is making great strides but due to the period has not yet increased to greater than 80% of all pending decision less than 45 days from the filing date. For the period April 1, 2021, through March 31, 2022, ADWS was at 59.37% or 20.63% lower than the required 80% measure. For the period April 1, 2022, through March 31, 2023, ADWS was at 78.27%, or 1.73% lower than the required 80% measure. Appeals Tribunal staff is working to correct these issues and is working though the backlog of pandemic period claims as quickly as possible. A large employer in the state had all staff with pandemic related claims with the same issue concerning one week of benefits. These hearings have now all been completed. A blanket waiver was requested and approved for these claimants. The 2022/3 numbers are in compliance, but the rolling quarterly average will take time to adjust back to normal levels. The volume of appeals has reduced and, as of June 2023, is back to ALP standards for the 12-month rolling average.

UI Programs

State Directory of New Hires (SDNH)/National Directory of New Hires (NDNH)

ADWS’ Benefit Accuracy Measurement (BAM) Unit is compliant with the NDNH matching requirements as set forth in ET Handbook No. 395, 5th Edition, Chapter VI, UIPL 03-07, and UIPL No., Change 1.

Benefit Accuracy Measurement (BAM)

State BAM operations or operational components that are not compliant with investigative and/or method and procedure requirements established in ET Handbook No. 395, 5th Edition, and through findings established through ET Handbook No. 396, 4th Edition monitoring reviews (based on the annual determination letter issued on or before May 1, 2023), are expected to be addressed in a CAP. This includes paid and denied claim population variances outside established control limits.

ADWS suffered a great loss of staff in the BAM unit with a combined experience of over fifty years in January 2022. This created a significant need to hire new staff from within the UI program and provide several sections of additional training with no financial incentive for staff. In June 2023 with the assistance of the Department of Commerce we were able to retain four grade-seven positions, to complete this task. We hope that creating these career paths will assist in retaining seasoned staff and enticing new staff to the BAM unit.

With assistance from our regional DOL partners, and utilizing NASWA’s training modules for BAM, we have been able to successfully implement the new processes to reduce administrative tasks and increase the case completion rate although we are not at the required measures contained in the 2023 BAM annual determination letter.

• BAM Operations Complaint 60 day paid timeliness must be greater than 70%. For the 2022 determination letter, ADWS was at 66.67% and dropped to 39.38% for the 2023 determination letter. ADWS has exceeded this measure for the last three quarters at the following rates: 2022/4: 75.42%, 2023/1: 91.38%, 2023/2: 94.21%. With one more quarter above the required measure this CAP will be satisfied.
• BAM Operations Complaint 90 day Paid Timeliness must be greater than 95%. For the 2022 determination letter ADWS was at 91.25% and dropped to 80% for the 2023 determination letter. ADWS has exceeded this measure for the last three quarters at the following rates: 2022/4: 99.15%, 2023/1: 99.14%, 2023/2: 100.00%. With one more quarter above the required measure this CAP will be satisfied.
• BAM Operations Compliant 60 day monetary Timeliness must be greater than 60%. For the 2023 determination letter ADWS was at 46.36% or 13.64% less than required. ADWS has exceeded this measure for the last three quarters at the following rates: 2022/4: 94.44%, 2023/1: 88.37%, 2023/2: 86.05%. With one more quarter above the required measure this CAP will be satisfied.
• BAM Operations Complaint 90 day Monetary Timeliness must be greater than 85%. For the 2023 determination letter ADWS was at 83.44% or 1.56% less than required. ADWS has exceeded this measure for the last three quarters at the following rates: 2022/4: 100.00%, 2023/1: 100.00%, 2023/2: 95.35%. With one more quarter above the required measure this CAP will be satisfied.
• BAM Operations Complaint 60 day Separation Timeliness must be greater than 60%. For the 2023 determination letter ADWS was at 42.38% or 17.62% less than required. ADWS has exceeded this measure for the last three quarters at the following rates: 2022/4: 100.00%, 2023/1: 97.37%, 2023/2: 94.74%. With one more quarter above the required measure this CAP will be satisfied.
• BAM Operations Complaint 90 day Separation Timeliness must be greater than 85%. For the 2023 determination letter ADWS was at 81.46% or 3.54% less than required. ADWS has exceeded this measure for the last three quarters at the following rates: 2022/4: 100.00%, 2023/1: 100.00%, 2023/2: 97.37%. With one more quarter above the required measure this CAP will be satisfied.
• BAM Operations Complaint 60 day Nonseparation Timeliness must be greater than 60%. For the 2023 determination letter ADWS was at 52.32% or 7.68% less than required. ADWS has exceeded this measure for the last three quarters at the following rates: 2022/4: 100.00%, 2023/1: 94.74%, 2023/2: 94.74%. With one more quarter above the required measure this CAP will be satisfied.
• BAM Operations Complaint Paid Comparison reports must be greater than -10% and less than 5%. For the 2022 determination letter ADWS was at -21.27% and increased to -19.75% for the 2023 determination letter. ADWS has met this measure for the last three quarters at the following rates: 2022/4: 4.31%, 2023/1: 5.08%, 2023/2: -9.03%. With one more quarter meeting the required measure this CAP will be satisfied.
• BAM Operations Complaint Monetary Sample Selection must be 150. Due to a system programming issue with pulling claims that were PEUC incorrectly, only 143 samples were selected instead of the 38 per quarter for a total of 152. This was corrected in the 2023/2 quarter with the following results. 2023/2: 36 samples, 2023/2: 41 samples. With two more quarters above the minimum sample, we will meet the requirement of 150. This issue will be corrected more efficiently once ADWS is off the mainframe system and migrated to a cloud-based environment. Updating the current system is cost prohibitive and cumbersome. We are scheduled to be in the cloud by December 2024, allowing these needed updates to be completed.

