OFFICE OF
THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
FOLLOW-UP: THE SOCIAL SECURITY
ADMINISTRATION’S CONTROLS OVER
SUSPENDING COLLECTION EFFORTS ON
TITLE XVI OVERPAYMENTS
September 2009 A-04-09-19039
AUDIT REPORT
Mission
By conducting independent and objective audits, evaluations and investigations, we inspire public confidence in the integrity and security of SSA’s programs and operations and protect them against fraud, waste and abuse. We provide timely, useful and reliable information and advice to Administration officials, Congress and the public.
Authority
The Inspector General Act created independent audit and investigative units, called the Office of Inspector General (OIG). The mission of the OIG, as spelled out in the Act, is to:
Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.
To ensure objectivity, the IG Act empowers the IG with:
Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.
Vision
We strive for continual improvement in SSA’s programs, operations and management by proactively seeking new ways to prevent and deter fraud, waste and abuse. We commit to integrity and excellence by supporting an environment that provides a valuable public service while encouraging employee development and retention and fostering diversity and innovation.
MEMORANDUM
Date: September 2, 2009 Refer To:
To: The Commissioner
From: Inspector General
Subject: Follow-up: The Social Security Administration’s Controls over Suspending Collection Efforts on Title XVI Overpayments (A-04-09-19039)
OBJECTIVE
Our objectives were to evaluate the Social Security Administration’s (SSA) controls over suspending the collection of Title XVI overpayments and determine whether personnel complied with existing policies and procedures. Additionally, we determined the status of corrective actions SSA took to address recommendations in our April 2005 report, The Social Security Administration’s Controls over the Suspension of Title XVI Overpayment Collection Efforts.
BACKGROUND
Title XVI of the Social Security Act established the Supplemental Security Income (SSI) program to provide income to financially needy individuals who are aged, blind, or disabled. To determine an individual’s initial eligibility for the program, payment amounts, and periodic payment redeterminations, SSA relies heavily on the individual’s self-disclosure of all his or her income sources. Because an SSI recipient’s determination factors, such as financial status, marital status, and living arrangements, frequently vary over time, SSI payments may be error-prone and result in overpayments.
When a Title XVI overpayment occurs, SSA can suspend collection of the debt in certain situations. Specifically, collection efforts can be suspended when a recipient is not in current payment status and previous collection efforts have determined the individual is unable to repay, unwilling to repay, cannot be located, or is out of the country. Suspension decisions allow SSA to stop unproductive collection efforts. Because a suspended overpayment is not waived or written off as uncollectible, SSA has the option to initiate collection efforts at a later date if a change in the debtor’s status may lead to some collection of the overpayment.
Our April 2005 report made recommendations to address control weaknesses and inefficiencies in SSA’s process to suspend efforts on Title XVI overpayment collections. In response to the report, SSA agreed to the following.
• Issue a reminder and, if necessary, further guidance to SSA staff requiring that they fully develop and document overpayment suspension decisions, as required by SSA policy.
• Instruct Debt Management and field office supervisors to periodically review overpayment suspension decisions to ensure staff complies with SSA requirements.
• Ensure all overpayment suspension decisions exceeding established thresholds are reviewed and approved by appropriate SSA management officials, as required by SSA policy.
• Periodically match debtors’ and representative payees’ earnings to suspended overpayments to identify instances in which some repayment of the debt is possible.
• Consider clarifying existing guidance and/or issuing further guidance allowing the collection of overpayments from a representative payee who is a parent of a minor child/beneficiary.
See Appendix B for the scope and methodology of our review.
RESULTS OF REVIEW
SSA took action on three of the recommendations from our April 2005 report. According to SSA, funding limitations have delayed development of an automated system that would address the remaining two recommendations. SSA’s corrective actions resulted in some improvement in the error rates. However, our current audit found similar conditions continued to exist. In our previous report, we found that 52 percent of the suspension decisions tested did not have documentation to justify the action. Also, for those decisions that required management approval, 87 percent had no evidence of the approval. Our current audit found that the error rates had declined to 33 and 34 percent, respectively. Moreover, our previous report found that 66 percent of suspension decisions had at least one compliance error. The current review found that this error rate had declined to 45 percent.
Our current review of 150 Fiscal Year (FY) 2007 Title XVI overpayment suspensions ($3,000 or more) found that SSA staff did not always comply with Agency policies and procedures to ensure collection suspensions were appropriate. Specifically, SSA did not always (1) document the justification for suspension decisions or (2) obtain required management approval before suspending an overpayment. Additionally, we identified instances where SSA personnel suspended overpayments when debtors or the debtors’ representative payees had reported earnings that may have enabled some repayment. Finally, SSA personnel suspended some debts and classified the debtors as unable to locate or out of the country, but we found no evidence SSA attempted to contact the debtor or the debtor’s representative payee through their current employer. In total, 67 (44.6 percent) of the 150 suspension decisions reviewed had 1 or more noncompliance errors. Based on our results, for FY 2007 suspension decisions greater than $3,000, we estimate for 5,120 cases totaling about $45.9 million, SSA personnel did not follow policies and procedures when it suspended overpayment collection efforts.
Additionally, in a separate test of 50 beneficiaries who had multiple overpayment suspension decisions (totaling $3,000 or more) in a 7-day period, we identified similar noncompliance issues. For 18 (36 percent) of the 50 beneficiaries, SSA personnel did not justify or properly approve the suspension decisions. Also, for 2 (4 percent) of the 50 beneficiaries, SSA personnel split the overpayments before processing the suspension decisions—possibly to circumvent SSA’s required management approval process. For beneficiaries with multiple suspension decisions in FY 2007, we estimate for 1,380 cases totaling about $6.3 million, SSA personnel did not follow policies and procedures when it suspended overpayment collection efforts.
