Unemployment Insurance: States' Customer Service Challenges and DOL's Related Assistance
Published: 2016-05-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: UI benefits are a critical source of income for millions of unemployed Americans. Overseen federally by DOL and administered by states, the UI program requested $32.5 billion in benefits in fiscal year 2015 for approximately 7 million UI claims. During the 2007-2009 recession, states faced challenges processing record numbers of claims, and questions were raised about the quality of customer service. GAO was asked to review customer service issues in state UI programs.
GAO examined (1) customer service challenges, if any, recent UI claimants have faced and the extent to which states collect information on claimants' challenges, (2) any challenges states have faced providing customer service to claimants, and any improvements they have made, and (3) the extent to which DOL monitors states' customer service efforts and provides assistance to help them make improvements.
GAO surveyed state UI programs in 50 states and the District of Columbia (with 48 responding); interviewed officials from state UI programs and advocacy groups in California, New York, and Texas (selected for geographical diversity and large numbers of UI claims); and conducted six focus groups with recent UI claimants in these three states. Focus group results are not generalizable, but provide important insights into the experiences of some UI claimants. GAO also reviewed relevant federal laws and DOL guidance.
section_title: What GAO Found
paragraphs: In GAO focus groups of recent claimants filing for unemployment insurance (UI) benefits, those who filed by phone reported experiencing various challenges, such as long call wait times; however, those filing for benefits online reported that it was generally easy to do. In all six of the focus groups GAO conducted in the three states it visited, individuals who had claimed benefits by phone between July 2014 and July 2015 reported experiencing challenges with the state UI program's customer service. GAO defined customer service as including ease of program access, courtesy, timeliness, and accuracy, as well as responsiveness to customer needs and expectations. Some participants in all six focus groups reported experiencing long call wait times and difficulties using automated phone systems. In addition, in two of the states visited, representatives of advocacy groups reported that special populations, including individuals with limited English proficiency, had difficulty accessing the UI program. In GAO's survey of state UI programs, most states—including those GAO visited— reported collecting some data on customer service challenges for claimants. For example, 38 states reported collecting data on average call wait times.
Many states reported challenges in providing customer service, including staffing issues, and most have taken some steps to improve customer service, such as increasing self-service options. Specifically, more than half the states GAO surveyed reported insufficient staffing, outdated Information Technology (IT) systems, and funding constraints, all of which could play a role in claimant challenges. Many states also reported that they have taken or are planning to take some actions to improve customer service. For example, 45 states reported taking action to provide self-service options, and 42 states reported taking action to provide customer service training to program representatives.
The Department of Labor's (DOL) Employment and Training Administration (ETA) provides states with monitoring and assistance on some aspects of customer service. ETA monitors and measures state performance on the timeliness of benefit payments and appeals decisions. ETA also monitors and measures the accuracy of states' non-monetary eligibility determinations, such as whether states accurately assess reasons for claimants' separation from employment. In addition, ETA provides states with various technical assistance. ETA has provided states with assistance on IT modernization, staffing issues, and program access for special populations. UI program officials in the three states GAO visited said they could benefit from more information on other states' successful customer service practices, including practices for addressing continuing staffing and IT challenges. ETA plans to share these practices on an ongoing basis, officials said. For example, officials said ETA plans to share successful practices—including those related to staffing—obtained from its national study of call center operations through its online community of practice. ETA also plans to continue to collect lessons learned from state IT system modernization efforts and disseminate them to states.
section_title: What GAO Recommends
paragraphs: GAO is not making recommendations in this report.

section_title: Letter
paragraphs: Unemployment insurance (UI) benefits serve as a critical source of  income for millions of unemployed Americans. The UI program is a  federal-state partnership established by the Social Security Act in 1935 to  provide temporary financial assistance to those who become unemployed  through no fault of their own and to help stabilize the economy during  recessions. According to officials from the Department of Labor (DOL), in  fiscal year 2015 the agency requested $32.5 billion in benefits for 6.7  million UI claims. The UI program is administered by the states, and  DOL’s Employment and Training Administration (ETA) oversees states’  compliance with broad federal requirements, which include that states  must have methods of administration that ensure full payment of  unemployment benefits when due.
During the recession that began in 2007, state UI programs faced  challenges processing record numbers of claims, and questions were  raised about the quality of customer service provided to claimants. At the  peak of the recession in calendar year 2009, according to DOL, states  processed over 17.5 million new initial UI claims. By calendar year 2015,  the number of these claims had dropped to approximately 9.2 million. You  asked us to review customer service challenges faced by UI claimants  and state UI programs.
This report examines (1) the customer service challenges, if any, recent  UI claimants have faced and the extent to which states collect information  on claimants’ challenges, (2) any challenges states have faced in  providing customer service to UI claimants, and any improvements they  have made, and (3) the extent to which DOL monitors states’ customer  service efforts and provides assistance to help them make improvements.  For the purposes of our study, we defined customer service as the  service that state UI programs provide to claimants, including those who  are eligible and those who are ineligible for benefits. This includes, but is  not limited to, ease of program access, courtesy, timeliness, and  accuracy, as well as responsiveness to customer needs and  expectations.
To examine the customer service challenges recent UI claimants have  faced, we conducted six focus groups with UI claimants in California, New  York, and Texas who applied for UI benefits between July 2014 and July  2015, using a contractor to recruit and screen participants. We selected  this time period to identify participants who had applied for benefits within  the 12 months preceding the award of the contract. Focus groups were  held in September 2015. We also conducted site visits in these states,  which were selected for their geographic diversity and size based on the  number of new initial UI claims in calendar year 2014, the most recent  year for which data were available. We asked focus group participants  about their experiences with customer service in their state UI programs,  including any challenges they faced. Focus group results are not  generalizable within states or nationwide, however, they provide  important insights into the experiences of some UI claimants. We also  identified and interviewed representatives of advocacy groups in our site  visit states to discuss their views on the challenges experienced by UI  claimants in those states. In part, we selected these groups to provide  perspectives on the challenges faced by claimants with limited English  proficiency and claimants with disabilities who were not specifically  selected for our focus groups.  The opinions expressed by these groups  represent their points of view, and may not represent the views of all  advocacy groups or the customer service experiences of all claimants  with limited English proficiency and claimants with disabilities.
