This final report presents the results of our follow-up review
of internal controls over the Modernized Enumeration System (MES)
(A-04-96-44001). The objective of our review was to evaluate the
Social Security Administration’s (SSA) progress in implementing
corrective actions recommended in an April 1993 audit report issued
by the Department of Health and Human Services (HHS), Office of
Inspector General (OIG), entitled Audit of the System of Internal
Controls for the Modernized Enumeration System (A-13-90-00045).
In its report, HHS/OIG acknowledged that automated controls
within MES provide reasonable assurance that information entered
is generally processed in an accurate and timely manner. Nonetheless,
HHS/OIG found that SSA’s field offices (FO) lacked sufficient
controls to prevent or detect fraud, errors, and misuse in the
Social Security number (SSN) application process. Additionally,
the report asserted that FOs needed to improve their procedures
for resolving system-generated error messages.
To address the results of its review, HHS/OIG made five recommendations
for corrective action with which SSA generally agreed. During our
follow-up review, we examined the status of SSA’s planned
actions. Our review revealed that SSA had fully implemented one
recommendation (number 4) and had planned to complete implementation
of three others (numbers 1, 3, and 5) in August 1997. However,
SSA will not fully execute corrective action for recommendation
number 2 until 1998 or later. In its response to the HHS/OIG report,
SSA generally agreed with the final recommendation regarding Immigration
and Naturalization Service’s (INS) verification of alien work
status, but suggested that the OIG revisit the issue of INS enumeration
in 1995.
Subsequent to the completion of our review, SSA informed
us that on August 25, 1997, it implemented the largest software
release in its history, including the above MES recommendations
(numbers 1, 3, and 5).
In summary, SSA has initiated the following actions to strengthen
controls over the enumeration process at its FOs: 1) revised FO
procedures for processing applications submitted by United States
(U.S.) born individuals age 18 or older, 2) increased the FOs’ access
to the INS Systematic Alien Verification for Entitlements (SAVE)
system, 3) established a system edit for enumeration feedback messages
(EFM) vulnerable to erroneous SSN assignment, 4) revised SSA procedures
for the resolution of EFMs that indicate an applicant is identified
as deceased in Agency records, and 5) established an MES clearance
screen to prevent the unauthorized issuance of a replacement card
to an applicant who is annotated as deceased in SSA’s records.
More detailed information regarding these corrective actions is
contained in the body of this report.
The most vital element of our Nation’s Social Security
system is the SSN. Because the public’s lifetime earnings
are catalogued using the SSN as an identifier, accuracy and integrity
in the enumeration process is essential. Enumeration refers to
SSA’s process for assigning SSNs and issuing original and
replacement Social Security cards. Enumeration is sometimes broadly
interpreted to include SSN verification activities which include
verification of SSNs for employers and other government agencies.
Since the Social Security program was enacted in 1935, SSA has
assigned approximately 415 million SSNs. During 1996, SSA assigned
about 5.6 million new SSNs and issued another 10.3 million replacement
cards. The magnitude of the enumeration area and the importance
placed on the SSN in today’s society to obtain Government
benefits and services requires that SSA have tight controls in
place to prevent fraud and error.
MES assigns SSNs and sends Social Security cards to individuals
for whom applications are processed. SSNs are used by SSA as identifiers
to record earnings information, and by SSA and other Federal and
State agencies as authorized by Federal law to administer their
programs.
One FO supervisor estimated that about half of all FO time
is spent processing applications for original and replacement cards.
Newly established SSN records and changes to existing SSN records
are maintained on an Alpha Index file and a Numident file. The
Alpha file contains the names and SSNs of all SSN holders in alphabetical
order, while the Numident file contains the information in numerical
sequence. Numident data is sent weekly to the Internal Revenue
Service for use in their matching operations. Additionally, SSNs
are provided to States for use in administering their welfare and
birth certificate issuance programs.
Before assigning an individual an SSN, MES screens existing
records based on data entered from the application to determine
whether a number has already been assigned to the individual. This
screening process attempts to prevent the assignment of multiple
SSNs to the same individual. MES performs this search using the
Alpha Index file. MES also processes data changes to existing SSN
records when those changes are supported by an application with
proper evidence supporting the changes. For example, SSA uses MES
to issue corrected SSN cards for name changes. An applicant for
a corrected card must submit evidence of identity in the most recent
name on SSA’s records, as well as evidence of identity in
the new name.
