OFFICE OF
THE INSPECTOR GENERAL

SOCIAL SECURITY ADMINISTRATION

FOLLOW-UP: THE SOCIAL SECURITY
ADMINISTRATION’S CONTROLS OVER
THE WRITE-OFF OF
TITLE XVI OVERPAYMENTS

March 2010

A-04-09-19138

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: March 24, 2010 Refer To:

To: The Commissioner

From: Inspector General

Subject: Follow-up: The Social Security Administration’s Controls over the Write-off of Title XVI Overpayments (A-04-09-19138)

OBJECTIVE

Our objective was to determine whether the Social Security Administration’s (SSA) decisions to write off Title XVI overpayments were in accordance with its policies and procedures. Additionally, we determined the status of corrective actions SSA had taken to address recommendations in our January 2006 report, The Social Security Administration’s Controls over the Write-Off of Title XVI Overpayments
(A-04-05-15041).

BACKGROUND

Title XVI of the Social Security Act established the Supplemental Security Income (SSI) program in 1972, effective January 1, 1974, 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 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, vary over time, SSI payments may be error-prone and result in overpayments.

When SSA determines it has overpaid a recipient, it first attempts full and immediate recovery of the overpayment while affording the debtor due process in resolving the overpayment. If these efforts fail, SSA offsets the overpayment against any current and future payments. For those SSA debtors not receiving benefits, SSA attempts to negotiate a repayment agreement. SSA may also attempt to collect the overpayment from other Federal benefits or by offsetting Federal income tax refunds. In some

situations, SSA may waive recovery of an overpayment. Additionally, in certain circumstances, when SSA determines an overpayment is not collectible, it may elect to terminate future collection efforts and write off the debt.

In Fiscal Year (FY) 2008, SSA’s field offices wrote off about $89 million in SSI overpayments. Generally, SSA field office staff writes off overpayments when

• SSA is under court order not to collect an overpaid amount,
• an administrative law judge declares an overpayment is uncollectible,
• a beneficiary is deceased and all proper efforts to collect the overpayment have proved fruitless, or
• there was early delivery of an SSI check in the month of the recipient’s death.

To complete a write-off action for the specified circumstances, field office personnel must assign a specific accounting code (“N” transaction code) to the overpayment. However, this accounting code does not provide any further classification as to the specific reason for the decision. For example, without written documentation, we were unable to determine whether the overpayment was written off because the debtor was bankrupt or deceased. SSA policies and procedures require that all overpayment write off decisions be justified; documented; and, when certain dollar thresholds are met, approved. Moreover, Agency policies provide specific instructions for writing off overpayments for debtors who are bankrupt or deceased.

Our January 2006 report made recommendations to address control weaknesses in SSA’s process of writing off Title XVI overpayments. In response to the report, SSA agreed to take the following actions.

• Issue a reminder to SSA field office personnel to fully develop and document overpayment write-off decisions, as required by POMS, and implement a mechanism to monitor their compliance.

• Issue a reminder and, if necessary, further guidance to SSA field office personnel on the proper disposition of overpayments resulting from Goldberg-Kelly type payments.

• Ensure all uncollectible overpayment decisions exceeding established thresholds are reviewed and approved by appropriate SSA management officials, as required by POMS.

See Appendix B for the scope and methodology of our review.

RESULTS OF REVIEW

SSA took action on the three recommendations in our January 2006 report. However, our current review again noted that SSA personnel did not always comply with Agency policies and procedures to ensure their decisions to write off SSI overpayments were appropriate. SSA policies and procedures require that all write-offs be justified; documented; and, when certain dollar thresholds are met, approved. However, our review of 250 randomly selected decisions and the 4 highest dollar decisions determined SSA did not always document a justification for the write-off or the required management approval. Additionally, in some cases, SSA incorrectly wrote off overpayments.

In total, 218 (87 percent) of the 250 randomly selected overpayment write-offs had
1 or more compliance errors. As such, we project SSA personnel did not fully comply with SSA policies and procedures for 56,448 FY 2008 overpayment write-offs totaling about $70.6 million. See Appendix C for our projection methodology. Additionally, three of the four highest dollar overpayment write-off decisions, totaling $167,318, did not fully comply with SSA’s policies and procedures.

