SOCIAL SECURITY ADMINISTRATION

THE SOCIAL SECURITY
ADMINISTRATION'S PROCEDURES FOR
ADDRESSING EMPLOYEE-RELATED
ALLEGATIONS IN REGION V

August 2004

A-05-04-14086

AUDIT REPORT

Mission

We improve SSA programs and operations and protect them against fraud, waste, and abuse by conducting independent and objective audits, evaluations, and investigations. We provide timely, useful, and reliable information and advice to Administration officials, the 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

By conducting independent and objective audits, investigations, and evaluations, we are agents of positive change striving for continuous improvement in the Social Security Administration's programs, operations, and management and in our own office.

MEMORANDUM

Date: August 30, 2004

To: James F. Martin
Regional Commissioner Chicago

From: Assistant Inspector General for Audit

Subject: The Social Security Administration's Procedures for Addressing Employee-Related Allegations in Region V (A-05-04-14086)

OBJECTIVE

Our objectives were to determine whether the Chicago Regional Office (RO) complied with the Social Security Administration's (SSA) policies and procedures for addressing employee-related allegations and referred all employee-related allegations that should have been referred to the Office of the Inspector General (OIG).

BACKGROUND

SSA receives various types of allegations related to its programs, the misuse of Social Security numbers (SSN) and employee conduct. SSA receives allegations from employees, the public, congressional inquiries, internal security reviews, and the OIG. Allegations that involve actions on the list of alleged or suspected employee criminal violations must be referred to the OIG. This list is attached as Appendix D. Allegations concerning SSA employees are significant because of the potential losses to SSA's programs and the corresponding negative public impact. In determining the validity of allegations, SSA is required to obtain sufficient evidence to support or remove suspicion that criminal violations may have been committed. SSA's policy states:

"Prior to referral to the OIG, Office of Investigations Field Division, each potential violation and allegation must be developed by the field office, processing center, or other SSA office to the point where enough evidence has been secured to either remove suspicion or substantiate the violation."

In the Chicago RO, the Office of the Regional Commissioner (ORC) and the Center for Security and Integrity (CSI) review employee conduct and program-related allegations. The ORC reviews service complaints, which do not appear to involve fraud. CSI reviews all allegations that appear to involve fraud or employee misconduct. CSI is also responsible for supporting field office managers in developing potential fraud issues by using computer system analysis and providing other technical support. Cases involving employee misconduct that are not potential criminal violations are referred to the Center for Human Resources' (CHR) Employee Relations Staff for adverse actions. The ORC and CSI workflow processes are illustrated in Appendix C.

We reviewed 90 employee-related allegations referred to the Chicago RO during Fiscal Years (FY) 2001 through 2003. Of the 90 employee-related allegations, 79 allegations were referred by OIG and 11 allegations were referred from sources other than OIG. See Appendix B for the scope and methodology of our audit.

RESULTS OF REVIEW

For 63 of the 90 employee-related allegations we reviewed, the Chicago RO generally complied with its procedures to address the allegations and refer potential criminal violations to OIG. However, for the remaining 27 allegations we were unable to determine if the Chicago RO complied with its procedures and referred potential criminal violations to OIG because there was insufficient documentation to ascertain whether these allegations were properly developed and resolved. We also found that the Chicago RO did not:

Track and account for all allegations received from OIG and other sources.

Provide OIG with the results of its review of five allegations within the required 90-day period.

Provide OIG with the results of its review of five allegations.

RETENTION OF CASE DEVELOPMENT DOCUMENTATION

The Chicago RO did not provide sufficient development documentation for us to determine if it investigated and resolved 27 of the 90 employee-related allegations we reviewed. Of the 27 allegations, 25 allegations were received from the OIG and 2 allegations were received from other sources. For 5 of the 25 allegations referred by OIG, the Chicago RO could not locate any development documentation. For the remaining 20 allegations, the development documentation provided by the Chicago RO was not sufficient for us to determine if the allegations were fully developed or properly resolved within the required timeframes, as discussed below.

For seven allegations, the ORC responded that it had not found evidence of employee fraud or criminal wrong doing. However, the documentation did not reflect what actions were taken to conclude that the allegations were unsubstantiated.

For nine allegations, there was no evidence that action was taken to determine whether the allegations were properly resolved. The ORC maintained only the OIG referral e-mail.

The ORC could not document when it received two allegations from the OIG or responded to OIG on one allegation. In addition, the ORC could not locate its response for one allegation.