SSA PERSONNEL DID NOT ALWAYS DOCUMENT THEIR DEVELOPMENT OF, AND JUSTIFICATION FOR, SUSPENDING COLLECTION EFFORTS
SSA personnel did not always document efforts to collect overpayments it subsequently suspended. SSA’s policies and procedures required that both program service center and field office staff document the development of, and justification for, a suspension decision. However, for 49 (32.6 percent) of 150 FY 2007 overpayment suspensions, SSA personnel did not maintain relevant and sufficient documentation. We estimate that 3,520 FY 2007 overpayment suspension decisions, totaling about $22.5 million, were not adequately documented. See Appendix C for our estimation methodology.
SSA policies require that personnel take certain actions before suspending collection efforts on Title XVI overpayments. Documentation should have been available indicating that the required steps were performed, such as the following.
• SSA requires that debtors who state they are unable to pay submit personal financial information for review. Information that should be obtained and analyzed includes the debtor’s income, expenses, and other resources. If SSA determines sufficient funds are not available, the debt may be suspended for inability to pay. However, we did not always find documentation showing analysis of the debtor’s financial information.
• When a debt exceeds $3,000 and the debtor refuses to provide financial information or is unwilling to pay—SSA is required to check the debtor’s master earnings record to determine whether the debtor may have earnings that enable them to make some repayment. For the unwilling to repay suspension decisions tested, we did not always find evidence that SSA personnel reviewed the debtor’s earnings records.
• To locate a debtor, SSA should rely on information from internal sources and other available outside sources, such as credit bureaus, the U.S. Postal Service, and State Departments of Motor Vehicles. SSA personnel are required to pursue all reasonable leads in locating a debtor. SSA’s Master Earnings File (MEF) can be used to locate a debtor. If efforts to locate the debtor are unsuccessful, SSA personnel are required to contact the debtor through the employer. However, we did not always find evidence of such contacts or attempts to locate the debtors.
In our prior report, we made two recommendations to address these matters: (1) issue a reminder and, if necessary, further guidance to SSA debt collection staff requiring that they fully develop and document overpayment suspension decisions; and (2) instruct Debt Management and field office supervisors to periodically review overpayment suspension decisions. SSA issued an Administrative Message and revised policy as recently as April 2009 on documenting the overpayment decisions. However, our current review found many suspension decisions still lacked documentation to justify the decision. We believe program service center and field office staffs must be more diligent when processing these actions.
SSA MANAGEMENT DID NOT ALWAYS DOCUMENT ITS REVIEW OF SUSPENSION DECISIONS AS REQUIRED
Of the 150 unable to pay, unwilling to pay, or unable to locate or out of the country suspension decisions reviewed, 47 required management approval. However, we found no evidence that 16 (34 percent) of the 47 suspension decisions were approved. Based on our results, we estimate that 1,260 FY 2007 overpayment decisions, totaling $22.6 million, did not have documented supervisory approvals. See Appendix C for our estimation methodology.
Of the 16 suspension decisions, 2 exceeded $20,000. In one case, a Debt Specialist at an SSA program service center improperly suspended collection efforts on a $106,790 overpayment. According to SSA policy, the Assistant Regional Commissioner for Processing Center Operations must forward debts over $100,000 to the Department of Justice for approval to suspend the overpayment. We found no evidence the case was forwarded to the Department of Justice. In the second case, a Debt Specialist suspended a $21,085 overpayment. For debts between $20,001 and $100,000, SSA policy requires that an Assistant Regional Commissioner approve the decision. We found no evidence of the approval.
Field office staff processed 14 of the 16 suspension decisions that lacked management approval. Field office management is required to review and approve the overpayment decisions greater than $2,000 through a “2-PIN” process. However, for these 14 suspension decisions, we found no evidence of a second personal identification number (PIN) that approved the decisions.
Our prior report recommended that SSA management review and approve overpayment suspension decisions when established dollar thresholds are exceeded. SSA agreed with this recommendation and explained that the 2-PIN process for field office staff was implemented in 2004. Nevertheless, suspension decisions over $2,000 were being processed without a manager’s approval. SSA staff explained that when the 2-PIN process was first implemented, some decisions were processed without a second PIN, but SSA had taken actions to rectify the problem.
For the 14 cases identified in our current review, SSA staff explained that the suspension decisions were “controlled” through the Recovery and Collection of Overpayments System (RECOOP), which is used at the program service center level or in certain situations by field offices. Staff further explained that when overpayments are controlled by RECOOP, suspension decisions made at field offices are not subject to the 2-PIN process. SSA representatives explained that the reasoning behind the procedure was that SSA had no data to indicate there was either “decisional” or “documentation” errors in RECOOP overpayment disposition decisions. However, we found 11 of the 14 suspension decisions had documentation and/or decisional errors.
SSA agreed that policy in effect during our audit period required the 2-PIN approval process for suspension decisions made at the field office level. However, in May 2009, SSA’s revised policy officially eliminated the 2-PIN approval process for suspension decisions controlled by RECOOP. SSA’s statement that this category of suspension decisions was not error-prone is inconsistent with our audit results. Accordingly, we encourage SSA to reconsider this revision to its May 2009 policy.
