More Effective Federal and State Cash Management Would Increase Interest Income of Unemployment Trust Fund

Cash management policies were reviewed to determine what improvements are needed to increase the earnings of the Unemployment Trust Fund. According to the Social Security Act, unemployment taxes are to be deposited in the Unemployment Trust Fund for investment by the Secretary of the Treasury. Interest from investments enables the Fund to grow, thus increasing the amount that states have available to pay the unemployed. During the last quarter of 1978, the Fund earned interest at an annual rate of 6.25 percent. Several million dollars of state-collected unemployment taxes are not on deposit in the Fund. The Department of Labor (DOL), which is responsible for administering the program, has not effectively monitored the states' cash management performance nor provided guidance to the states.