We recognize some compliance errors may not result in inappropriate write-off decisions. However, because the justifications were not adequately documented, we could not determine whether the decisions were reasonable.

The majority (76 percent) of write-off errors that lacked justification were related to a beneficiary’s death. Given this continued high error rate, we believe SSA must either do more to ensure staff compliance or reevaluate the value of the policy. If SSA

determines the current policy requirements are not cost-beneficial, SSA should revise its policy to ensure the best use of its resources while still pursuing collectible overpayments.

SSA PERSONNEL DID NOT ALWAYS DOCUMENT THEIR DEVELOPMENT OF, AND JUSTIFICATION FOR, THE WRITE-OFF OF TITLE XVI OVERPAYMENTS

SSA personnel did not always comply with Agency policies and procedures to ensure Title XVI overpayment write-offs were appropriate. SSA’s policies and procedures require that the development of, and justification for, the write-offs be documented. Our review included 250 randomly selected decisions and the 4 highest dollar overpayment write-off decisions from FY 2008. For 205 (82 percent) of the 250 randomly selected write-off decisions, SSA personnel did not maintain relevant and sufficient documentation to justify the decision. Based on our results, we project 55,524 cases, totaling about $67.2 million, were not adequately documented (see Appendix C).

SSA policies require that SSA personnel take certain actions before writing off a Title XVI overpayment. For example, before writing off an overpayment based on a debtor’s bankruptcy proceeding or death, specific actions are required to ensure recovery of the overpayment is not feasible. Further, SSA’s policies and procedures require that staff document the development of, and justification for, the uncollectible decision.

Our 2006 report recommended that SSA issue a reminder to field office personnel to fully develop and document overpayment write-off decisions and implement a mechanism to monitor their compliance to address these matters. SSA issued an Administrative Message in June 2007 and as recently as April and June 2009, revised overpayment decision policies—which now emphasize that overpayment decisions must be documented. Because these new policies were issued after our audit period, we did not determine whether they resulted in improved employee compliance. However, our current review identified many 2008 write-off decisions that still lacked documentation to justify the decisions.

Write-off Decisions for Debtors in Current Pay Status

For 24 (12 percent) of the 205 undocumented write-off decisions, the debtors were receiving SSI or other SSA benefits at the time of our audit. Further, 15 of the 24 write off decisions were made when the beneficiary was in current pay status. We found no evidence to justify the write-off decisions, but we determined that these individuals were not deceased and had not filed for bankruptcy protection. The write offs for these 24 cases totaled $25,389. Because SSA’s justifications for the decisions were not adequately documented, we could not determine whether the overpayments should have been written off as uncollectible or some or all of the overpayments should have been deemed collectible and the debt offset against future SSA benefits.

Write-off Decisions for Deceased Debtors

In 181 (72 percent) of the 250 randomly selected write-off decisions, SSA’s records indicated the debt was written off after the recipient’s death. However, 155 (86 percent) of the 181 decisions lacked evidence that the uncollectible overpayment was written off according to SSA’s policy, which states a deceased beneficiary’s estate is liable for the debt. The total amount written off on these cases was $459,463. Moreover, 29 of the 155 write-off decisions were for overpayments of $5,000 or more, which totaled $254,905.

When the deceased beneficiary’s debt is $5,000 or less, SSA staff can write off the debt after a limited review of the case. Specifically, SSA policy requires that only a notice of overpayment be sent to the estate. SSA instructions state that in Title XVI death cases involving an overpayment, the Agency should terminate collection actions unless (1) there is a responsible payee or spouse, (2) there is a sponsor of an “alien recipient,” (3) a refund has been received, (4) there is a “complex overpayment issue,” or (5) fraud is involved. For deceased beneficiaries with debt over $5,000, SSA policy requires that staff determine whether the debtor has an estate. If an estate exists, further actions should be taken to determine whether any recovery from the estate is possible.