To address all three objectives, we conducted a web-based survey of UI  programs in all 50 states and the District of Columbia about the customer  service data they collect, the customer service challenges they have  faced, practices they have implemented to improve customer service, and  customer service assistance they have received from DOL. A total of 48  states responded to our survey, representing a 94 percent response rate.  In our site visits to California, New York, and Texas, we interviewed UI  program officials about their approach to customer service, any customer  service challenges they have faced, and practices they have implemented  to improve customer service.  We also interviewed various stakeholders,  including national associations and officials from DOL, about their role in  monitoring and helping to improve customer service in state UI programs.  In addition, we reviewed relevant federal laws, regulations, and guidance.  We did not assess state compliance with statutory and regulatory  program access and nondiscrimination requirements. (For more  information on our objectives, scope, and methodology, please see  appendix I.)
We conducted this performance audit from November 2014 to May 2016  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: UI Program Administration and Oversight
paragraphs: As a federal-state partnership, the framework for the UI program is  established by federal law, which sets broad requirements that state  programs must follow, including categories of workers that must be  covered by the program. While states design and administer their own  programs, DOL’s Employment and Training Administration (ETA) is  responsible for ensuring that state UI laws conform to, and state program  operations comply with, federal law. For example, as required by the  Social Security Act, ETA is to ensure state laws include provisions that  allow for full payment of UI benefits when they are due. ETA also sets  overall program policy, monitors state performance, and provides states  with technical assistance. For example, ETA sets acceptable levels of  performance and monitors states on measures related to benefits,  program integrity, appeals, tax, and reemployment (see appendix II). ETA  oversees state UI programs through its Office of Unemployment  Insurance (OUI) and its six regional offices. The regional offices are the  states’ main points of contact with DOL and serve as a link between the  department and the states for providing technical assistance and  clarifying program policies, objectives, and priorities.
section_title: State UI Programs, Claims Processes, and Benefits
paragraphs: While federal law sets forth broad provisions for the categories of workers  that must be covered by the program, some benefit provisions, and  certain administrative requirements, the specifics of regular UI benefits  are determined by each state and the District of Columbia. This results in  essentially 51 different programs. States administer their own programs  and have considerable flexibility to set benefit amounts and their duration,  and establish eligibility requirements and other program details. States  are also responsible for customer service in their UI programs. For a  general overview of the process for filing UI claims, see fig. 1.
Typically, eligible unemployed workers can receive UI benefits for up to  26 weeks in most states. In addition to state UI benefits, the Federal- State Extended Benefit Program provides additional weeks of benefits  during high and rising unemployment.
section_title: UI Program Funding
paragraphs: UI programs are generally funded by federal and state payroll taxes  levied on employers. State benefits for unemployed workers are primarily  financed by state employer payroll taxes and are placed in a trust fund  that the federal government maintains on behalf of states. Ideally, states  build reserves in their trust fund accounts through revenue from employer  taxes during periods of economic expansion in order to pay UI benefits  during economic downturns. Federal taxes paid by employers are used to  fund the costs of administering UI programs in all states, among other  purposes.
As part of the President’s Budget, DOL uses a combination of national  claims-related workload projections and other factors to develop the  request for UI administrative funding for states. After Congress  appropriates funds, DOL uses a formula to allocate the funding to states  and considers state workloads estimates, as well as other information  provided by states, such as cost accounting information. Since funding is  calculated in part based on claims-related workloads, the federal funding  available to states is generally sensitive to changes in total claims, with  more funding available when claims increase and less when they  decrease. States may also receive additional federal administrative  funding above base levels on a quarterly basis when claims-related  workloads exceed base funding levels. ETA may also award  supplemental funds to states for special UI projects, such as supporting  state efforts to reduce improper payments. In addition, states may provide  additional state funding for the administration of their UI programs.
section_title: UI Information Technology Modernization
paragraphs: State UI programs rely extensively on Information Technology (IT)  systems to carry out their UI program functions. Specifically, IT systems  are used to administer the programs and to support related administrative  needs. For example, these systems are used to support benefit eligibility  determinations, record claimant filing information, and calculate benefit  amounts.
The majority of the states’ existing systems for UI operations were,  however, developed in the 1970s and 1980s, and we previously reported  that states face challenges modernizing these legacy systems to operate  more efficiently. These challenges included limited staff with the  technical and project management expertise to manage system  modernization efforts, limited funding for modernization efforts, and  limited resources for operating legacy systems while implementing  modernized systems.
section_title: Customer Service Practices and Standards
paragraphs: In recognition of the importance of service delivery in effective  governance, in April 2011 the White House issued Executive Order  13571—Streamlining Service Delivery and Improving Customer Service— which required federal agencies to, among other things, work with the  Office of Management and Budget (OMB) to develop a customer service  plan for federally-administered programs, establish mechanisms to solicit  customer feedback, and improve customer service by adopting best  practices. Agencies’ plans were required to address approximately three  to five of their highest volume services. In response, DOL developed a  customer service plan which includes workers in federal contracting,  worker safety and health, and worker rights; however, it does not cover  the UI program because it is administered by states. According to DOL  officials, while agencies were not required to update their plans and DOL  has not done so, a committee report accompanying the Consolidated  Appropriations Act, 2016, directed OMB to report in March 2016 on  agencies’ progress in developing customer service standards and  incorporating them into their performance plans.
In a 2010 report on federal agency customer service standards, we  identified several examples of quality customer service, including  understanding customers’ needs and organizing services around those  needs, offering self-service options, and providing citizens with the  information necessary to hold government accountable for customer  service performance. In 2014, we reviewed customer service standards  for federally-administered programs at five federal agencies and found  that none of the agencies’ standards included all the key elements of  customer service standards, such as performance targets or goals and  performance measures.
section_title: Claimants Faced Challenges Filing Claims by Phone and Accessing Services in Other Languages, and Most States Collect Some Information on Claimant Challenges
subsections: section_title: Claimants in Our Focus Groups Reported Experiencing Long Call Wait Times and Difficulty Using Automated Phone Systems
paragraphs: Claimant Quote   “It’s pretty much been the same, the same  problems as in 2009 when I first applied,  specifically, the wait times, trying to get a hold  of someone taking so long. I usually am on  the phone for 20, 30 minutes, get frustrated,  hang up, call back another day.”
