Welcome to the June 28, 2005, issue of BullsEye, the On Point Technology newsletter. Our goal is to keep you up-to-date on the latest unemployment insurance news and developments at On Point Technology.

In this issue:

• On Point Technology exhibits at NASWA 2005 UI Technology Connection Conference
• Industry News: Michigan agency orders 215 workers to repay unemployment benefits
• Did You Know? Data collection: the first step in detecting fraud

On Point Technology exhibits at NASWA 2005 UI Technology Connection Conference

On Point Technology recently returned from an energizing exhibition at the 2005 UI Technology Connection Conference, held June 12-16 in Wilmington, North Carolina, and sponsored by the National Association of State Workforce Agencies (NASWA). Representatives Mike Lorsbach, Mike Marshman, Ron Burkhart and Bob Yokavonus had the opportunity to join some 250 unemployment insurance program practitioners and information technology specialists for several days of intense exploration and discussion of unemployment insurance issues, solutions and emerging developments.

The emphasis the US Department of Labor Employment and Training Administration (DOL/ETA) is currently placing on fraud detection and identity theft, and the funding that is now being provided to combat these problems, created an excellent venue for On Point Technology to present its very relevant software applications. The team demonstrated Barts and Aware, the company's two unemployment insurance fraud detection and overpayment management programs, to the majority of those in attendance, and the applications were very well received. Several attendees mentioned that their agencies are in the process of requesting supplemental funding to procure software to identify, manage and combat both fraud and non-fraud overpayments, as well as identity theft leading to organized criminal fraud schemes. Also, SUTA dumping continued to be an especially pertinent topic of discussion, not only at formal sessions, but also in casual conversations during meals and breaks.

On Point Technology was also excited to announce for the first time its upcoming product, GuidePoint, a new Web-based unemployment insurance benefits solution that is built on the General Unemployment Insurance Development Effort (GUIDE) principles already found in numerous state agencies. Many attendees remarked that some agencies' current familiarity with GUIDE would make for easy training as On Point Technology begins to implement GuidePoint in the coming months.

On Point Technology is especially grateful to the North Carolina Employment Security Commission staff for such a successful conference. From the program and presenters to the food, entertainment and arrangements, everything was first class and reflected the hard work and long hours that went into planning and executing the conference.

Industry News

"Michigan agency orders 215 workers to repay unemployment benefits" — Michigan's Unemployment Insurance Agency (UIA) recently uncovered an overpayment and fraud case involving 215 workers from Atlantic Automotive. Seventy-five employees were found to have committed unemployment insurance fraud for collecting benefits after returning to full-time work from a layoff. The remaining 140 unintentionally failed to report compensation in the form of holiday, training and vacation pay. The 215 workers must repay a total of $693,419 in benefits, and the 75 who intentionally defrauded the agency must additionally pay $2.3 million in penalties. The discovery came after UIA received a tip from the company.

On Point Technology's Barts application can detect both fraud and non-fraud overpayment. Barts' various crossmatches identify wage/benefit conflicts and handle them automatically or pass them on to claims investigators for action. If you would like more information on how Barts can improve fraud detection for your organization, contact Bob Yokavonus at 908-526-0426 or e-mail him at robert.yokavonus@onpointtech.com.

Do you have a fraud story you'd like to share?
Let us know.

Did You Know?

Every day, new clues emerge that help state workforce agencies identify benefit collection fraud schemes. These schemes are usually uncovered by experienced unemployment insurance staff who spot an abnormality in agency data that, when investigated, reveals a plot. The data they are working with is usually gathered for other purposes, like claims adjudication or federal reports. This leads to the question of whether data specifically intended for fraud detection was built into database schemas when existing benefits systems were originally developed, many 20 to 25 years ago. The answer? Probably not.

Many fraud detection programs are not equipped to address the technological advances that have made filing claims easier, but have also enabled new ways of defrauding the system. For example, IP addresses did not exist when most benefits systems were first designed in the 1970s. Because many claims are now submitted via the Internet, collecting IP addresses is an invaluable fraud detection method that can indicate if numerous claims originate from the same IP address, a tip-off that a fraud scheme is likely underway. Similarly, toll-free 800 numbers allow claimants to file easily and inexpensively, but many systems don't have the capability to determine how many claims are initiated from the same telephone—an effective clue for spotting a possible fraud scheme.

When developing a new claims system or updating an existing one, agencies should provide for data collection to support their unemployment insurance program, for many reasons. First, you can't analyze data you don't have regardless of how valuable the findings have been in other states. Second, it is far less expensive and time-consuming to provide for data collection while the system is being designed than to try to add it on when the system is complete. Third, tools are now available to perform types of analyses not possible just a year ago. And last, new technology, like Aware's InfoBase, is available to assemble data from many disparate systems, just as long as someone had the foresight to collect it.

As technology continues to develop and make the claims-filing process easier, fraud detection technology must keep up. On Point Technology's Aware software addresses this problem with its ability to collect data and then perform sophisticated pattern analyses.

If you're wondering what data to collect, On Point Technology has assembled a list of what many states have found to be helpful in identifying possible fraud schemes and will be happy to share it with you. If you have a new idea for data collection, let us know so we can check it out and spread the word of valuable findings to other state agencies. To learn more about data collection, or Aware's integral role in the process, contact Bob Yokavonus at 908-526-0426 or robert.yokavonus@onpointtech.com.

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