For 155 (76 percent) of the 205 cases lacking justification, SSA records indicated the beneficiary was deceased. Given the continued high error rate, we believe SSA must do more to ensure staff compliance. That is, the Agency should ensure staff notifies the estate of the overpayment and, if required, investigate the possibility of recovering some of the debt from the estate. However, if SSA determines these actions are not
cost-beneficial, the Agency should consider revising policy to establish procedures that would best use SSA resources when collecting overpayments.

Write-off Decisions when Debtors’ Representative Payees had Earnings

For 18 (7 percent) of the 254 write-off decisions (250 randomly selected and 4 over $50,000), totaling $102,853, the debtor’s representative payee, who may have been responsible for the overpayment, may have had sufficient earnings to repay some or all of the debt. In these 18 cases, we found no evidence justifying SSA’s decision to write off the debt. Without evidence, we could not conclude whether the overpayment should be recovered from the representative payee or written off.

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.

Our review of SSA’s earnings records found the representative payees’ most recent annual earnings available to SSA staff at the time of the write-off decisions ranged from $12,170 to $52,090. Although the earnings indicate the representative payees may have been able to repay some of the debt, for the 18 cases, we found no evidence that SSA evaluated their overall financial conditions to determine their ability to pay. We reviewed SSA’s Master Earnings File for Tax Years (TY) 2006 through 2008 and found all 18 representative payees had earnings over $10,000 in each of the TYs. Further, when the write-off decisions were made, SSA field office staff had access to the TY 2006 earnings for all 18 cases and TY 2007 earnings for 10 of the 18 cases. The pattern of continued earnings could indicate the representative payees had some ability to repay the debts.

Table 1 provides details of the representative payee earnings that were available to SSA staff when the overpayment was written off and demonstrates that the representative payees’ earnings generally continued and were consistent over the
3-year period 2006 through 2008.

Table 1: Representative Payee Earnings Available When
Overpayments Were Written Off

Case
Number
Overpayment Amount
Date of Write-off Reported Earnings TY 2006 Reported Earnings TY 2007 Reported Earnings TY 2008
1 $7,937 12/19/2007 $52,090 $52,925 $57,241
2 $1,152 12/27/2007 $45,601 $55,819 $58,116
3 $2,283 1/10/2008 $42,019 $36,738 $37,147
4 $2,865 2/29/2008 $32,299 $41,847 $48,348
5 $5,310 7/28/2008 $32,112 $34,159 $37,147
6 $729 1/7/2008 $29,444 $31,503 $33,549
7 $6,080 8/4/2008 $24,049 $39,356 $37,073
8 $3,361 6/13/2008 $23,569 $18,528 $11,018
9 $252 4/29/2008 $22,992 $14,809 $17,951
10 $2,074 7/8/2008 $22,820 $17,949 $22,460
11 $8,703 7/7/2008 $21,568 $22,833 $34,017
12 $55,332 10/25/2007 $20,820 $19,419 $12,285
13 $250 7/28/2008 $19,298 $18,712 $16,105
14 $812 7/10/2008 $18,681 $18,685 $18,054
15 $377 6/9/2008 $16,180 $15,222 $25,175
16 $2,812 3/20/2008 $15,271 $12,555 $12,446
17 $2,291 11/27/2007 $12,656 $13,147 $13,510
18 $233 11/23/2007 $12,170 $21,943 $22,716
Earnings in purple indicate the debtor earnings available when the overpayment was written off.

Our April 2005 report, The Social Security Administration’s Controls over the Suspension of Title XVI Overpayment Collection Efforts, 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.

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 2010 funding but was not approved. The project will be resubmitted for FY 2011 funding.

WRITE-OFF DECISIONS WERE INCORRECT

For 12 (5 percent) of the 250 randomly selected write-off decisions, staff incorrectly wrote off the overpayments as uncollectible. The 12 write-offs totaled $36,649. According to SSA policy, field office staff should only write off overpayments when (1) a court order prohibits SSA from collecting the overpayment, (2) an administrative law judge declares an overpayment is uncollectible, (3) the beneficiary is deceased and SSA has exhausted all efforts to collect the overpayment, or (4) there was an early delivery of an SSI check in the month of the recipient’s death.