Claimant Quote   “So then I call them on Monday, but I can’t get  through until Wednesday or Thursday or  Friday or sometimes the whole week.” sometimes over days or weeks—before reaching a representative, or said  it took several days for a representative to call them back or respond to  their email messages. For example, claimants told us that when they  missed a call from a representative, it was difficult to reach them to return  the call. One claimant reported making 15 attempts to leave a message  because a representative’s voice mailbox was full.
Claimant Quote   “So you’ve already got three prompts before  you even get to one that will allow you to ask  questions. And then that prompt has two or  three prompts. So you probably go through six  before you get to a line that says we have a  heavy volume and we can’t service you now  and click.”
In all six focus groups, claimants told us they had difficulty using  automated phone systems, and in five groups, claimants said they were  unable to reach program representatives by phone. Claimants said they  had difficulty using automated phone systems because phone menus  were long and complex, involving numerous steps, or because it was  easy to make mistakes and difficult to fix them. For example, claimants  told us that if they selected the wrong option from the menu, they were  forced to start over. One claimant said it took 40 minutes to file a claim  after accidentally pressing the wrong button. In other examples, claimants  told us they had to hang up—or the system ended the call—after they  reached a “dead end” and were unable to return to the previous menu. In  addition, in five groups, claimants told us they were unable to reach  program representatives by phone. For example, claimants said that  when they called to file a claim, they received a message indicating that  the phone system was at full capacity and could not accept additional  calls.
Claimant Quote   “I haven’t actually had anyone that has been  mean. I have spoken to people that were  stressed and overworked, but for the most  part they were as helpful and kind as they  could be under the circumstances that they  had to work with. Especially when I was falling  apart.”
Claimant Quote   “I would say maybe 70 percent of the time it’s  somebody that is new and I feel like I am  educating them.” one claimant said a representative gave helpful advice about the best day  of the week to file a claim. However, other claimants said representatives  seemed to lack knowledge or training, or that different representatives  provided conflicting information. Also, in four of six groups, some  claimants said representatives were courteous, while others said they  were not.
Claimant Quote   “I felt like it was easy. I just found the website  and put in pretty basic stuff and it pulled up all  my employers that I have had and the  earnings and everything was already in there- -I didn’t have to enter any of that. They  already knew. And then I got the stuff in the  mail a few weeks later, pretty quick.”
In contrast, in all six focus groups, claimants who filed their claims online  said it was generally easy to do so, though they occasionally experienced  system disruptions. For example, claimants described the Internet filing  process as “quick,” “user-friendly,” and “convenient,” and said they found  certain features helpful, such as the ability to view their past and future  benefit payments and print out information about their claims. In addition,  claimants said they preferred filing online to filing by phone because it  was faster, or because they were less likely to make mistakes. Less  frequently, claimants in five groups told us that they experienced  challenges filing online. For example, claimants said that some state UI  program websites only accepted claims during business hours or were  temporarily unavailable due to system outages.
Claimant Quote   “The online works well. The amount of  information, if you actually spend the time to  look through all of the information, it answers  many more questions than they would have  time for on the phone.”
In all six focus groups, claimants had mixed opinions about the sufficiency  of the information provided by their state UI programs. For example, in all  six groups, some claimants reported that the state UI program website or  written program materials provided answers to their questions—such as  next steps in the application process, or the amount of their benefit  payment and when they could expect to receive it. However, others  reported that the UI program website or written materials did not answer  their questions—such as how to calculate their quarterly wages, or what  activities qualify as “work.” In five of six groups, claimants reported that  these sources did not provide answers to questions about their unique or  complex situations, such as how medical leave or severance pay affected  their claims, or how to report income from multiple jobs.
section_title: Advocates Reported Individuals with Limited English Proficiency and Other Special Populations Have Had Difficulty Accessing the Program
paragraphs: In addition to the challenges reported by recent UI claimants, advocacy  groups told us that claimants with limited English proficiency have  experienced challenges accessing translated materials and program  representatives who speak their language when filing claims. For  example, in one state, advocates told us that program materials are  available in a limited number of languages, despite the many languages  spoken in the state. In addition, advocates in two states said that program  representatives speak a limited variety of languages, which can make it  difficult for claimants to provide additional information after they file  claims. Advocates noted that these challenges can be particularly  difficult for claimants who speak languages that are less common in their  states. For example, in one state, advocates said that an Arabic-speaking  claimant did not receive benefits for over 3 months because of delays he  experienced in receiving translated application materials and receiving an  interpreter for his appeal hearing.
In addition, advocacy groups in two states told us that the quality of  translated materials—as well as the quality of interpretation—is  sometimes poor, which can contribute to benefit delays or result in  erroneous determinations that claimants are not eligible for benefits. For  example, advocates in one state said that program representatives have  sometimes incorrectly translated the reason for a claimant’s separation  from employment, which has resulted in claimants being deemed  ineligible for benefits. Furthermore, advocates in two states noted that  when claimants with limited English proficiency appeal these eligibility  determinations, the interpretation provided at the hearings is sometimes  of poor quality, and that it is sometimes difficult to even find an interpreter.