SSA PERSONNEL SUSPENDED OVERPAYMENTS WHEN DEBTORS OR REPRESENTATIVE PAYEES HAD EARNINGS
Of the 100 cases in which SSA suspended collection efforts because the debtor was unable or unwilling to repay, we determined 20 (20 percent) debtors or their representative payees had earnings that may have been sufficient to enable some repayment of the debt. We are aware that earnings are only part of the debtor’s overall financial position, as expenses and other assets are also factors and affect SSA’s decision to suspend an overpayment based on inability to repay. However, based on our results, we estimate that, for 2,140 FY 2007 suspension decisions totaling about $13.2 million, SSA did not identify debtors’ or their representative payees’ earnings, which may have been sufficient to make some repayment of the debt possible. See Appendix C for our estimation methodology.
Debtors Individually Responsible for Overpayments
For 6 of the 20 suspension decisions, the beneficiary had reported earnings when the overpayments were suspended. The annual earnings information available to SSA staff at the time of the suspension decision for these six beneficiaries ranged from $15,416 to $40,940.
We acknowledge that, because of annual wage reporting timeframes, current year earnings are frequently not available to SSA until the third quarter of the following year. As a result, SSA staff may have had only Tax Year (TY) 2005 earnings available when some of the FY 2007 suspension decisions were made. However, we determined that SSA debt collection staff had TY 2005 earnings available for six cases. Further, each of the six debtors had continued employment for TYs 2005 through 2007 with the same employer. We believe 3 consecutive years of earnings is an indication of continuing employment that should have been considered in determining whether the debtors were capable of some repayment. Table 1 details the debtors’ earnings that were available to SSA staff when the overpayment was suspended and demonstrates the debtors’ earnings continued over the 3-year period 2005 through 2007.
Table 1: Earnings Data Available When Overpayments Were Suspended
Overpayment
Amount
Date
Suspended Reported
Earnings
TY 2005 Reported
Earnings
TY 2006 Reported
Earnings
TY 2007
1 $3,835 03/15/07 $25,549 $29,920 $37,312
2 5,209 03/15/07 25,549 29,920 37,312
3 4,247 03/29/07 38,365 50,537 60,217
4 3,615 09/24/07 28,196 40,940 43,638
5 3,590 10/06/06 15,416 18,073 17,519
6 3,055 10/17/06 15,972 16,949 22,552
Legend: Earnings shaded in purple indicate the debtor earnings available when the overpayment was suspended
Our prior report recommended that SSA periodically match debtor earnings to suspended overpayment decisions to identify instances in which some repayment of the debt is possible. SSA responded that administrative wage garnishment was implemented as a debt collection tool in December 2004. This tool enables SSA to identify debtor wages and attempt to recover debts from wages. However, for these six cases, we found no evidence SSA considered or took administrative wage garnishment actions.
Representative Payees Who May Have Been Responsible for Overpayments
In 16 of the 20 suspension decisions, the debtor’s representative payee, who may have been responsible for the overpayment, had sufficient earnings to repay some or all of the debt. For all 16 suspensions, the representative payee was the parent or relative of a minor child/beneficiary or a mentally disabled adult. Further, the representative payees were managing the beneficiaries’ funds when the overpayments occurred. According to SSA policy, personnel may attempt to recover an overpayment from the beneficiary’s representative payee and should attempt to determine whether the representative payee is solely or jointly liable for the overpayment. Given that in all 16 cases, the representative payee was the parent or a relative of a minor child or mentally disabled adult at the time of the overpayment, we believe it is reasonable to expect the parent or relative was responsible for the overpayment.
Our review of SSA’s earnings records found the representative payees’ most recent annual earnings available to SSA staff at the time of the suspension decisions ranged from $12,252 to $70,036. Although the earnings indicate the representative payees may have been able to repay some of the debt, for the 16 cases, we found no evidence that SSA evaluated the representative payees’ overall financial conditions to determine whether they were able to pay. We reviewed SSA’s earnings file for TYs 2005 through 2007 and found all 16 representative payees had earnings in each of the TYs. Further, when the suspension decisions were made, SSA debt collection staff had available to them the TY 2005 earnings available for the 16 cases and TY 2006 earnings for 14 of the 16 cases. The pattern of continued earnings could indicate the representative payees had some ability to repay the debts.
Table 2 provides details of the representative payee earnings that were available to SSA staff when the overpayment was suspended and demonstrates that the representative payees’ earnings generally continued and were consistent over the
3-year period 2005 through 2007.
Table 2: Representative Payee Earnings Available When
Overpayments Were Suspended
Overpayment
Amount
Date
Suspended Debtor/
Representative Payee Relationship
Reported
Earnings
TY 2005
Reported
Earnings
TY 2006
Reported
Earnings
TY 2007
1 $3,835 03/15/07 Relative $46,915 $70,036 $70,625
2 5,209 03/15/07 Relative 46,915 70,036 70,625
3 10,515 03/15/07 Mother 14,181 18,247 23,494
4 10,866 06/04/07 Father 23,768 38,644 41,389
5 4,126 07/18/07 Mother 35,115 43,407 45,981
6 21,085 05/03/07 Relative 18,141 24,895 25,722
7 3,095 04/26/07 Relative 55,633 54,369 54,001
8 6,944 09/06/07 Mother 26,265 19,008 24,907
9 11,799 05/15/07 Mother 35,398 41,289 39,973
10 3,277 04/12/07 Mother 17,736 19,133 19,565
11 6,934 03/06/07 Mother 19,087 16,150 23,063
12 3,174 04/16/07 Mother 15,646 18,802 30,375
13 3,571 05/29/07 Father 55,357 12,252 45,594
14 6,049 10/27/06 Mother 18,180 21,091 20,590
15 3,170 09/28/07 Mother 25,867 22,446 23,251
16 5,016 08/03/07 Mother 28,710 16,908 26,643
Legend: Earnings shaded in purple indicate the debtor earnings available at the time the overpayment was suspended.