Tax Performance System (TPS)

ADWS’ UI Tax Operations follow Federal reporting and oversight requirements. Unfortunately, ADWS failed all sections of the TPS review as issues with the benefits imaging system prevented the reviewer from accessing the images needed to prove the samples were correct. This was also identified in the onsite TPS review process and corrections are in the process of being implemented. This includes a temporary stop gap measure where staff imaging daily account updates as they are worked. During the 2023 fiscal year, ADWS will be transitioning away from the existing in-house supported imaging system and continuing to enhance the Docuware system and adding additional documents to the logic used to auto image to claims. As the UI program is dependent on images to make quality decisions and ensure the integrity of the UI trust fund, accurate, expedient, and dependable imagining and retaining of source documents is vital. We are working towards transitioning from bar codes to QR codes for efficiency and less human touch needed while reducing error rates.

Data Validation (DV)

ADWS submitted all DV items for validation and certification by June 10, 2023. All DV elements in tax passed with no issues. Population 4 of Data Validation for benefits failed and was determined to be a timing issue.

There are four sections within the Data Validation population related to Payments: First Payments, Continued Weeks Payments, Combined Wage Claims First Payments all passed, but Report Validation failed. We believe this has to do with the way the sample is pulled and timing for the cutoff from one quarter to another. This is related to the difficulty and prohibitive cost to update the programming of the main frame backend system. We are working with IT staff to better time the pull of the population for DV as it relates to batch processing.

Other UI Performance

UI Reporting Requirements

The spreadsheet provided for creating the SQSP included a listing of missing and untimely submitted reports for the reporting period.

• AF 227 for 12/31/2022 was submitted 2 days late in error.
• Am227 for 09/30/2022 was submitted on 10/20/2022 (timely) please see attached copy of 227 from the state portal.
• AM227 for 12/31/2022 was submitted on 01/11/2023 (timely) please see the attached copy of the 227 from the state portal.
• AM227 for 03/31/2023 was submitted on 04/06/2023 (timely) please see the attached copy of the 227 from the state portal.

We believe the AM227 reports are reading in the system as not submitted as all values are 0.00. ADWS has had no overpayments for the MEUC program.

• AR204 was submitted late due to a technical difficulty with negative charges form the prior year. ETA regional helped work though that issue and it was submitted with an additional technical assistance.
• AR204R has not been able to be manually entered and ADWS has had issues submitting it though the upload process. We continue to work on issues with the 204-reporting process.
• AR2112: for 12/31/2022 was submitted one day late on 02/02/2023. This is due to staff issues in the budget and financial management units that are being addressed currently.
• AR581 for 09/30/2022, submitted one day late.
• AR581 for 12/31/2022, submitted one day late.

This this staff member is no longer with the agency, and additional checks have been added to ensure timely submission in the future.