Our review was performed in accordance with generally accepted
government auditing standards. Our objective was to evaluate SSA`s
progress in implementing the recommendations resulting from HHS/OIG`s
report entitled, Audit of the System of Internal Controls for
the Modernized Enumeration System, issued in April 1993.
To accomplish our objective, we performed the following audit
steps:
reviewed policies and procedures regarding MES and the
SSN application process, which SSA outlined in the Program
Operations Manual System (POMS) and the Modernized Systems
Operations Manual;
examined SSA`s "Description of the Functional
Requirements for MES" and other information contained
in the Integrated Client Data System, release 2; and
discussed with SSA Headquarters and FO supervisory and
staff personnel MES initiatives and the enumeration process.
We reviewed the internal controls necessary to meet our objective.
Audit work was performed at SSA Headquarters in Baltimore, Maryland
and the Southeastern Program Service Center and the District Office
in Birmingham, Alabama. Our field work began in January 1997 and
was completed in March 1997.
RESULTS OF REVIEW
In response to an HHS/OIG report issued in April 1993 and
entitled Audit of the System of Internal Controls for the Modernized
Enumeration System, SSA has fully implemented four of the recommended
corrective actions and partially implemented the remaining recommendation.
However, the final corrective action, which involves coordinating
and interfacing with INS is not expected to be complete until 1998
or later. We support the systemic changes proposed by HHS/OIG and
encourage SSA management to continue in their efforts to strengthen
these and other controls within the enumeration process.
In general, the HHS/OIG report acknowledged that automated
controls within MES provide reasonable assurance that information
entered into the system is processed in an accurate and timely
manner. However, the auditors reported that SSA FOs lacked sufficient
controls to prevent or detect fraud, error, and misuse in the SSN
application process. Specifically, HHS/OIG cited weaknesses in
FOs’ separation of duties, detection controls, and compliance
with established procedures. The auditors also asserted that FOs
needed to improve their procedures for resolving system-generated
error messages.
To determine the effect of these weaknesses, HHS/OIG reviewed
1) SSNs assigned to applicants age 18 and over (U.S. and foreign
born) and 2) enumeration feedback messages (EFM). In 1993, as a
result of their testing, the auditors made the following recommendations
to strengthen controls over the enumeration process.
1. SSA should revise procedures for U.S. born applicants
age 18 years or older to include management or management designee
review of the applications and then authorization for the assignment
of an original SSN by input of the reviewer`s personal identification
number (PIN) to complete the transaction.
2. SSA should negotiate with INS to certify work eligibility
of aliens applying for new SSNs.
3. SSA should establish an MES system edit for those EFMs
that are vulnerable to erroneous SSN assignment. The edit should
require a management or management designee review of EFM resolutions
to ensure the proper action is taken and that the action will
not result in an incorrectly assigned SSN. MES should require
input of the reviewer`s PIN before the application can be
processed.
4. SSA should revise its Modernized System Operations
Manual procedures for the resolution of the EFM titled "SSA
Record Shows Number Holder Deceased" to refer FO users
to POMS section GN 00304.100.B for resolving potentially inaccurate
death data.
5. SSA should establish an MES system edit to prevent the
issuance of a replacement SSN card without the deletion of the
death record from the Numident file. Deletion of the death record
should only be done by management authorization through input
of the authorizer’s PIN.
SSA implemented recommendation number 4 in March 1993, before
the HHS/OIG report was issued in its final form. Accordingly, we
did not review the implementation of this corrective action during
our follow-up audit. However, the remainder of our report addresses
SSAs implementation of recommendations 1, 2, 3, and 5.
Any individual wishing to obtain an SSN is required to submit
a signed Form SS-5, Application for a Social Security Card, to
SSA and provide evidence of: 1) U.S. citizenship or lawful alien
status, 2) identity, and 3) age. Applications for individuals under
the age of 18 may be submitted by mail or in person. However, current
SSA regulations mandate that any applicant who is age 18 or over
must submit to an in-person interview with SSA personnel. This
requirement is necessary regardless of whether the applicant is
U.S. or foreign born.
In its report, HHS/OIG asserted that the SSN application
process for individuals 18 or over was vulnerable to fraud, errors,
and misuse. The auditors’ conclusions resulted from tests
performed on 237 applications submitted by U.S. and foreign born
individuals age 18 or over. In summary, HHS/OIG found that FOs
lacked proper separation of duties and integrity reviews for these
applications. Additionally, the auditors reported that FO employees
did not always follow required procedures while conducting the
in-person interviews. For example, FO employees did not always
verify through documentation or third-party contacts the applicant’s
allegation as to why he or she had never applied for an SSN. As
such, the auditors recommended that SSA require FO managers, or
their designees, to review all applications submitted by U.S. born
individuals who are 18 or over. Further, they recommended that
managers authorize their approval of the application by entering
their PIN to MES when completing the transaction.