In addition to language challenges, advocacy groups in two states told us  that special populations of claimants, such as individuals with limited  English proficiency and individuals with disabilities, also face challenges  filing claims over the Internet or by phone because it can be difficult for  them to communicate without face-to-face contact. Given these  challenges, advocates said it is important for state UI programs to ensure  that these special populations and individuals without access to  computers or phones are able to file claims and ask questions in person.  In our survey, most states reported that they have taken various steps to  make their UI programs accessible to special populations, for example, by  offering assistance in languages other than English and by making their  websites accessible for individuals with disabilities.
section_title: Most States Reported Collecting Some Information on Customer Service Challenges Experienced by Claimants
paragraphs: Most states collect some data on the extent to which UI claimants  experience customer service challenges when filing claims by phone and  over the Internet. In our survey of state UI programs, 39 of the 43 states  that allow unemployed workers to file for UI benefits by phone (91  percent) reported that they collect some related customer service  information, such as whether claimants are able to reach program  representatives by phone in order to file claims or ask questions. For  example, 38 states (88 percent)—including the three we visited—reported  collecting data on the total number of calls answered by program  representatives and average call wait times. In addition, 26 states (60  percent)—including two of the states we visited—reported collecting data  on the number or percentage of calls dropped by automated phone  systems (see table 1). As noted above, long call wait times, difficulties  reaching program representatives by phone, and difficulties using  automated phone systems were cited as challenges by claimants in most  of our focus groups. Furthermore, of the 48 states that allow unemployed  workers to file claims over the Internet, 39 (81 percent) collect customer  service data for these claims. Over two-fifths of states (21 states, or 44  percent) reported monitoring how often claimants are unable to complete  filings due to system disruptions, such as website timeouts or crashes,  and over half (28 states, or 58 percent) conduct usability testing for their  UI program websites.
While some states reported using this data to make changes to customer  service, officials in two states we visited said that funding constraints may  make it challenging to implement these changes. In our survey, 28 of the  43 states that allow claims to be filed by phone (65 percent) reported that  they have used data on these claims to make changes to customer  service for UI claimants. For example, officials in one state we visited said  that they use the data to adjust the number of program representatives  available to answer calls and to forecast future claim volumes.
In addition, 32 of the 48 states that responded to our survey (67 percent)  reported collecting feedback directly from claimants. The two most  commonly reported methods for soliciting feedback, according to the  states we surveyed, was through surveys and the UI program website.  For example, program officials in one state we visited told us they  conduct annual and ad hoc surveys of claimants to assess their  experiences in filing claims. Officials we met with in another state told us  that while they do not collect systematic feedback from claimants, they do  solicit informal feedback via social media and their website.
section_title: Many States Reported Facing Challenges, and Most Have Taken Some Steps to Improve Customer Service, Such as Increasing Self-Service
paragraphs: States responding to our survey reported facing various customer service  challenges—such as staffing, outdated IT systems, funding constraints — which may help explain some of the challenges reported by claimants in  our focus groups. While these issues were reported by many states, they  were generally reported by fewer states during the last 12 months than  during the recent recession.
subsections: section_title: Many States Reported Facing Challenges Related to Staffing, Outdated IT Systems, and Funding Constraints
subsections: section_title: Staffing Challenges
paragraphs: Although 43 states reported that claims can be filed by phone, 4 of these states did not  respond to questions about phone-related challenges in our survey.
48) cited staff turnover as a challenge to at least a moderate extent during  the last 12 months—compared to the 27 states (56 percent) that reported  facing similar challenges during the recession. Staff retention may reflect  the complexity of the job, which was noted by UI officials in two states we  visited. Also, 12 of 48 states (25 percent) reported staff training and  expertise as a challenge to at least a moderate extent in the last 12  months, as compared to 28 states (58 percent) during the recession.  While fewer states reported that staff training was a challenge recently  than during the recession, it remains challenging due to the complexity of  the job and the length of time required to adequately train new hires,  according to officials in two states.
Outdated IT systems are another challenge for many states, according to  our survey. Specifically, 29 of 48 states (60 percent) reported that their  current IT systems have significant limitations. These limitations can  include legacy mainframe technology from the 1970s and 1980s or  outdated programming languages that have implications for state  programs’ ability to efficiently process claims and serve claimants.  Moreover, 26 states (54 percent) reported that their IT systems were a  challenge to a large or moderate extent during the last 12 months,  compared to the 34 states (71 percent) that reported these systems were  a challenge to at least a moderate extent during the recession (see fig. 3).  In the aftermath of the recession, according to state UI program officials,  frequent reprogramming of their IT systems was required, in part, to  reflect changes in a temporary federal UI benefit program. Additionally,  officials in one state we visited explained that their outdated system  continues to present challenges because UI program staff must check  multiple systems for information on claims, which can lead to errors in  processing claims.
Additionally, while several states that responded to our survey reported  that they were planning to modernize their IT systems, officials we spoke  to in all three of our site visit states explained that they faced challenges  in fully modernizing their systems. In our survey, 19 of 48 states (40  percent) reported that they have implemented a modernized IT system.  Of the remaining 29 that had not yet done so, 16 indicated that their state  plans to implement a modernized IT system by 2019. However, officials in  three states we visited identified challenges in implementing fully  modernized systems—primarily, federal administrative funding  constraints. In these states, in the absence of full modernization, officials  told us they responded by making modifications to selected capabilities  within their existing systems or that they were considering adopting  practices from other states that have upgraded their existing systems.
A larger number of states that described their current IT systems as  having significant limitations reported other challenges than did states  with modernized systems. For example, a larger number of states  reporting IT system limitations cited call handling times as a challenge to  at least a moderate extent during the recession than did states with  modernized systems. Officials in one state without a modernized system  told us that because claimants cannot check status updates and other  information online, they must phone the call center, which consumes  significant staff resources for routine requests that a modernized system  could handle easily.
section_title: Challenges Related to Federal Funding Constraints
paragraphs: Federal Legislative Changes to Temporary  Benefits Program   During the recession, federal legislative  changes included relatively frequent changes  to a temporary federal benefits program. In  GAO’s survey, 39 states (81 percent) cited  federal legislative changes as challenges to a  large or moderate extent during the recession.    Comments from State Unemployment  Insurance Program Officials Related to  Federal Legislative Changes:  State A: “…the excessive programming  changes…caused program issues in often  unrelated areas of the system which were  difficult to diagnose (result of a very old and  fragile system). This often exacerbated the  difficulty in meeting service demand and also  created additional frustration (for) both staff  and the public.”  State B: “(the temporary federal UI benefit  program) was constructed… and  administered…in a manner certain to create  challenges for applicants and therefore for  state programs. We never really had problems  with the volume of actual applicants, but  rather with the unnecessary volume of phone  calls and administrative transactions…”  State C: “(the temporary federal UI benefit  program) was difficult to administer due to the  large number of law changes and their  retroactive effective dates.”