• AR586 for 09/30/2022 was submitted four days late due to a technical difficulty with the batch job that creates this report. This will be addressed in the migration to a cloud-based environment.
• AR8401 for 12/31/2022 was submitted one day late due to staff shortages in UI accounting.
• AR9048 for 09/30/2022 was not submitted.
• AR9048 for 12/31/2022 was not submitted.
• AR9048 for 03/31/2023 was not submitted.

The 9048 reports are no longer used as the RES program evolved into the RESEA program and these reports no longer exist.

• AR9056 for 12/31/2022 was submitted one week late due to technical difficulties with the sate portal, please see attached email chain.
• AR9056 for 03/31/2023 was submitted 3 weeks late due to technical difficulties with the state portal.
• ARUI3 for 09/30/2022 was submitted on 11/21/2022, 20 days after the due date, due to staffing shortages in the budget unit.
• ARUI3 for 03/31/2023 was submitted on 05/24/2023 23 days late due to staffing shortages in the budget unit.
• AW9050 for 04/30/2023 was submitted on 07/03/2023 42 days late sue to a technical issue with the file on the mainframe system.

There were several reports that were submitted untimely due to high staff turnover. We are working to put failsafe measures in place to prevent this from occurring in the future.

Issue Detection Dates

ADWS acknowledges it did not meet the acceptable level of performance of 95% for issue detection dates during the period of April 1, 2022, through March 31, 2023. This is tied to an increase in retirements, relocation, and resignations of more experienced and supervisory staff and the hiring of staff with little or no prior experience in unemployment insurance and/or adjudication processes and practices. Out of seventeen adjudicators currently assigned to the unit, ten have been hired within the past two years. Additionally, two out of four adjudication supervisors were hired within the past two years. Inexperience, coupled with the backlog due to the pandemic and continued higher than average pre-pandemic numbers, has presented significant challenges for ADWS in meeting this performance measure.

ADWS plans to improve the issue detection date measures by providing in-depth and ongoing refresher Benefits, Timeliness and Quality (BTQ) training regarding issue detection dates to all adjudication staff, as well as quarterly refresher material on issue detection dates. The unit will evaluate quarterly BTQ grading results and provide feedback to all adjudication staff on any issue detection date errors each quarter. Adjudication Supervisors will continue to grade random cases for quality and correct issue detection dates and provide corrective action to adjudicators monthly. Additionally, beginning September 2023, each supervisor will begin evaluating additional determinations for each adjudicator monthly, and provide feedback regarding their findings on application of issue detection dates for both separation and non-separation issues. Issue detection dates are also a major component of adjudication staff’s annual performance appraisals. With this internal standard for performance appraisals, it should continue to help increase the accuracy of issue detection dates, along with reminders and training to all adjudication staff, will help ADWS move this performance measure closer to the acceptable level of performance of 95%.

Tiger Teams

Arkansas was unable to participate in the Tiger Team initiatives as funding was withdrawn before the assessment period began. Although Arkansas did show interest in the Tiger Team initiative, we were unable to participate in the time frame given due to competing priorities.

Waiving Recovery of Overpayments

ADWS submitted and received approval for one blanket waiver request for a specific group of claimants, who through no fault of their own received UI benefits incorrectly using UPIL 20-21 Change 1 Attachment II.

We are also utilizing the blank waiver for those claimants that were paid in error using PUA funds but were eligible for the UI program. As the PUA program had a higher weekly benefit amount that the Arkansas UI program, several claimants were overpaid the weekly difference for the life of the claim. These overpayment balances are currently being created and waived by BPC staff. Due to vendor issues, this process is time consuming, but required as part of our CARES act retroactivity to regain DOL compliance.

Coordinating with DOL and OIG

ADWS actively works with OIG on fraud schemes both reporting to OIG when suspicious activity has been identified and receiving information from OIG and identifying in our system claims associated with larger fraud schemes. The working relationship has benefited ADWS by bringing press attention to efforts to criminally prosecute offenders and deter future fraud attempts.

ADWS complies with all OIG requests for information and provides all data to the best of our ability to continue to combat fraud in the UI program.