SSA staff wrote off overpayments for various reasons not set forth in policy. For example, staff wrote off erroneous payments when SSA determined a beneficiary was in a nursing home and unable to repay the debt or out of the country. Staff also used write-off decisions to adjust overpayment amounts and delete erroneous overpayments.

SSA MANAGEMENT DID NOT ALWAYS DOCUMENT ITS REVIEW OF WRITE-OFF DECISIONS, AS REQUIRED

From our sample of 250 randomly selected overpayment write-offs, 125 (50 percent) required a supervisory review because the overpayment amount exceeded established dollar thresholds. Of the 125 write-off decisions, 26 (21 percent) lacked evidence of the required supervisory review. The overpayments written off on these 26 decisions totaled $121,092. Field office staff processed the write-off actions for all 26 cases. Additionally, three of the four write-offs greater than $50,000, totaling $167,318, were not approved in accordance with SSA national instructions.

Field office personnel may write off uncollectible overpayments under $2,000 without supervisory approval. However, write-off decisions for overpayments at least $2,000.01 but less than $20,000 must have field office management approval. The overpayments written off on these 26 cases ranged from $2,116 to $18,850. Field office management review and approval is documented through a “2-PIN” process. Non-supervisory staff must enter a personal identification number (PIN) to access and develop the write-off decision in SSA’s Modernized Supplemental Security Income Claims System (PIN 1). Then, field office management must enter a PIN in the system to authorize posting the decision (PIN 2).

SSA staff explained that write-off 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, write-off 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 23 of the 26 decisions had documentation and/or decisional errors.

We found a similar issue regarding the approval of overpayment decisions in our September 2009 report, Follow-up: The Social Security Administration’s Controls over Suspending Collection Efforts on Title XVI Overpayments (A-04-09-19039). In that report, SSA agreed that policy in effect during our audit period required the 2-PIN approval process for overpayment decisions made at the field office level. However, SSA further explained policy was revised in May 2009 to state that the 2-PIN approval process did not apply for suspension decisions controlled by RECOOP. Because the overpayment decisions controlled through RECOOP had a high compliance error rate, we recommended that SSA reconsider the revision to its May 2009 policy. Given that our current review also found write-off decisions controlled though RECOOP had a high compliance error rate, we recommend that SSA reconsider its policy in which the 2-PIN process does not apply to overpayment decisions controlled through RECOOP.

We also reviewed the four highest dollar write-off decisions. All four of the write-offs exceeded $50,000 and totaled $259,264. For two of the four decisions, we found no evidence of the required management approval. One other case was approved in accordance with regional policy but was not consistent with SSA’s national policy. The overpayments for the write-off decisions exceeded $20,000 and required the approval of an Assistant Regional Commissioner for Management and Operations Support (ARC-MOS). SSA’s records indicated that the three beneficiaries were deceased at the time of the write-off decision. Table 2 details the three write-offs exceeding $20,000 for which we found no evidence of the required ARC-MOS approval.
Table 2: Uncollectible Decisions that Exceeded $20,000
Overpayment Amount Write-off Date Date of Death
1 $55,332 10/25/2007 06/29/1996
2 $56,219 10/18/2007 02/26/2007
3 $55,767 10/25/2007 07/30/2005
$167,318

In the first case, SSA field office management wrote the case off to suspend collection efforts pending an Office of the Inspector General criminal investigation. SSA explained that ARC MOS approval was not obtained because the field office did not intend to actually write-off the overpayment. A criminal conviction resulted and restitution of the overpayment was ordered. SSA should reverse the write-off.

In the second case, SSA wrote off the overpayment as part of an accounting adjustment to move the overpayment from the deceased beneficiary’s record to the spouse’s record. SSA staff explained that, because the action was not a true write-off, they believed ARC MOS approval was not required.

In the third case, SSA’s efforts to locate the deceased beneficiary’s estate were unsuccessful. The write-off was then approved by regional staff from the Center for Program Support in accordance with regional policy. This regional policy delegated authority to approve overpayment write-offs exceeding $20,000 to the Center for Program Support Specialist—even though national SSA policy required that the
ARC-MOS approve these write-offs.