Federal funding constraints was one area cited as a challenge to a large  or moderate extent by more states during the last 12 months (28 of 48  states, or 58 percent) than during the recession (24 states, or 50 percent),  as shown in fig. 4. All states rely on federal funding for the  administration of their UI programs, and the total federal funding available  to states has declined to pre-recession levels. Officials in one state we  visited explained that after the recession ended, claim volumes  decreased and, consistent with the funding model DOL uses to allocate  funding to the states, federal administrative funding provided to the state  was reduced. However, according to officials in this state, other aspects  of UI program administration have remained constant or increased, such  as efforts to identify and collect benefit overpayments, which also rely on  federal funding. Moreover, in our survey, half of states said their UI  programs receive no additional state administrative funds (24 states, or  50 percent), and nearly one quarter reported receiving less than 5 percent  of their total administrative funds from their states (11 states, or 23  percent). While officials in all 3 states we visited cited limited federal  administrative funding as a challenge, only one of these states requested  and received additional state administrative funds. Representatives from  an advocacy group we spoke with in that state noted that the additional  funds, which the state used to hire more call center staff, resulted in a  significant reduction in blocked calls.
section_title: Some States Reported Facing Challenges Related to Claims Filed by Phone and Claims Processing Delays
subsections: section_title: Challenges Related to Claims Filed by Phone
paragraphs: Some states reported experiencing challenges related to claims filed by  phone to a large or moderate extent, both during the recession and during  the last 12 months (see fig. 5). According to a DOL regional office  official and officials in one state we visited, challenges related to claims  filed by phone are likely due to staffing issues. For example, if claimants  are unable to reach program representatives by phone within a  reasonable amount of time, it may indicate that the UI program has an  insufficient number of call center staff. Also, 18 of the 39 states (46  percent) who responded in our survey about claims filed by phone  reported that call handling times remain a challenge to at least a  moderate extent. Officials in one state we visited explained that as the  state has made it easier for claimants to manage their own claims, calls to  the state UI program, including claimant calls directed from American Job  Centers, are becoming more complex and may take longer to address.  Officials in that state told us that call handling times remain challenging  because program representatives have to balance the competing goals of  completing calls quickly and meeting customer needs. In addition, 13 of  39 states (33 percent) reported continuing challenges related to calls  abandoned by callers, and 8 of 39 states (21 percent) reported continuing  challenges with calls dropped by the automated phone system, to at least  a moderate extent.
In addition, some states described challenges related to claims  processing delays or backlogs. For example, 16 of 48 states (33 percent)  cited delays or backlogs in claims processing during the last 12 months  as a challenge to a large or moderate extent, while these issues were  challenges for 34 states (71 percent) during the recession. Although claim  volumes have generally declined, since federal administrative funding is  tied, in part, to the volume of claims, some states may face challenges in  this area. In one state we visited, for example, officials said they feel  understaffed despite having a lower workload, particularly when there are  unexpected spikes in claim volumes due to seasonal unemployment  fluctuations or changes in economic conditions, for example.
section_title: Many States Reported Providing or Planning to Provide Self-Service and Other Practices to Ease Customers Claims Filing Experiences
paragraphs: Many states reported that they took or are planning to take some actions  to improve customer service, such as providing self-service options on  state UI program websites and implementing automated telephone  systems (see fig. 6). For example, almost all of the 48 states responding  to our survey reported having provided self-service options on the state  UI program website (94 percent) or implementing an automated  telephone system (88 percent), both of which are designed to allow  claimants to file their own claims with little or no staff assistance. Other  commonly-reported practices included posting “Frequently Asked  Questions” on state UI program websites (94 percent) and providing  customer service training to call center staff (77 percent).
Other practices, though potentially helpful, have not been implemented as  frequently. For example, 22 states reported having implemented virtual  hold or courtesy call back on their phone lines, which allows claimants to  opt out of holding and instead receive a call back, and an additional 9  states said they planned to do so.
Several states have also undertaken efforts to streamline program  processes to improve efficiency. For example, officials in California cross- trained program staff so that all staff could answer incoming calls, and  reduced call center hours from a full business day to a half day. Prior to  this change, some call center staff answered calls while others worked on  eligibility or payment issues throughout the day. As more staff are cross- trained in all functions, their competencies to answer all types of calls are  enhanced, according to officials. Officials told us that these changes  allowed them to answer more calls than with their previous staffing model  in which staff specialized in different tasks. Officials described the  changes as helping to create additional capacity in an environment of  constrained resources. Additionally, in our survey, several states  described efforts to streamline or modify their processes to improve  services.
section_title: DOL Provides States with Monitoring and Assistance on Some Aspects of Customer Service, and Has Taken Steps to Share Successful State Practices
subsections: section_title: DOL’s Monitoring and Assistance Efforts Address Some Aspects of Customer Service
paragraphs: DOL’s ETA monitors states on a range of UI performance measures,  some of which directly address certain aspects of customer service.  Under the federal-state partnership, ETA sets overall program policy and  monitors state performance, and states provide customer service to  claimants. ETA sets acceptable levels of performance and monitors  states on a total of 15 core measures within the following categories: 1)  benefits, 2) program integrity, 3) appeals, 4) tax, and 5) reemployment.  (For a comprehensive list of core performance measures, see appendix  II.) According to ETA officials, while most of these measures indirectly  address customer service issues, four of them directly address certain  aspects of customer service. Specifically, ETA measures the timeliness of  first payments to eligible claimants and of appeals decisions and  assesses the accuracy of two types of non-monetary eligibility  determinations. Officials told us they consider these measures to be  important indicators of customer service (see table 2).