Workforce Innovation and Opportunity Act (WIOA)

WIOA is designed to provide job seekers with increased access to employment, education, training, and other support services to succeed in the labor market, match employers with the skilled workers they need to compete, improve the coordination of employment and training services and resources, and strengthen collaboration with state and local partners. The State of Arkansas elected to coordinate and integrate as many workforce development programs as possible, and therefore, elected to submit a combined state plan designed to streamline the investments in our workforce development system. The combined plan integrates and streamlines the services provided by program partners: ADWS and its Arkansas Rehabilitation Services and Adult Education Services Divisions, the Division of Services for the Blind, and the Arkansas Department of Human Services. As part of this effort, ADWS hosts biannual statewide partner meetings each spring and fall. These training and strategy sessions included workforce development partners and stakeholders, including employers, economic developers, Workforce Development Board Members, and community college representatives with the goal of developing broader and deeper partnerships, integration of programs and services within their regional area to help prepare Arkansas’ workforce to meet the needs of current and potential employers.

Additionally, our workforce development partners present their programs’ information to the Arkansas Workforce Development Board at their quarterly meetings to increase the level of integration of the state’s workforce program. Moving forward, ADWS plans to continue our efforts in collaborating with private sector employers, non-profit organizations and stakeholders who can assist us in maximizing the full potential of the Arkansas’ workforce system.

To ensure that claimants are aware of the array of services provided through the workforce center, claimants are required to obtain ES services as part of their initial claim filing process. Specific enhancements made by UI include notification to claimants with inactive Arkansas Job Link (AJL) accounts of the requirement that their accounts be activated and current, including a resume. Resumes uploaded to an individual AJL account are then searchable by employers. A current AJL account ensures that claimants have maintained their work registrations and are able to access services offered through the Arkansas Workforce Centers.

UI Technical Assistance Resources

ETA Regional Office

ADWS maintains a close working relationship with our regional partners and has regular meetings to go over concerns and seek additional guidance with reorganization and modernization challenges. This has been especially beneficial as our UI Assistant Director is relatively new to the role and is working to update processes.

Tiger Teams

Arkansas was unable to participate in the Tiger Team initiatives as funding was withdrawn before the assessment period began. Although Arkansas did show interest in the Tiger Team initiative, we were unable to participate in the time frame given due to competing priorities. We are looking forward to researching and better understanding the implantation results fully on the three pillars of the program, Equity and Accessibility, Timeliness and Backlog and Fraud Prevention and Detection. These are issues that every state is dealing with, and the creative answers and guidance of this program is helpful to all states.

UI Integrity Center

ADWS currently utilizes features of the UI Integrity center in behavioral insights, state services, the integrity data hob, national integrity academy, and knowledge exchange library. These tools have been used to train new and existing staff and help staff better identify potentially fraudulent activity. We use the library to research additional ideas on our planed modernization efforts and our plan to continually assess and improve the Arkansas UI processes and systems.

Office of Unemployment Insurance Modernization

We have worked with this office on the implementation of the Login.gov and USPS programs of which Arkansas was the pilot state. These efforts to assist states with modernization projects in a “plug and play” methodology is helpful without a large financial outlay.

UI Information Technology Support Center

The ITSC was utilized when Arkansas was on the road to a vendor-based solution and was helpful in the RFP process. Much of what Arkansas learned in this process assisted ADWS in coming to the decision that an iterative process would work better with our resource limitations and had a higher success rate as a long-term solution.

Prisoner Update Processing System

ADWS sees the value in this system and has applied for access. The process for approval is arduous and requires members form the UI and IT teams and multiple submissions of documents, and approval wait times are still ongoing. Once implemented in Arkansas this will assist in identifying fraudulent claims more quickly for those that are currently incarcerated.

Maintaining Solvency of the State’s Trust Fund

The continued strengthening of Arkansas’ labor market since the pandemic to pre-pandemic levels is reflected in the current LMI data. Arkansas’ Unemployment Insurance program served as an important safety net for thousands of Arkansas families during the pandemic. Unlike the prior recession, the increase in demand for unemployment claims did not exhaust the program’s trust fund. Arkansas did not need the assistance of Title XII Advances to pay UI Benefits. ADWS projects a trust fund balance of $950,000.00 at the end of CY 2023.

During the 2023 Arkansas legislative session, ADWS sought to ease the tax burden on employers by pursuing the following legislation.