Because it appeared the parent/relative managed these benefits, we believe it is reasonable that SSA more aggressively collect overpayments from the representative payee when they have earnings.
Our prior report made two recommendations related to SSA improving its collection efforts from beneficiaries who had representative payees with earnings. First, we recommended that SSA consider clarifying or issuing further guidance for collecting overpayments from a representative payee who is a parent of a minor child/beneficiary. Second, we recommended that SSA personnel match representative payees’ earnings to suspended overpayment decisions to identify instances in which some repayment of the debt is possible. In responding to both recommendations, SSA stated it planned to implement the Non-Entitled Debtor (NeD) system to assist in recovering Title XVI debts from representative payees. However, SSA’s response did not state that an implementation date had been established for the Title XVI segment of NeD. The project was proposed for FY 2009 funding but was not approved. The project will be resubmitted for FY 2010 funding.
MORE THOROUGH COLLECTION EFFORTS MAY HAVE LOCATED DEBTORS
For 5 (10 percent) of the 50 suspended overpayments in which SSA recorded the reason for the decision as unable to locate or out of the country, we believe SSA may have been able to locate the debtors through their, or their representative payees’, employer. In some cases, SSA attempted to contact the debtor or the debtor’s representative payee but was unsuccessful. However, we did not find evidence in the five suspension decisions that SSA attempted to contact the debtors’ or representative payees’ employers. Accordingly, based on our results, we estimate that, in FY 2007, 120 debtors with unable to locate overpayment suspension decisions totaling about $749,240 may have been located by contacting the debtors’ or representative payees’ employer.
For one of the five suspension decisions, the beneficiary had earnings in TYs 2005 and 2006 that were available to SSA when the overpayment was suspended. Additionally, according to SSA’s earnings records, the beneficiary had earnings from the same employer for TYs 2005 through 2007. The other four beneficiaries were children or an adult/child who had a parent as their representative payee. Although SSA’s staff documented that the representative payees could not be located, TY 2005 and 2006 earnings were available when they made suspension decisions for all four of the representative payees. Further, the four representative payees had earnings from the same employer for TYs 2005 through 2007. We found no evidence that SSA attempted to locate the representative payees by contacting their employer.
SSA policy states that personnel should rely on information from internal sources to locate a debtor. SSA’s Supplemental Security Record (SSR) identifies whether a beneficiary has a representative payee and, if so, the representative payee’s name and Social Security number. Additionally, records in the Agency’s MEF indicate whether a beneficiary or representative payee had earnings posted to his or her record. If so, the MEF also provides the name and location of the employer who reported these earnings. According to SSA policy, if previous collection efforts were unsuccessful in locating the debtor, SSA staff is to contact the employer(s). However, SSA policy does not require that personnel exhaust all available resources to locate a debtor, therefore, SSA may not always use the MEF. We believe it is essential that SSA personnel use all internal sources to locate debtors. Accordingly, SSA should revise its policy to require the use of all internal sources when locating debtors.
Given that the beneficiary and the representative payees had the same employer for 3 consecutive years, we believe it is reasonable to expect that SSA staff could have located the beneficiary and representative payees had they contacted the employer. Had SSA been able to locate the debtors or the debtors’ representative payees, it may have been able to collect some portion of the debt.
In our prior report, we recommended that SSA instruct Debt Management and field office supervisors to periodically review overpayment decisions to ensure staff comply with policy. SSA agreed with the recommendation and took corrective actions. In our prior report, for 18.7 percent of suspension decisions in our unable to locate or out of the country sample, the debtors or representative payees had earnings histories that may have enabled SSA staff to locate them. In our current review, the percentage of suspension decisions with this issue had dropped to 10 percent. It appeared SSA had made progress in this area. However, we again emphasize that SSA should ensure that all efforts to locate debtors are exhausted before suspending overpayments.
BENEFICIARIES WITH MULTIPLE SUSPENSION DECISIONS IN A 7-DAY PERIOD
Occasionally, beneficiaries have multiple overpayments. If efforts to collect the overpayments are unsuccessful, SSA may decide to suspend collection efforts on all of the overpayments on a single day or over a period of just a few days. We tested 50 of 193 beneficiaries who had multiple decisions in a 7-day period (FY 2007) that totaled $3,000 or more. Our tests determined whether overpayments were split before the suspension decisions were processed and the decisions complied with policy.
For 2 of the 50 beneficiaries, the overpayments were split before the suspension decisions were processed. One beneficiary had two overpayments totaling $2,205 and $2,047. The $2,205 overpayment was split into $637 and $1,568 suspension decisions, and the $2,047 was split into $1,800 and $247 decisions. Another beneficiary’s $3,325 overpayment was split into suspension decisions of $1,500 and $1,825. All suspension actions occurred at field offices. Also, for both beneficiaries, we found no evidence that staff attempted the required collection efforts before suspending the overpayments.
By splitting the overpayments into separate suspension decisions—each under $2,000.01—management approval was no longer required. According to SSA policy, field office management is required to approve suspension decisions of $2,000.01 or more. We estimate in FY 2007, 160 beneficiaries had overpayment decisions split to dollar thresholds that did not require management approval that totaled $654,960. We acknowledge the error rate is minimal. However, SSA staff should be cognizant that overpayments should not be split when taking recovery actions.