ETA provides states with technical assistance for the UI program overall,  and provides technical assistance on customer service under certain  circumstances. According to ETA officials, ETA’s six regional offices  monitor state performance on a quarterly basis and provide technical  assistance—which may address customer service—if states fail to meet  acceptable levels of performance over a prolonged period of time. For  example, if a state fails to pay benefits to claimants in a timely manner,  ETA officials said they may review the state’s call center operations and  provide related assistance. Officials told us they have also provided  technical assistance when states have faced major customer service  challenges that are not addressed in the performance measures, such as  significant delays in answering calls. In addition, ETA provides ongoing  technical assistance to states on program administration, which has  occasionally addressed customer service issues. For example, officials  said they have developed training, hosted webinars, provided  supplemental funding, and maintained an online community of practice  through which states can share information. According to officials, ETA is  currently piloting an effort to ensure states are routinely assessing  program operations and processes, complying with applicable laws, and  effectively administering their UI programs. As part of this effort, officials  expect that beginning in fiscal year 2017, states will conduct annual self- assessments of their benefit processes—including reviews of their call  center operations and supporting IT infrastructure—and ETA will provide  related assistance, such as sharing best practices for areas in which  states are experiencing challenges.
ETA has also provided states with technical assistance or guidance on IT  modernization, staffing issues, and program access, which were reported  as customer service challenges by states and advocacy groups. ETA  provides states with technical assistance on IT modernization by funding  and overseeing the Information Technology Support Center (ITSC), which  is operated by the National Association of State Workforce Agencies  (NASWA). For example, in March 2015, ETA and ITSC issued a  checklist to help states prepare to launch modernized UI IT systems.  ITSC has also developed a comprehensive guide for UI IT modernization  projects, among other resources. In addition, ETA has provided states  with supplemental funding to establish consortia in which states work  together to develop and share a common, modernized IT system. With  respect to staffing issues, ETA officials said they have provided technical  assistance under certain circumstances, such as when states have been  unable to adequately staff their call centers due to high volumes of claims  during the recent recession or the implementation of modernized IT  systems. Regarding program access, in October 2015, ETA issued  guidance directing states to ensure that all individuals—including  individuals with limited English proficiency, individuals with disabilities,  and older individuals—can effectively access the UI program.
section_title: Several States Reported They Could Benefit From More Information on Other States’ Successful Practices, and ETA Plans to Share Such Practices on an Ongoing Basis
paragraphs: Officials in all three states we visited told us that they have consulted with  other states to learn from their experiences administering the UI program.  For example, officials said they have consulted with other states about  process improvements and online chat capabilities, among other issues.  In two states, officials told us that they have contacted other states  directly because they have sometimes been unable to obtain timely  responses to questions posted on ETA’s online community of practice.  In one of these states, officials explained that it can be challenging for  staff to monitor the online community of practice on a regular basis and  respond to other states’ requests for information in a timely manner. In a  third state, officials said that they have contacted other states directly  because officials are more willing to openly share challenges and lessons  learned in private discussions. In addition, officials told us that NASWA  has helped them gather information about other states’ UI programs.  For example, officials in one state said NASWA helped them survey all  states about their claims workloads and staffing, among other issues,  which helped them determine that they have more claims per staff  member than other states.
While states are sharing some information, officials in all three states said  their UI programs could benefit from more information about other states’  successful customer service practices. For example, officials in all three  states said it would be helpful to have more information—beyond ETA’s  recent guidance—on successful practices for serving special populations,  such as limited English proficiency claimants and those with disabilities.  In particular, officials in all three states said that their programs could  benefit from more information about other states’ successful practices for  addressing ongoing challenges, such as insufficient staffing and IT  limitations for states that have been unable to implement fully modernized  systems.
ETA has taken some steps to help states share successful customer  service practices, and plans to continue to help states do so—including  those that the states we visited said would be helpful. According to ETA  officials, one of ITSC’s core activities is to collect lessons learned from  state IT modernization efforts and disseminate them to states, including  successful practices for partial modernization when states are unable to  fully modernize their systems. In addition, ETA regional offices have  helped states share successful customer service practices through  ongoing technical assistance, including periodic conference calls and  conferences, and by connecting states facing challenges with other states  that have successfully addressed similar challenges. Furthermore, ETA is  currently in the process of conducting a national study of UI call center  operations which officials expect will identify best practices on a range of  issues, including staffing. Officials also expect that ETA’s efforts to  comprehensively assess state UI program operations and processes will  identify best practices in a range of areas related to customer service,  such as call center operations, IT infrastructure, and program access.
When these efforts are completed, ETA plans to share the best practices  it identifies with all states it its online community of practice.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Labor for review  and comment. The agency provided technical comments, which we  incorporated where appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretary of Labor,  appropriate congressional committees, and other interested parties. In  addition, the report will be available at no charge on the GAO website at  http://www.gao.gov. Please contact me on (202) 512-7215 or at  brownbarnesc@gao.govif you or your staff have any questions about this  report. Contact points for our Offices of Congressional Relations and  Public Affairs may be found of the last page of this report. Key  contributors to this report are listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: We examined (1) the customer service challenges, if any, recent  Unemployment Insurance (UI) claimants have faced, and the extent to  which states collect information on claimants’ challenges, (2) any  challenges states have faced in providing customer service to UI  claimants, and any improvements they have made, and (3) the extent to  which Department of Labor (DOL) monitors states’ customer service  efforts and provides assistance to help them make improvements.
To address our objectives, we reviewed relevant federal laws,  regulations, and guidance; conducted a survey of state unemployment  insurance (UI) programs; interviewed DOL and state UI programs  officials; conducted site visits to 3 states; and held 6 focus groups with  recent UI claimants in all 3 site visit states. We also interviewed various  stakeholders, including representatives of national associations and  advocacy groups that represent UI claimants.
We conducted this performance audit from November 2014 to May 2016  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Survey of State UI Programs
paragraphs: To address all three objectives, we conducted a web-based survey of UI  programs in all 50 states and the District of Columbia. The survey  included questions about available methods for filing UI claims in each  state, the status of information technology (IT) systems modernization in  each state, the data states collect related to customer service, the  challenges that states have experienced with respect to UI claims during  the recent recession and during the previous 12 months, the practices  that states have implemented to improve customer service, and the views  of state UI officials about the assistance that DOL has provided related to  customer service. We received responses from 48 states, for a response  rate of 94 percent.
