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Errors in Federal–State Unemployment Insurance (UI) program payments have long been a concern to the U. S. Department of Labor (DOL) and other stakeholders. To maintain program solvency and public support for the program, it is crucial that payments are made only to eligible recipients and that payment amounts are correct. Since 1987, the DOL has assessed the accuracy of state UI program payments through the Benefit Accuracy Measurement (BAM) program, identified causes of improper payments, and initiated corrective action plans when systemic errors are found. Since 2002, DOL has also used BAM program data to generate UI program performance measures in compliance with the Improper Payments Information Act (IPIA) and its amendments—the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA)—and to produce several other program integrity rates.

Given their role in gauging payment propriety and producing program performance measures in compliance with federal law, it is critical that BAM program data are comprehensive and accurate. Therefore, DOL contracted with Mathematica Policy Research to conduct a thorough review of existing BAM procedures and recommend improvements when necessary. This report documents findings from site visits to eight state UI agencies and analyses of BAM program data, proposes recommendations for redesigning aspects of the BAM program, and suggests alternatives to existing program integrity measures.