Also, for 18 (36 percent) of the 50 beneficiaries, the suspension decisions were neither justified nor properly approved. Based on our results, we estimate in FY 2007, 1,380 beneficiaries had multiple suspension decisions totaling $6.30 million that did not comply with policy.
CONCLUSION AND RECOMMENDATIONS
SSA took action on three of the recommendations in our prior report. The Agency agreed with our other two recommendations, but funding limitations delayed development of an automated system that would address the recommendations. Although SSA completed corrective actions on three of the recommendations, we still found similar conditions identified in the prior report.
SSA did not always (1) document the justification for suspending overpayment collection efforts or (2) obtain the required management approval before suspending an overpayment. On occasion, SSA personnel suspended collection efforts when debtors or the debtors’ representative payees had reported earnings that may have enabled some repayment. Also, SSA personnel suspended collections of some debts and classified the debtors as unable to locate or out of the country even though we did not find evidence SSA attempted to contact the debtor or the debtor’s representative payee through his or her current employer.
Finally, we found similar issues with beneficiaries who had multiple decisions to suspend overpayment collections in a 7-day period. For 18 of the 50 beneficiaries, the suspension decisions were either not justified or properly approved.
To avoid duplication, we are not restating the unimplemented recommendations from our previous report. However, we reiterate the need for SSA to ensure staff complies with SSA requirements by requiring Debt Management supervisors to periodically review decisions to suspend collection of overpayments; ensure all overpayment suspension decisions exceeding established thresholds are reviewed and approved by appropriate SSA management officials, as required by policy; and periodically match debtors’ and representative payees’ earnings to suspended overpayments to identify instances in which some repayment of the debt is possible.
Additionally, we recommend that SSA:
1. Continue to urge staff compliance with existing policy when suspending Title XVI overpayments and hold accountable those employees who do not follow established criteria.
2. Consider revising its May 2009 policy to require the 2-PIN process for suspension decisions controlled by RECOOP.
3. Revise policy to require the use of all internal resources to locate a debtor.
AGENCY COMMENTS AND OIG RESPONSE
The Agency agreed with our recommendations. The full text of the Agency’s comments is included in Appendix D.
/s/
Patrick P. O’Carroll, Jr.
Appendices
APPENDIX A – Acronyms
APPENDIX B – Scope and Methodology
APPENDIX C – Sampling Methodology and Results
APPENDIX D – Agency Comments
APPENDIX E – OIG Contacts and Staff Acknowledgments
Appendix A
Acronyms
FY Fiscal Year
MEF Master Earnings File
NeD Non-Entitled Debtor
PIN Personal Identification Number
POMS Program Operations Manual System
RECOOP Recovery and Collection of Overpayments System
SSA Social Security Administration
SSI Supplemental Security Income
SSR Supplemental Security Record
TY Tax Year
U.S.C. United States Code
Appendix B
Scope and Methodology
We reviewed 200 randomly selected overpayment suspension decisions from Fiscal Year (FY) 2007 that were in suspended status as of July 3, 2008. We sampled 50 suspension decisions over $3,000 from each of the 3 suspension categories: (1) unable to locate or out of the country, (2) unable to repay, and (3) unwilling to repay. We also randomly selected 50 beneficiaries who had multiple suspension decisions in a 7-day period that totaled $3,000 or more. We reviewed each overpayment suspension decision for appropriateness as defined in the Program Operations Manual System. We also
• reviewed applicable Federal laws and regulations, as well as SSA’s policies and procedures, that govern overpayment suspensions under Title XVI of the Social Security Act;
• reviewed prior Office of the Inspector General reports that pertain to Supplemental Security Income overpayments;
• queried and reviewed overpayment suspension information from SSA’s Modernized Supplemental Security Income Claims System, Modernized Development Worksheet, and Debt Management System; and
• queried and reviewed debtors’ and representative payees’ earnings data from SSA’s Master Earnings File.
We performed our audit work in Atlanta, Georgia, and Baltimore, Maryland, from July 2008 to March 2009. The electronic data used for this audit were sufficiently reliable to meet the objectives of our audit. The entities audited were the Offices of the Deputy Commissioners for Budget, Finance and Management; Operations; and Retirement and Disability Policy. We conducted this performance audit 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 the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Appendix C
Sampling Methodology and Results
Sampling Methodology
In total, we reviewed 200 randomly selected overpayment suspension decisions from Fiscal Year (FY) 2007 that remained in suspended status as of July 3, 2008. Our review consisted of 50 suspension decisions over $3,000 from each of the 3 suspension categories: (1) unable to locate or out of the country, (2) unable to repay, or (3) unwilling to repay. We also randomly selected 50 beneficiaries who had multiple suspension decisions in a 7-day period that totaled $3,000 or more.
We selected the samples from data queried from segment 15 of the Supplemental Security Record (SSR). The SSR is divided into 20 segments based on the last 2 digits of the beneficiaries’ Social Security numbers. SSA has concluded the results determined from any 1 segment are representative of the entire 20 segments in the SSR.
Our audit tested more than one control attribute for each suspension decision. For example, we determined whether each decision was (1) adequately documented to evidence the reasoning/justification for the suspension and (2) approved by the appropriate level of management. As a result, some suspensions have more than one reportable issue and are included in one or more of the Sampling Results sections below. However, when estimating the overall number of suspension decisions with errors, we counted only one error for each case.