Our follow-up audit revealed that SSA had taken steps to
address weaknesses noted by HHS/OIG. SSN applications for U.S.
born individuals 18 or over are only processed using the on-line
interview mode. SSA developed a new screen within MES containing
questions that the FO employee should ask the applicant to ensure
that he or she has never before applied for an SSN. Also, the screen
used to process applications for U.S. born individuals 18 years
and older has been edited to print the message "OPERATIONS
SUPERVISOR OR ABOVE IS REQUIRED TO CLEAR THIS APPLICATION." When
MES presents this message, the application will not "clear" or
process unless a second PIN assigned to a member of management
or a management designee has also been entered into the system.
Subsequent to the completion of our review, SSA informed us that
full implementation of these changes was accomplished on August
25, 1997.
INS CERTIFICATION OF ALIENS’ WORK ELIGIBILITY STATUS
During its audit, HHS/OIG determined that controls within
the enumeration process were not sufficient to preclude the assignment
of SSNs to aliens not authorized to work in the U.S. Aliens who
require SSNs must apply for the card at an SSA FO and must present
documentary evidence of age, identity, lawful alien status, and
work authorization, if applicable. However, as reported by HHS/OIG
and as acknowledged by SSA, the practice of counterfeiting INS
documents is widespread in the U.S. As a result, SSA employees
must be familiar with a variety of INS documents and determine
whether those presented are valid.
HHS/OIG’s audit report recognized SSA’s efforts
to more thoroughly verify alien status by gaining access to the
INS "Alien Status Verification Index" data base. This
data base is part of INS’ SAVE program and allows FOs to verify
INS documents presented by aliens during the SSN application process.
Nevertheless, HHS/OIG reported that, although the SAVE program
was more effective than previous verification procedures, INS had
a significant time lag in annotating information to the system.
For example, information on aliens who enter the U.S. may not be
annotated to the SAVE program for up to 60 days after entry. Accordingly,
HHS/OIG recommended SSA negotiate with INS to certify the work
eligibility status of aliens applying for new SSNs.
SSA generally agreed with the report recommendation; however,
SSA suggested that OIG revisit the issue of INS enumeration in
1995. Specifically, the Agency stated that, although INS’ operating
circumstances prevented it from accepting additional workloads
at that time, future initiatives called for the possibility that
INS may assist SSA by enumerating aliens.
Since 1995, we have been monitoring SSA’s progress,
and this follow-up review reveals that the Agency has made strides
in negotiating with INS and the Department of State (State) to
gather enumeration data. In fact, SSA recently proposed a major
regulation that would provide authorization for elements of State
and INS to obtain, as a part of the immigration process, enumeration
information for SSA to assign SSNs to aliens. The State would collect
enumeration data as part of the immigrant visa process. INS would
electronically forward enumeration data for these aliens to SSA
after they enter the U.S. By having State and INS collect and forward
this information, SSA asserts that it will reduce the potential
of inadvertently accepting inappropriate or counterfeit documents,
thus improving the integrity of the enumeration process. Additionally,
SSA representatives have stated that this process will eliminate
duplicate collection of data already collected by State and INS
for immigration purposes, thereby providing overall Government
efficiency.
We are encouraged by SSA’s efforts to transfer the responsibility
of alien documentation verification to State and INS. We agree
with SSA’s assertions that this process would reduce the number
of SSNs erroneously assigned to aliens and would enable the Agency
to meet its goal of world-class service. Additionally, as shown
in the following table, we estimate that more than one million
applications could be eliminated from the FO workload when State
and INS systems are in place and capturing SSN enumeration data.
Table: Estimate of
SSN Applications Eliminated From FO Workload
Category
Original
Replacement
Total
Immigrants
400,000
100,000
500,000
Aliens Issued Employment Authorization
375,000
25,000
400,000
Aliens Adjusting Status to Permanent
Residence
0
350,000
350,000
Source: OIG analysis of SSA Tactical Plan Profile-Initiative Profile & Schedule,
dated 2/96.
SSA management does not anticipate that this recommendation
will be fully implemented until 1998 or later. As such, we will
continue to monitor the Agency’s progress toward implementing
this initiative during future audit assignments.