Our prior report recommended that SSA ensure all uncollectible overpayment decisions exceeding established thresholds are reviewed and approved by appropriate SSA management officials, as required by POMS. SSA issued an Administrative Message reminding staff that management review and approval of overpayment write off decisions was required and important. However, our current review found high-dollar write-off decisions still lacked appropriate management approval.

CONCLUSION AND RECOMMENDATIONS

SSA did not always follow established policies and procedures to ensure Title XVI
write-off decisions were appropriate. Specifically, SSA staff did not always document their justification for classifying an overpayment as uncollectible. For cases that lacked evidence supporting the write-offs, we found situations where the debt may have been collectible. For example, some debtors had a representative payee with sufficient earnings to prompt case development and generate debt repayment. Additionally, decisions developed by field office staff lacked evidence of a supervisory review.

Although SSA took corrective actions on the recommendations in our prior report, we found similar conditions existed in our current audit. To avoid duplication, we are not restating the recommendations from our previous report. However, we reiterate the need for SSA to ensure (1) field office staff complies with SSA requirements by fully developing and documenting overpayment write-off decisions and (2) all overpayment write-off decisions exceeding established thresholds are reviewed and approved by appropriate SSA management officials, as required by policy.

Additionally, we recommend that SSA:

1. Continue to urge staff compliance with existing policy when writing off Title XVI overpayments and hold accountable those employees who do not follow established criteria.

2. Determine whether the policy and procedures for collecting overpayments from deceased beneficiaries are an efficient use of SSA resources. If necessary, revise the current policy.

3. Implement a mechanism to ensure SSA field office personnel fully develop and document overpayment write-off decisions, as required by POMS.

4. Reverse the $55,332 overpayment write-off for which restitution has been ordered.

5. Determine whether it is permissible for regional offices to delegate write-off authority for debts greater than $20,000 to staff other than the ARC-MOS.

AGENCY COMMENTS

SSA agreed with all our recommendations. See Appendix D for the full text of SSA’s comments.

/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

ARC-MOS Assistant Regional Commissioner for Management and Operations Support
C.F.R. Code of Federal Regulations
FY Fiscal Year
NeD Non-Entitled Debtor
OPDD Overpayment Decision Data
PIN Personal Identification Number
POMS Program Operations Manual System
RECOOP Recovery and Collection of Overpayments System
SSA Social Security Administration
SSI Supplemental Security Income
TY Tax Year

Appendix B
Scope and Methodology

To accomplish our objectives, we reviewed 254 Title XVI overpayments written off by Social Security Administration (SSA) field offices in Fiscal Year (FY) 2008. This total consisted of (1) 125 randomly selected write-offs that ranged from $200.01 through $2,000, (2) 125 randomly selected write-offs between $2,000.01 and $50,000, and
(3) 4 write-offs $50,000.01 or greater. We selected our population from SSA’s Overpayment Decision Data (OPDD) segment of the Supplemental Security Record. Specifically, from the OPDD segment, we selected transactions with an “N” “type of recovery code,” which indicates SSA deemed the overpayment uncollectible. Within this subset, we selected transactions with a blank “recovery transaction code,” which indicates an SSA field office deemed the overpayment uncollectible.

We reviewed each overpayment write-off decision for appropriateness, as defined in SSA’s Program Operations Manual System (POMS). Our audit tested more than one control attribute for each write-off decision. We determined whether the field office adequately documented each decision to evidence the (1) reason/justification for the write-off and (2) approval by the appropriate level of management. As a result, some write-offs have more than one reportable issue and are included as audit findings in one or more sections of the report. However, when projecting the overall number of write offs with errors, we counted only one error for each case. We made all projections at the 90-percent confidence level. Additional information regarding our sampling methodology and results are in Appendix C.

We also:

• Reviewed applicable sections of SSA POMS that govern overpayment write-offs under Title XVI of the Social Security Act.