Suspension Decisions—$3,000 or Greater
Suspension Decision Total Number of Suspensions Total Dollars Number of Suspensions Equal to or Greater Than $3,000 Percent of Suspensions Equal to or Greater Than $3,000 Dollars of Suspensions Equal to or Greater Than $3,000 Percent of Suspension Dollars Equal to or Greater Than $3,000
Unwilling to Pay 1,581 $4,794,799 249 15.8 $1,853,300 38.7
Unable to Repay 2,585 $4,129,563 331 12.8 $2,453,458 59.4
Unable to Locate/Out of The Country 767 $960,577 63 8.2 $425,710 44.3
Supplemental Security Record - Segment 15 Data
Beneficiaries with Multiple Suspension Decisions
in a 7-Day Period that Totaled $3,000 or Greater
Total Number of Beneficiaries with Multiple Suspensions Total Dollars Number of Beneficiaries with Multiple Suspensions Totaling $3,000 or Greater Percent of Beneficiaries with Multiple Suspensions Totaling $3,000 or Greater Dollars of Beneficiaries with Multiple Suspensions Totaling $3,000 or Greater Percent of Beneficiary Dollars with Multiple Suspensions Totaling $3,000 or Greater
3,281 $3,176,278 193 5.8 $968,887 30.5
Population and Sample Selection
Suspension Decisions—$3,000 or Greater
Suspension Decision Population of Suspension Decisions Population Dollars Sample Size Sample Dollars
Unwilling to Pay 249 $1,853,300 50 $348,666
Unable to Repay 331 $2,453,458 50 $424,268
Unable to Locate/Out of the Country 63 $425,710 50 $336,615
Beneficiaries with Multiple Suspension Decisions
in a 7-Day Period that Totaled $3,000 or Greater
Beneficiaries Population of Beneficiaries Population Dollars Sample Size Sample Dollars
Multiple suspension decisions within a
7-day period 193 $968,887 50 $224,486
Sampling Results
Overall Results – Suspension Decisions in Which At Least One Attribute Did Not Comply with SSA’s Policies and Procedures
Suspension Decisions—$3,000 or Greater
Total Estimated Suspension Decisions – At Least One Attribute
Did Not Comply with SSA’s Policies and Procedures
Suspension Decision Non-Compliant Suspension Decisions Estimate to Universe (Decisions) Estimate to Universe (Dollars)
Unwilling to Pay 29 2,880 $22,651,040
Unable to Repay 12 1,580 $19,186,040
Unable to Locate/Out of the Country 26 660 $4,118,320
Total 67 5,120 $45,955,400
Beneficiaries with Multiple Suspension Decisions
in a 7-Day Period that Totaled $3,000 or Greater
Total Estimated Beneficiaries – At Least One Attribute
Did Not Comply with SSA’s Policies and Procedures
Beneficiaries Non-Compliant Suspension Decisions Estimate to Universe (Decisions) Estimate to Universe (Dollars)
Multiple Suspension Decisions in a
7-Day Period that Totaled $3,000 or Greater 18 1,380 $6,326,840
Suspension Decisions—$3,000 or Greater
Unwilling to Pay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 249 $1,853,300
Sample Size 50 $348,666
Suspension Decisions in Which at Least One Attribute Did Not Comply with Policies and Procedures 29 $213,057
Percentage of Sample 58.00 61.11
Estimate to Population 144 $1,132,552
Estimate to the Universe (20 Segments) 2,880 $22,651,040
Suspension Decisions—$3,000 or Greater
Unable to Repay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 331 $2,453,458
Sample Size 50 $424,268
Suspension Decisions in Which at Least One Attribute Did Not Comply with Policies and Procedures 12 $165,875
Percentage of Sample 24.00 39.10
Estimate to Population 79 $959,302
Estimate to the Universe (20 Segments) 1,580 $19,186,040
Suspension Decisions—$3,000 or Greater
Unable to Locate or Out of the Country Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 63 $425,710
Sample Size 50 $336,615
Suspension Decisions in Which at Least One Attribute Did Not Comply with Policies and Procedures 26 $162,814
Percentage of Sample 52.00 48.37
Estimate to Population 33 $205,916
Estimate to the Universe (20 Segments) 660 $4,118,320
Beneficiaries
Multiple Suspension Decisions in a 7-Day Period Totaling $3,000 or More
Beneficiaries Dollars
Total Segment Population 193 $968,887
Sample Size 50 $224,486
Beneficiaries in Which at Least One Suspension Decision Did Not Comply with Policies and Procedures 18 $73,284
Percentage of Sample 36.00 32.65
Estimate to Population 69 $316,342
Estimate to the Universe (20 Segments) 1,380 $6,326,840
SSA Did Not Always Maintain Documentation of Its Development of and Justification for Suspending Collection Efforts
Suspension Decisions—$3,000 or Greater
Total Estimated Suspension Decisions – SSA’s Collection Efforts Did Not Document the Justification for Suspending Collection Efforts
Suspension Decision Undocumented Suspension Decisions Estimate to Universe (Decisions) Estimate to Universe (Dollars)
Unwilling to Pay 19 1,900 $14,125,860
Unable to Repay 8 1,060 $4,833,320
Unable to Locate/Out of the Country 22 560 $3,578,520
Total 49 3,520 $22,537,700
Suspension Decisions—$3,000 or Greater
Unwilling to Pay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 249 $1,853,300
Sample Size 50 $348,666
Suspension Decisions Not Documented 19 $132,865
Percentage of Sample 38.00 38.11
Estimate to Population 95 $706,293
Estimate to the Universe (20 Segments) 1,900 $14,125,860
Suspension Decisions—$3,000 or Greater