To minimize errors arising from differences in how questions might be  interpreted and to reduce variability in responses that should be  qualitatively the same, we conducted pretests with five state UI programs.  To ensure that we obtained a variety of perspectives on our survey, we  selected states with diversity on the following criteria: 1) Employment and  Training Administration (ETA) region, 2) average unemployment rate, 3)  UI claims volume, and 4) the status of IT modernization. In addition, we  considered whether the state had been identified as employing certain  practices related to customer service, such as conducting surveys of  claimants. Based on feedback from these pretests, we revised the  questionnaire in order to improve the clarity of the questions. An  independent survey specialist within GAO also reviewed a draft of the  questionnaire prior to its administration.
After completing the pretests, we administered the survey. On June 25,  2015, we sent an e-mail announcement of the questionnaire to state UI  directors, notifying them that our online questionnaire was available for  them to complete, and provided them with unique passwords and user  names. To encourage state UI programs to respond, we followed up with  non-respondents by phone and email through October 6, 2015. We also  followed up by email with state UI directors to clarify their survey  responses. We collected responses through February 2016.
section_title: Analysis of Survey Responses and Data Quality
paragraphs: We used standard descriptive statistics to analyze responses to the  questionnaire. Because we surveyed all states, the survey did not involve  sampling errors. To minimize non-sampling errors, and to enhance data  quality, we employed recognized survey design practices in the  development of the questionnaire and in the collection, processing, and  analysis of the survey data. For instance, as previously mentioned, we  pretested the questionnaire with state UI programs to minimize errors  arising from differences in how questions might be interpreted and to  reduce variability in responses that should be qualitatively the same. We  further reviewed the survey to ensure the ordering of survey sections was  appropriate and that the questions within each section were clearly stated  and easy to comprehend. To reduce nonresponse, another source of  non-sampling error, we followed up by email with states that had not  responded to the survey to encourage them to complete it. In reviewing  the survey data, we performed automated checks to identify inappropriate  answers. We further reviewed the data for missing or ambiguous  responses and followed up with states when necessary to clarify their  responses. On the basis of our application of recognized survey design  practices and follow-up procedures, we determined that the data were of  sufficient quality for our purposes.
section_title: Site Visits and Focus Groups
paragraphs: Concurrently with our survey, we conducted site visits to three states:  California, New York, and Texas. We selected these states because they  had the largest number of new UI claims in their respective regions in  calendar year 2014, which was the last year for which data were  available. We also selected these states because they are located in  geographically diverse ETA regions. In each state, we interviewed state  UI program officials, as well as officials at two ETA regional offices and  organizations that advocate for UI claimants. The results from our  interviews with state UI programs and ETA regional offices are not  generalizable. In all three states, we conducted focus groups with recent  UI claimants (see additional discussion below). We also identified and  interviewed representatives of advocacy groups that represent UI  claimants in our site visit locations. In part, we selected these groups to  provide perspectives on the challenges faced by claimants with limited  English proficiency and claimants with disabilities, who were not  represented in our focus groups. The opinions expressed by these groups  represent their points of view, and may not represent the views of all  advocacy groups or the customer service experiences of all claimants  with limited English proficiency and claimants with disabilities.
In our interviews with state UI program officials, we asked about the data  collected by the program, such as call handling times, and the ways the  data are used; the extent to which and how the state UI program collected  feedback from claimants; customer service challenges experienced by  the state UI program; and practices to improve customer service. In our  interviews with ETA regional offices, we asked about federal monitoring  and technical assistance efforts and the extent to which they relate to  customer service. In our interviews with advocacy organizations, we  asked about the customer service challenges faced by state UI programs  and by claimants, communications with claimants, access for special  populations of claimants, ways in which the state UI program is currently  working well, and state practices to improve customer service.
To learn about recent UI claimants’ challenges related to customer  service, we conducted 6 focus group sessions with a total of 58 claimants  at 3 locations, using a contractor to recruit and screen participants and  record and transcribe the sessions. In order to recruit focus group  participants, we provided participant selection criteria to the contractor.  Specifically, we stipulated that potential participants be 21 years of age or  older, speak English, have personally applied for UI benefits within the 12  months preceding the time the contract was awarded, or from July 2014  to July 2015, and be able to provide written verification that they applied  for UI benefits in their states. The contractor then contacted and screened  potential participants from its database, and over-recruited a total of 15- 20 individuals for each session as necessary to ensure that 8-10 eligible  individuals participated. We conducted these focus groups in September  2015. These sessions involved structured small-group discussions  designed to gain more in-depth information about specific issues that  could not easily be obtained from another method, such as a survey or  individual interviews. Consistent with typical focus group methodologies,  our design included multiple groups with varying characteristics but some  similarity on one or two homogeneous characteristics. In all focus groups,  the participants had filed UI claims within the last 12 months in the state  where the group was held. Most participants said they had filed their  claims online or by phone, although other filing methods were  represented.
Our overall objective in using a focus group approach was to obtain  views, insights, and feelings of UI claimants who had filed claims within  the last 12 months. Specifically, we wanted to learn about challenges they  faced in filing claims, including their experiences with state UI program  websites and phone lines, as well as their views about the courtesy and  responsiveness of UI program staff, their thoughts about ways in which  the state UI program is currently working well, their views about the  timeliness of agency actions, their experience with information provided  by the state UI program and opportunities to provide feedback, and their  recommendations for improvement. By including UI claimants who had  filed using different methods, and claimants who varied according to age,  gender, ethnicity, and self-reported education level and income, we  intended to gather a range of perspectives regarding state UI programs’  customer service efforts. All of the participants selected for the focus  groups were fluent English speakers.
We selected three cities as focus group locations. We selected these  locations because they corresponded to the states we selected for site  visits. We conducted two sessions in each of the three cities—Albany,  New York; Austin, Texas; and Sacramento, California.
Discussions were structured, guided by a moderator who used a  standardized list of questions to encourage participants to share their  thoughts and experiences. We conducted one pretest focus group  session in Rockville, Maryland prior to beginning our travel for the  sessions.
