Report 2013-102 Recommendation 1 Responses

Report 2013-102: Employment Development Department: It Needs to Address Data Issues to Better Evaluate and Improve the Performance of Its Employment Programs for Veterans (Release Date: October 2013)

Recommendation #1 To: Employment Development Department

To improve the quality of the performance reporting it submits to Labor, the department should work with Labor to develop reasonable controls to avoid reporting overstated and inaccurate performance measures.

Annual Follow-Up Agency Response From October 2015

The EDD exercised due diligence by collaborating with the Department of Labor (DOL) on how to further improve the quality of performance data submitted to DOL. On September 22, 2015, DOL provided correspondence (Attachment 1) which supports that DOL is satisfied with EDD's efforts to ensure quality data is submitted. The following examples and corresponding evidence demonstrate EDD's collaboration with DOL to improve the quality of data transmitted to DOL:

-On May 5, 2014, EDD launched the upgrade of the California Job Opening Browse System (CalJOBSSM). This system upgrade includes a single-client record that significantly decreases the chance of overstated or inaccurate performance data being reported to DOL. To further support this system upgrade, we have included an excerpt from reference materials developed by our vendor, Geograhic Solution, Inc., which discusses the single-client record (Attachment 2). This document also provides information on how CalJOBSSM complies with applicable federal reporting.

-On June 19, 2013, at the request of DOL, EDD reprogrammed CalJOBSSM to automatically convert wages at or over $1,000,000 to $999,999 for both pre- and post-program wages. This change was necessary as DOL's Enterprise Reporting and Validation System is not capable of capturing wages of $1,000,000 or greater for a given quarter. The EDD's system modification allows DOL to receive wage data that more accurately reflects California's quarterly wages, as previously these wage records were rejected by DOL's data system. Although this change was made to accommodate DOL's Enterprise Reporting and Validation System, EDD continues to maintain the data which reflects the actual amount reported by the employer.

In addition, performance data is reviewed for accuracy and run through a number of edit checks before being transmitted to DOL. Anomalies identified through this process are researched and resolved prior to transmitting these data reports to DOL.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

As noted above, the Employment Development Department (EDD) performed a significant system upgrade subsequent to our audit. Further, the United States Department of Labor (Labor) stated that it was satisfied with EDD's efforts to ensure quality data. We remain concerned that the issues we identified in our audit related to the quality of Social Security data in EDD's "Base Wage File" erode the integrity of the data EDD sends to Labor; we noted in the report that Labor requires states to review data and without such monitoring, the data is eroded. Nevertheless, we recognize that legislation to give EDD more power to investigate Social Security number discrepancies in its Base Wage File did not pass, and we recognize that the Labor, the federal agency that sets policy for collecting and reporting this data, is satisfied with EDD's efforts. We consider this recommendation fully implemented, but suggest EDD continue to take advantage of any opportunities to further improve the quality of its data, including seeking any legislative changes it would require to do so.

1-Year Agency Response

With the launch of the upgraded California Job Opening Browse System (CalJOBSSM) on May 5, 2014, the system now includes a single client record that significantly decreases the chance of overstated or inaccurate performance data being reported to the United States Department of Labor (DOL). As noted in the Employment Development Department's (EDD) October 9, 2013, response to the audit, the EDD has been and will continue to work with the DOL to implement any additional guidance or controls it prescribes to avoid overstated or inaccurate performance data. On June 17, 2013, the DOL requested that the EDD re-program CalJOBSSM to automatically take any wages over $1,000,000 and convert them to $999,999 for both pre-program and post-program wages to meet their Enterprise Reporting and Validation System reporting specifications. This request was implemented in CalJOBSSM effective June 19, 2013. The EDD has implemented all other requirements set forth by the DOL related to performance reporting. The EDD requests that this recommendation be closed.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

On page 20 of the audit report, we state that DOL requires states to perform due dilligence for accuracy and data integrity when using wage data for performance measurement. Our report identified weaknesses in EDD's wage data and recommended that EDD seek guidance from DOL regarding how to improve the quality of its data. EDD has not provided any evidence that it has attempted to work with DOL on this issue.

6-Month Agency Response

On May 5, 2014, WSB will launch the final phase of the new CalJOBSSM system. It will provide a single client record that will decrease the chance of overstated and inaccurate performance measures and give EDD the most accurate data that are under the control of the Department. As noted in its October 9, 2013, response to the audit, EDD has been working with and will continue to work with the U.S. Department of Labor, Employment and Training Administration, and implement any additional guidance/control set forth to avoid overstated and inaccurate performance measures. On June 17, 2013, the U.S. Department of Labor set forth guidance requesting that EDD re-program CalJOBSSM to automatically take any individual quarterly wages over $1,000,000 and convert them to $999,999 for both pre-program wages and post-program wages to meet their Enterprise Data Reporting and Validation System (e-DRVS) system reporting specifications. This was implemented effective June 19, 2013, in the CalJOBSSM system.

California State Auditor's Assessment of 6-Month Status: Pending

As noted in its response, EDD expects to implement its new system on June 30, 2014.

60-Day Agency Response

As noted in the October 9, 2013 response to the audit, the EDD has been and will continue to work with the U.S. Department of Labor; Employment and Training Administration and implement any additional guidance/control set forth to avoid overstated and inaccurate performance measures.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2013-102

Agency responses received are posted verbatim.