Unable to Repay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 331 $2,453,458
Sample Size 50 $424,268
Suspension Decisions Not Documented 8 $41,779
Percentage of Sample 16.00 9.85
Estimate to Population 53 $241,666
Estimate to the Universe (20 Segments) 1,060 $4,833,320
Suspension Decisions—$3,000 or Greater
Unable to Locate or Out of the Country Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 63 $425,710
Sample Size 50 $336,615
Suspension Decisions Not Documented 22 $141,479
Percentage of Sample 44.00 42.03
Estimate to Population 28 $178,926
Estimate to the Universe (20 Segments) 560 $3,578,520
SSA Did Not Always Maintain Documentation of Management Review of Suspension Decisions as Required
Suspension Decisions—$3,000 or Greater
Total Estimated Suspension Decisions – SSA Management
Did Not Document Their Review for Suspension Decisions Greater than $3,000
Suspension Decision Unsupported Suspension Decisions Estimate to Universe (Decisions) Estimate to Universe (Dollars)
Unwilling to Pay 7 700 $8,595,600
Unable to Repay 3 400 $13,209,420
Unable to Locate/Out of the Country 6 160 $834,400
Total 16 1,260 $22,639,420
Suspension Decisions—$3,000 or Greater
Unwilling to Pay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 249 $1,853,300
Sample Size 50 $348,666
Suspension Decisions that Lacked Evidence of a Management Review 7 $80,840
Percentage of Sample 14.00 23.19
Estimate to Population 35 $429,780
Estimate to the Universe (20 Segments) 700 $8,595,600
Suspension Decisions—$3,000 or Greater
Unable to Repay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 331 $2,453,458
Sample Size 50 $424,268
Suspension Decisions that Lacked Evidence of a Management Review 3 $114,201
Percentage of Sample 6.00 26.92
Estimate to Population 20 $660,471
Estimate to the Universe (20 Segments) 400 $13,209,420
Suspension Decisions—$3,000 or Greater
Unable to Locate or Out of the Country Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 63 $425,710
Sample Size 50 $336,615
Suspensions When Debtor or Representative Payee Could Have Been Located Through Their Employer 6 $32,998
Percentage of Sample 12.00 9.80
Estimate to Population 8 $41,720
Estimate to the Universe (20 Segments) 160 $834,400
SSA Personnel Suspended Overpayments When Debtors or Representative Payees had Earnings
Suspension Decisions—$3,000 or Greater
Total Estimated Suspension Decisions–
Debtors or Representative Payees had Earnings
Suspension Decision Unsupported Suspension Decisions Estimate to Universe (Decisions) Estimate to Universe (Dollars)
Unwilling to Pay 16 1,600 $11,520,120
Unable to Repay 4 540 $1,717,420
Total 20 2,140 $13,237,540
Suspension Decisions—$3,000 or Greater
Unwilling to Pay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 249 $1,853,300
Sample Size 50 $348,666
Suspensions when Debtors or Representative Payees had Earnings 16 $108,349
Percentage of Sample 32.00 31.08
Estimate to Population 80 $575,006
Estimate to the Universe (20 Segments) 1,600 $11,520,120
Suspension Decisions—$3,000 or Greater
Unable to Repay Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 331 $2,453,458
Sample Size 50 $424,268
Suspensions When Debtors or Representative Payees had Earnings 4 $14,833
Percentage of Sample 8.00 3.50
Estimate to Population 26 $85,871
Estimate to the Universe (20 Segments) 540 $1,717,420
More Thorough Collection Efforts May Have Located Debtors
Suspension Decisions—$3,000 or Greater
Unable to Locate or Out of the Country Overpayment Suspension Decisions
Decisions Dollars
Total Segment Population 63 $425,710
Sample Size 50 $336,615
Suspensions When Debtor or Representative Payee Could Have Been Located Through Their Employer 5 $29,617
Percentage of Sample 10.00 8.80
Estimate to Population 6 $37,462
Estimate to the Universe (20 Segments) 120 $749,240
SSA Personnel Split the Overpayment to Circumvent Management Approval
Beneficiaries with Multiple Suspension Decisions
in 7–Day Period that Totaled $3000 or Greater
Beneficiaries Dollars
Total Segment Population 193 $968,887
Sample Size 50 $224,486
Beneficiaries with Split Overpayment Suspension Decisions 2 $7,578
Percentage of Sample 4.00 3.38
Estimate to Population 8 $32,748
Estimate to the Universe (20 Segments) 160 $654,960
Distribution of Reported Dollar Findings to the Applicable Recommendations
Description of Finding Recommendation Dollars
Suspension decisions with 1 or more noncompliance errors (from the sample of 150 suspension decisions). See page 3. Not applied $45,955,400
Add: Suspension decisions with 1 or more noncompliance errors (from the sample of 50 suspension decisions). See page 3. Not applied $6,326,840
Total: Suspension decisions with 1 or more noncompliance errors (from the combined sample of decisions 200). See page 3. Not applied $52,282,240
Less: SSA management did not document its review of suspension decisions. See page 5. Recommendation 2 $22,639,420
Net: Suspension decisions with one or more noncompliance error (from the combined sample of decisions 200). Recommendation 1 $29,642,820
Appendix D
Agency Comments
MEMORANDUM
Date: August 20, 2009 Refer
Refer To: S1J-3
To: Patrick P. O'Carroll, Jr.