• ACT 106 (HB 1197) Failure to appear for Job Interviews.
  •   §11-10-515 Creates a benefit disqualification for failing without good cause and without notice to attend two scheduled job interviews with the same employer. To satisfy the disqualification, a claimant will be required to have thirty (30) days of covered employment. Effective date January 1, 2024.
  •   This creates an additional measure of security to ensure that claimants receiving benefits are in fact eligible and looking for work.
  • Act 196 (HB 1430) Taxable Wage Base, Max UI Benefit Duration, New Employer Tax, Administrative Assessments, Deficit Rated Employer Tax
    •   §11-10-215 Sets the taxable wage base at $7,000 when the UI Trust Fund is in excess of $600,000,000 as of June 30 of the most recently completed state fiscal year and limits increases to the taxable wage base to $2,000 each year. Effective January 1, 2024.
    •   §11-10-504 Reduces the maximum weekly UI benefit duration from sixteen to twelve weeks. Effective for initial claims filed on or after January 1, 2024.
    • §11-10-704 Reduces the new employer tax rate from 2.9% of the taxable wage base to 1.9%. Effective January 1, 2024.
    •   §11-10-705 Recharacterizes stabilization as an administrative assessment set at 0.125% of the taxable wage base for the period of July 1, 2023, through June 30, 2024, and at 0.1% of the taxable wage base thereafter. Provides that for each fiscal year, 60% of the administrative assessment collections (limited to $6,000,000) shall be deposited into the DWS Unemployment Insurance Administration Fund for personal services and operating expenses.
    •   Requires portions of the administrative assessment collected through June 30, 2024, to be set aside for modernizing UI information technology systems and hardware.
    •   Allows up to $2,500,000 per fiscal year to be deposited into the DWS Training Trust fund should collections be sufficient (after funding administration and modernization) and for any other remaining administrative assessment collections for the fiscal year to be deposited into the Unemployment Compensation Fund.
    •   Eliminates the 12% and 14% tax rates for deficit rated employers. Effective January 1, 2024.
  • ACT 587 (HB 1575) Work Search Requirements.
    •   §11-10-507 Provides that, unless excused from work search, a claimant shall be ineligible for UI benefits for any week during which five (5) work search contacts are not made. Effective date January 1, 2024.
    •   Requires DWS to audit at least one hundred (100) work search reports each week. Effective date January 1, 2024.
• ACT 854 (HB 1840) Fraud Penalty

•   §11-10-519 Provides that UI fraud overpayments of $1,000 or more require a disqualification period of ten (10) years. Effective date October 1, 2023. Requires DWS to audit at least one hundred (100) work search reports each week. Effective date January 1, 2024.

ADWS matches claims with the state payroll system, AASIS, to detect improper payments to state employees as quickly as possible. The crossmatch returns weekly earnings for the match weeks, eliminating the need to send wage audit requests to individual agencies.

In March 2022 ADWS was the pilot UI program to verify identity electronically using Login.gov. This system uses one account for secure, private access to participating government agencies with multifactor authentication and is currently in the process of being implemented in other state agencies. The success of this pilot led to a stronger working relationship with ADWS and DOL, continuing into the USPS pilot program that allows, claimants to verify their identity be receiving a bar code, that is then proved to any of the 200+ USPS locations who can then visually verify that the individual proving the bar code is in fact the individual on the identification, and includes the address information provided on the application for benefits.

ADWS strongly believes that in person verification is the most secure, and partnering with DOL and the USPS allows that level of security while reducing the travel needs for claimants.

Assurances

By signing the SQSP Signature Page, ADWS certifies that it will comply with the assurances listed in Handbook 336, 18th Edition. ADWS will institute any plans or measures necessary to comply with the requirements.

Additionally, UIPL 25-21 requires information for Assurance “H”, “Assurance of Contingency Planning”; and Assurance “J”, “Assurance of Automated Information Systems Security.

H. Assurance of Contingency Planning:

• Date IT Contingency Plan Implemented: 2004
• IT Contingency Plan Reviewed/Updated: Biannual
• IT Contingency Plan Tested: Scheduled for April 2024

J. Assurance of Automated System Security

• Date Risk Assessment Conducted: April 2024
• System Security Plan Reviewed/Updated: Biannual
• System Security Plan implemented: 2004

Assurance of Disaster Unemployment Assistance (DUA)

• DUA training was last completed in April 2023 and will be completed each year.
• The Standard Operating Procedures for the DUA program are included in the DUA handbook made available to staff.