• Reviewed previous Office of the Inspector General reports pertaining to Supplemental Security Income overpayments.

• Queried and reviewed overpayment write-off information from SSA’s Supplemental Security Record, Modernized Supplemental Security Income Claims System, Modernized Development Worksheet, and Debt Management System.

• Queried and reviewed SSA’s Master Earnings File.

• Queried U.S. Bankruptcy Court records available in its Public Access to Court Electronic Records system.
We performed our audit work in Atlanta, Georgia, from April through September 2009. The electronic data used for this audit were sufficiently reliable to meet our audit objectives. The entities audited were the Offices of the Deputy Commissioners for Budget, Finance and Management; Operations; and Retirement and Disability Policy. We conducted our 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 reasonable basis for our findings and conclusions based on our audit objectives.

Appendix C
Sampling Methodology and Results

SAMPLING METHODOLOGY

In total, we reviewed a sample of 254 Title XVI overpayment write-off decisions from Fiscal Year (FY) 2008. Our sample consisted of (1) 125 randomly selected write-offs that ranged from $200.01 through $2,000, (2) 125 randomly selected write-offs between $2,000.01 and $50,000, and (3) 4 write-offs $50,000.01 or greater. We selected our population from the Social Security Administration’s (SSA) Overpayment Decision Data (OPDD) segment of the Supplemental Security Record.

Specifically, from the OPDD segment, we selected transactions with an “N” “type of recovery code,” which indicates SSA deemed the overpayment uncollectible. Within this subset, we selected transactions with a blank “recovery transaction code,” which indicates an SSA field office deemed the overpayment uncollectible. The following chart details our sample selections.

Strata: Write-off Decisions by Dollar Amount Population Decisions Population Dollars Sample Size Sample Dollars
$200.01 to $2,000 56,280 $43,367,329 125 $85,660
$2,000.01 to $50,000 8,889 45,329,050 125 598,084
$50,000.01 and Greater 4 259,264 4 259,264
Totals 65,173
$88,955,643 254
$943,008

Our audit tested more than one control attribute for each write-off decision. We determined whether the field office adequately documented each decision to evidence the (1) reason/justification for the write-off and (2) approval by the appropriate level of management. As a result, some write-offs have more than one reportable issue and are included as audit findings in one or more sections of the report. However, when projecting the overall number of write-offs with errors, we counted only one error for each case.

We made all projections at the 90-percent confidence level.

SAMPLING RESULTS

Overall Results – Write-off Decisions with at Least One Compliance Error

Results and Stratified Projections of Attribute and Variable Appraisals

Write-off Decisions with at Least One Compliance Error – Decisions Between $200.01 and $50,000
Attribute Appraisal Projections
Population and Sample Data Decisions
Total Population 65,169
Sample Size 250
Write-off Decisions with at Least One Compliance Error – Decision Did Not Comply with SSA’s Policies and Procedures 218
Projection to Population Projections
Lower Limit 53,570
Point Estimate 56,448
Upper Limit 59,326
Variable Appraisal Projections
Population and Sample Data Dollars
Total Population $88,696,379
Sample Size $683,744
Write-off Decisions with at Least One Compliance Error – Decision Did Not Comply with SSA’s Policies and Procedures $608,747
Projection to Population Projections
Lower Limit $64,737,995
Point Estimate $70,622,614
Upper Limit $76,507,232

Write-off Decisions with at Least One Compliance Error –
Decisions $50,000.01 and Greater
Population and Sample Data DECISIONS DOLLARS
Total Population 4 $259,264
Sample Size 4 $259,264
Write-off Decisions with at Least One Compliance Error – Decision Did Not Comply with SSA’s Policies and Procedures
3
$167,318

SSA Did Not Always Maintain Documentation of Its Development of, and Justification for, Writing Off the Overpayment