Inspector General
From: Margaret J. Tittel /s/ Mike Gallagher for
Acting Chief of Staff
Subject: Office of the Inspector General (OIG) Draft Report, “Follow-Up: The Social Security Administration’s Controls Over Suspending Collection Efforts on Title XVI Overpayments” (A-04-09-19039)--INFORMATION
Thank you for the opportunity to review and comment on the draft report. We appreciate OIG’s efforts in conducting this review. Attached is our response to the report recommendations.
Please let me know if we can be of further assistance. Please direct staff inquiries to
Candace Skurnik, Director, Audit Management and Liaison Staff, at (410) 965-4636.
Attachment
COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL’S DRAFT REPORT, “FOLLOW-UP: THE SOCIAL SECURITY ADMINISTRATION’S CONTROLS OVER SUSPENDING COLLECTION EFFORTS ON TITLE XVI OVERPAYMENTS”
(A-04-09-19039)
Our responses to your specific recommendations are as follows.
Recommendation 1
Continue to urge staff compliance with existing policy when suspending Title XVI overpayments and hold accountable those employees who do not follow established criteria.
Comment
We agree. We recently released reminders to the field offices of the policy they should follow when making overpayment suspension decisions. We are developing additional overpayment training for release in December 2009 and will explore ways to hold employees accountable for not following proper overpayment suspension procedures.
Recommendation 2
Consider revising the May 2009 policy to require the 2-PIN process (management approval) for suspension decisions controlled by RECOOP.
Comment
We agree. We will investigate the feasibility of requiring a 2-PIN process for suspension decisions controlled by RECOOP. We expect to make a decision by November 2009.
Recommendation 3
Revise policy to require the use of all internal resources to locate a debtor.
Comment
We agree. We will amend our policy to emphasize the importance of exhausting all resources when attempting to locate a debtor. We expect to issue a revised policy by November 2009.
Appendix E
OIG Contacts and Staff Acknowledgments
OIG Contacts
Kimberly A. Byrd, Director, Atlanta Audit Division
Frank Nagy, Audit Manager
Acknowledgments
In addition to those named above:
Valerie Ledbetter, Senior Auditor
For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig or contact the Office of the Inspector General’s Public Affairs Staff Assistant at (410) 965-4518. Refer to Common Identification Number
A-04-09-19039.
DISTRIBUTION SCHEDULE
Commissioner of Social Security
Office of Management and Budget, Income Maintenance Branch
Chairman and Ranking Member, Committee on Ways and Means
Chief of Staff, Committee on Ways and Means
Chairman and Ranking Minority Member, Subcommittee on Social Security
Majority and Minority Staff Director, Subcommittee on Social Security
Chairman and Ranking Minority Member, Committee on the Budget, House of Representatives
Chairman and Ranking Minority Member, Committee on Oversight and Government Reform
Chairman and Ranking Minority Member, Committee on Appropriations, House of Representatives
Chairman and Ranking Minority, Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations,
House of Representatives
Chairman and Ranking Minority Member, Committee on Appropriations, U.S. Senate
Chairman and Ranking Minority Member, Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations, U.S. Senate
Chairman and Ranking Minority Member, Committee on Finance
Chairman and Ranking Minority Member, Subcommittee on Social Security Pensions and Family Policy
Chairman and Ranking Minority Member, Senate Special Committee on Aging
Social Security Advisory Board
Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit (OA), Office of Investigations (OI), Office of the Counsel to the Inspector General (OCIG), Office of External Relations (OER), and Office of Technology and Resource Management (OTRM). To ensure compliance with policies and procedures, internal controls, and professional standards, the OIG also has a comprehensive Professional Responsibility and Quality Assurance program.
Office of Audit
OA conducts financial and performance audits of the Social Security Administration’s (SSA) programs and operations and makes recommendations to ensure program objectives are achieved effectively and efficiently. Financial audits assess whether SSA’s financial statements fairly present SSA’s financial position, results of operations, and cash flow. Performance audits review the economy, efficiency, and effectiveness of SSA’s programs and operations. OA also conducts short-term management reviews and program evaluations on issues of concern to SSA, Congress, and the general public.
Office of Investigations
OI conducts investigations related to fraud, waste, abuse, and mismanagement in SSA programs and operations. This includes wrongdoing by applicants, beneficiaries, contractors, third parties, or SSA employees performing their official duties. This office serves as liaison to the Department of Justice on all matters relating to the investigation of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.
Office of the Counsel to the Inspector General
OCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCIG also advises the IG on investigative procedures and techniques, as well as on legal implications and conclusions to be drawn from audit and investigative material. Also, OCIG administers the Civil Monetary Penalty program.
Office of External Relations
OER manages OIG’s external and public affairs programs, and serves as the principal advisor on news releases and in providing information to the various news reporting services. OER develops OIG’s media and public information policies, directs OIG’s external and public affairs programs, and serves as the primary contact for those seeking information about OIG. OER prepares OIG publications, speeches, and presentations to internal and external organizations, and responds to Congressional correspondence.
Office of Technology and Resource Management
OTRM supports OIG by providing information management and systems security. OTRM also coordinates OIG’s budget, procurement, telecommunications, facilities, and human resources. In addition, OTRM is the focal point for OIG’s strategic planning function, and the development and monitoring of performance measures. In addition, OTRM receives and assigns for action allegations of criminal and administrative violations of Social Security laws, identifies fugitives receiving benefit payments from SSA, and provides technological assistance to investigations.