OVERSIGHT FOR RESOLUTION OF ENUMERATION FEEDBACK MESSAGES
During the processing of an SSN application, MES sends an
EFM when an application requires further development. EFMs typically
occur when information transmitted through MES conflicts with data
previously established in SSA’s records. For example, MES
issues an EFM if it detects that an individual has applied for
multiple SSNs. Additionally, if an individual presents an incorrect
SSN when applying for a replacement card and the SSN actually belongs
to another individual, MES issues an EFM for the FO to resolve.
In its report, HHS/OIG concluded that FO controls are inadequate
to ensure that EFM resolutions are appropriate. Specifically, the
auditors found that because FOs have the ability to override EFMs,
inappropriate or incorrect SSNs were assigned. Accordingly, HHS/OIG
recommended that SSA establish an MES edit for those EFMs vulnerable
to erroneous SSN assignment. HHS/OIG suggested that the edit require
management or management designee review of EFM resolutions to
ensure that the appropriate action is taken. Further, the report
recommended that MES require input of the reviewer’s PIN before
the application can be processed.
SSA concurred with the recommendation and stated that it
would develop an automated data processing (ADP) plan that produces
a system edit for those EFMs deemed vulnerable to erroneous SSN
assignment and allows input of a reviewer’s PIN to complete
the resolution process. During our follow-up review, we determined
that SSA had identified five vulnerable EFM indicators. These messages
pertain to verification problems, suspect or fraudulent documentation,
and records with other special indicators. Additionally, SSA made
improvements in the MES screen for processing the EFM resolution.
Specifically, the screen now displays the following message for
those EFMs defined by the agency as vulnerable: "OPERATIONS
SUPERVISOR OR ABOVE IS REQUIRED TO CLEAR THIS APPLICATION." MES
will not allow the application to "clear" or process
unless a second PIN assigned to a member of management or a management
designee has also been entered into the system. Subsequent to the
completion of our review, SSA informed us that SSA’s corrective
action was fully operational on August 25, 1997.
DELETION OF DEATH DATA FROM THE NUMIDENT
Information submitted by SSN applicants may be entered into
MES in two ways. First, the FO may enter application information
using the on-line interview mode, whereby SSA employees enter the
data directly into MES as the applicant supplies it. Secondly,
the FO may use the batch mode in which data is entered into the
system without the presence of the applicant based on a Form SS-5
submitted either in person or through the mail. If MES detects
conflicting or similar information on its existing data base records
while in the interview mode, MES will not let the FO employee complete
processing of the application until the discrepancy is resolved.
For example, if MES finds that an applicant’s current record
contains a death indicator, the system awaits resolution of this
item before proceeding to accept the application. However, HHS/OIG
reported that, as with other EFMs, the feedback message could be
overridden by FO personnel and an SSN card issued.
In its report, HHS/OIG recommended that SSA establish another
MES edit to prevent the issuance of a replacement SSN card without
deletion of the death record from the Numident file. Additionally,
the recommendation specified that the deletion of death records
should only be done by management authorization through input of
the authorizer’s PIN. SSA concurred with the recommendation
and stated that it would issue an ADP plan to address the system
edit.
Based on our review, we found that SSA had established the
recommended MES edit. Specifically, a new screen has been added
to MES that will alert FO employees that an applicant’s SSN
record contains a death indicator. Additionally, a message appears
on the screen stating the following: "OPERATIONS SUPERVISOR
OR ABOVE IS REQUIRED TO CLEAR THIS APPLICATION." This message
will not allow the application to "clear" or process
unless a second PIN assigned to a member of management or a management
designee has also been entered into the system. However, if an
application is being entered to MES in the batch mode, processing
of the application does not have to be cleared by an Operations
Supervisor or above. Instead, SSA relies on an EFM to be generated
and printed in the FO for resolution the following business day.
The EFM requires a management PIN for resolution. Again, SSA’s
corrective action was fully implemented on August 25, 1997.
In summary, SSA has completed or is in the process of implementing
all recommendations made in HHS/OIG’s April 1993 report. We
commend SSA for its efforts in executing these corrective actions
and strengthening the controls within the enumeration process.
As such, at this time, we are not making any further recommendations.
We do, however, plan to perform other audits in which we will further
examine controls within the enumeration process.
Agency Comments
SSA agreed with our conclusions and made several technical
comments that have been reflected in the report.
APPENDICES
APPENDIX B
MAJOR REPORT CONTRIBUTORS
Office of the Inspector General
Gary Kramer, Director, Program Audits (East)
Betty Alexander, Deputy Director, Enumeration
Ellen Justice, Auditor
www.socialsecurity.gov