Each of the 6 focus groups was recorded and transcripts were created,  which served as the record for each group. Those transcripts were then  evaluated using content analysis to develop our findings. The analysis  was conducted in two steps. In the first step, three analysts jointly  developed a set of codes to track the incidence of various responses and  themes during focus group sessions. In the second step, each transcript  was coded by an analyst and then those codes were verified by two other  analysts. Any coding discrepancies were resolved by all three analysts  agreeing on what the codes should be.
Methodologically, focus groups are not designed to (1) demonstrate the  extent of a problem or to generalize results to a larger population, (2)  develop a consensus to arrive at an agreed-upon plan or make decisions  about what actions to take, or (3) provide statistically representative  samples or reliable quantitative estimates. Instead, they are intended to  generate in-depth information about the reasons for the focus group  participants’ attitudes on specific topics and to offer insights into their  concerns about and support for an issue. The projectability of the  information produced by our focus groups is limited for several reasons.  First, the information includes only the responses from recent UI  claimants from the six selected groups. Second, while the composition of  the groups was designed to ensure a range of age, gender, and ethnicity,  the groups were not randomly sampled. Third, participants were asked  questions about their experiences or expectations, and other UI claimants  not in the focus groups may have had other experiences or expectations.
Because of these limitations, we did not rely entirely on focus groups, but  rather used several different methods to corroborate and support our  conclusions.
section_title: Appendix II: Unemployment Insurance (UI) Performance Measures and Acceptable Levels of Performance
paragraphs: Appendix II: Unemployment Insurance (UI)  Performance Measures and Acceptable Levels  of Performance Performance Measure  Benefits Measures  First Payment Promptness: % of all 1st payments made within 14/21 days after the week  ending date of the first compensable week in the benefit year (excludes Workshare,  episodic claims such as Disaster Unemployment Assistance, and retroactive payments for  a compensable waiting period).
Nonmonetary Determination Time Lapse: % of Nonmonetary Determinations (Separations  and Nonseparations) made within 21 days of the date of detection of any nonmonetary  issue that had the potential to affect the claimant’s benefit rights.
Nonmonetary Determination Quality- Nonseparations: % of Nonseparation Determinations  with Quality Scores equal to or greater than 95 points, based on the evaluation results of  quarterly samples selected from the universe of nonseparation determinations.
Nonmonetary Determination Quality- Separations: % of Separation Determinations with  Quality Scores equal to or greater than 95 points, based on the evaluation results of  quarterly samples selected from the universe of separation determinations.  Program Integrity Measures  Detection of Overpayments: % of detectable, recoverable overpayments estimated by the  Benefit Accuracy Measurement survey that were established for recovery.
Benefit Year Earnings (BYE) Measure: % of the amount overpaid due to BYE issues  divided by the total amount of UI benefits paid.
Improper Payments Measure: % of UI benefits overpaid plus UI benefits underpaid minus  overpayments recovered divided by the total amount of UI benefits paid.
UI Overpayment Recovery Measure: % of Amount of overpayments recovered divided by  (Amount of overpayments established minus overpayments waived)  (example Improper Payments Information Act (IPIA) Reporting Year 2013 = July 1, 2012 –  June 30, 2013)
Appeals Measures  Average Age of Pending Lower Authority Appeals: The sum of the ages, in days from filing,  of all pending Lower Authority Appeals divided by the number of Lower Authority Appeals.
Average Age of Pending Higher Authority Appeals: The sum of the ages, in days from  filing, of all pending Higher Authority Appeals divided by the number of Higher Authority  Appeals.
Lower Authority Appeals Quality: % of Lower Authority Appeals with Quality Scores equal  to or greater than 85% of potential points, based on the evaluation results of quarterly  samples selected from the universe of lower authority benefit appeal hearings.  Tax Measures  New Employer Status Determinations Time Lapse: % of New Employer Status  Determinations made within 90 days of the last day in the quarter in which the business  became liable.
Performance Measure  Tax Quality: Tax Performance System (TPS) assessment of the accuracy and  completeness of the tax program determined by scoring, on a pass/fail basis, samples of  the 13 tax functions.
Effective Audit Measure: Evaluates whether a state’s employer audit program meets or  exceeds minimum levels of achievement in the following four factors: Factor 1 - % of  Contributory Employers Audited Annually, Factor 2 - % of Total Wages Changed from  Audits, Factor 3 - % of Total Wages Audited, Factor 4 - Average Number of  Misclassifications Detected per Audit, and meets or exceeds a minimum overall score of  the four factors.
Reemployment Measure  Facilitate Reemployment: % of UI claimants who are reemployed within the quarter  following the quarter in which they received their first UI payment.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Cindy S. Brown Barnes, (202) 512-7215, brownbarnesc@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Mary Crenshaw, Assistant  Director; Divya Bali, Analyst-in-Charge; Daniel Berg, Caitlin Croake,  Christopher Morehouse, and Betty Ward-Zuckerman made significant  contributions to this report. Also contributing to this report were Jessica  Botsford, David Chrisinger, Carol Henn, Jill Lacey, Kathy Leslie, Mimi  Nguyen, Lisa Pearson, Carl Ramirez, Jerome Sandau, Almeta Spencer,  Valerie Melvin, Margaret Weber, Charles Willson, and Charles Youman.
section_title: Related GAO Products
paragraphs: Unemployment Insurance: States’ Reductions in Maximum Benefit  Durations Have Implications for Federal Costs. GAO-15-281.  Washington, D.C.: April 22, 2015.
Managing for Results: Selected Agencies Need to Take Additional Efforts  to Improve Customer Service. GAO-15-84. Washington, D.C.: October  24, 2014.
Information Technology: Department of Labor Could Further Facilitate  Modernization of States’ Unemployment Insurance Systems.   GAO-12-957. Washington, D.C.: September 26, 2012.
Unemployment Insurance: Economic Circumstances of Individuals Who  Exhausted Benefits. GAO-12-408. Washington, D.C.: February 17, 2012.
Managing for Results: Opportunities to Strengthen Agencies’ Customer  Service Efforts. GAO-11-44. Washington, D.C.: October 27, 2010.