Results and Stratified Projections of Attribute and Variable Appraisals

No Evidence Documenting the Development or Justification for Writing Off the Overpayment – Decisions Between $200.01 and $50,000
Attribute Appraisal Projections
Population and Sample Data Decisions
Total Population 65,169
Sample Size 250
Decisions with No Evidence Documenting the Development or Justification for Writing Off the Overpayment 205
Projection to Population Projections
Lower Limit 52,626
Point Estimate 55,524
Upper Limit 58,422
Variable Appraisal Projections
Population and Sample Data Dollars
Total Population $88,696,379
Sample Size $683,744
No Evidence Documenting the Development or Justification for Writing Off the Overpayment $561,280
Projection to Population Projections
Lower Limit $61,151,145
Point Estimate $67,247,149
Upper Limit $73,343,153

Appendix D
Agency Comments
MEMORANDUM

Date: March 4, 2010 Refer
Refer To: S1J-3

To: Patrick P. O'Carroll, Jr.
Inspector General

From: James A. Winn /s/
Executive Counselor to the Commissioner

Subject: Office of the Inspector General (OIG) Draft Report, “Follow-Up: The Social Security Administration’s Controls over the Write-Off of Title XVI Overpayments” (A-04-09-19138)--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 (OIG) DRAFT REPORT, “FOLLOW-UP: THE SOCIAL SECURITY ADMINISTRATION’S CONTROLS OVER THE WRITE-OFF OF TITLE XVI OVERPAYMENTS”
(A-04-09-19138)

We reviewed the draft report. In the report you acknowledge that we revised overpayment policies in April and June of 2009. We took these actions based on recommendations from your 2006 report, (A-04-05-15041) “The Social Security Administration’s Controls over the Write-Off of Title XVI Overpayments.”

We believe that you should delete the following statement on page 4 of the report, “We acknowledge the new instructions SSA issued, but continue to believe field office staff must be more diligent when processing these actions and should be held accountable if they do not comply.” This statement is not factually based or supported by audit work. The audit period is FY 2008. Your statement reflects reviews of 2008 overpayment cases that pre-date the April 2009 and June 2009 policy revisions.

Our responses to the specific recommendations are below.

Recommendation 1

Continue to urge staff compliance with existing policy when writing off Title XVI overpayments and hold accountable those employees who do not follow established criteria.

Comment

We agree. We have already issued revised overpayment policies in 2009 and we will continue to urge staff to comply with existing policies regarding writing off Title XVI overpayments. As a reminder, we will issue an Administrative Message (AM) on the subject in FY ‘10.

Additionally, employees who do not follow the current policies and procedures on writing off Title XVI overpayments are held accountable. If it is determined that actions are improper, employees can be subject to disciplinary actions under existing agency guidelines.

Recommendation 2

Determine whether the policy and procedures for collecting overpayments from deceased beneficiaries are an efficient use of SSA resources. If necessary, revise the current policy.

Comment

We agree and have taken action to ensure that our current policies for collecting overpayments from deceased beneficiaries are an efficient use of our resources. We reviewed our policies and procedures and revised our policy instructions in June 2009 to include new policies for 1) when we will pursue recovery from an estate, a spouse, a representative payee, or alien sponsor, 2) when to refer recovery from an estate to the Department of Justice (we also added that estate development is the same for Title II and Title XVI), and 3) when to hold a representative payee solely liable for certain payments received after the month of the recipient’s death.

Recommendation 3

Implement a mechanism to ensure SSA field office personnel fully develop and document overpayment write-off decisions, as required by POMS.

Comment

We agree that a POMS compliant mechanism is essential to ensure accurate overpayment write-off decisions. The Onsite Security Control and Audit Review (OSCAR) process is currently used to evaluate overpayment write-off determinations. Regional offices and field office management personnel will continue to use the OSCAR process to develop and document overpayments.

Recommendation 4

Reverse the $55,332 overpayment write-off for which restitution has been ordered.

Comment

We agree. We will take the necessary action to reverse the $55,332 overpayment write-off due to the order for restitution.

Recommendation 5

Determine whether it is permissible for regional offices to delegate write-off authority for debts greater than $20,000 to staff other than the ARC-MOS.

Comment

We agree. We will evaluate the current policy, make any necessary changes, and ensure consistent national application of this write-off authority.
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:

Lisa M. Swanson, 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-04-09-19138.

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.