We also found that CSI did not adequately document its development for 2 of the 11 allegations received from sources other than OIG. The two files contained audit trail or tracking data, but lacked sufficient evidence to support whether the allegations were properly resolved and referred to OIG. Subsequently, CSI staff informed us that neither allegation was referred to OIG because (1) one allegation was unsubstantiated and did not need to be referred to OIG and (2) the case development did not result in a category 2B or 3 sanctions violation; instead, the employee received an adverse action.

The Region should maintain sufficient evidence to document that employee-related allegations are properly handled and developed. The lack of documentation limits management's ability to readily determine whether appropriate actions were taken to resolve the allegations. Also, insufficient documentation hampers management's ability to identify recurring problems related to certain SSA locations or employees. Finally, because documentation to support the development of 27 allegations was not available, we could not determine whether the allegations were valid or should have been referred to the OIG.

To address this issue, the Regional Commissioner implemented a retention policy in June 2004, which states that OIG allegation documentation is to be retained for 3 years, and in a separate file from other action items. The policy requires that completed responses include the action item control sheet, the allegation referral e-mail, the Chicago RO response, and any evidence of development and/or final action.

TRACKING AND ACCOUNTING FOR ALL ALLEGATIONS RECEIVED

We found that the Chicago RO procedures for tracking and monitoring employee-related allegations do not require that all allegations be logged or entered into a centralized database for tracking purposes. Rather, the ORC uses two systems to track OIG allegations received, though neither system contains a complete listing of all allegations received. The ORC tracks employee-related allegations received from OIG in the Correspondence Control System, except those received by regular mail, which are controlled in a manual log. To properly monitor all allegations received by OIG, ORC must compile a summary of both control lists, which involves a careful review of the subject line for the allegations recorded in the manual log. Yet, the ORC did not provide a complete list of OIG allegations because the file we received was generated from the Correspondence Control System. In fact, our review found that only 50 of the 79 OIG allegations were tracked using either the Correspondence Control System or the manual log.

In addition, CSI provided information to substantiate their review of 11 employee-related allegations received from sources other than the OIG during our audit period. However, CSI staff stated that all allegations received are not logged or recorded. As a result, we could not independently verify that the cases we reviewed represented the total population of all the employee-related allegations received from sources other than the OIG during our audit period.

Federal regulations prescribe that management controls should ensure access to resources and records is limited to authorized individuals and transactions are promptly recorded, accounted for, and properly classified. Federal internal control standards call for policies, procedures, techniques and mechanisms to help enforce management's directives, address risks and to record, properly classify and account for transactions and events. The present controls do not quickly provide management with information that identifies the total number of allegations received, investigated, responded to, or the frequency of the employees or components involved. Without this information, management's ability to identify issues needing attention is limited. Furthermore, maintaining an adequate control system could assist the Chicago RO to ensure appropriate follow-up, eliminate duplication of efforts, and allow for the establishment of management information related to allegation trends.

TIME REQUIREMENTS TO COMPLETE REFERRALS

OIG requires the SSA component receiving an allegation referral from the OIG Hotline to respond with the results of its findings within 90 days, explaining what actions were taken on the allegation and reporting any monetary recoveries or savings realized. We identified five allegations where the ORC's response to the OIG exceeded 90 days. These cases were open for an average of 147 days, ranging from a low of 100 days to a high of 212 days. Also, because the ORC did not provide sufficient development documentation for 25 allegations referred by the OIG, we were unable to determine if the 90-day requirement was met on these allegations.

OUTSTANDING ALLEGATION REFERRALS

As of May 2004, the ORC had not provided OIG's Allegation Management Division with the results of its findings on five allegations, although the allegations were open longer than 90 days. For one of the five open allegations, ORC provided us with documentation that demonstrated sufficient resolution of the case. For the remaining four open allegations, ORC could not provide documentation to support the development of the allegations or justify why it had not responded to OIG within the required 90-day time period. Accordingly, we could not determine whether the allegations were properly investigated. While we recognize that some allegations may require an extended period of time to develop, ORC should monitor resolution time frames to ensure adherence to the required 90-day period or document why the 90-day timeframe could not be met.

CONCLUSION AND RECOMMENDATIONS

Our review found that the Chicago RO's procedures for addressing employee-related allegations could be improved to better ensure all allegations are recorded, developed, and timely resolved. Also, the procedures should ensure that adequate information is maintained to document the investigation and resolution of employee allegations.

Accordingly, we recommend the Chicago RO:

1. Implement an allegation control process that documents the receipt, development, and disposition of all allegations.

2. Establish and monitor time frames for reviewing and resolving employee-related allegations to ensure that they are addressed within a 90-day period.

3. Provide OIG the results of its findings on the five allegations that remain open.

AGENCY COMMENTS

In commenting on our draft report, SSA generally agreed with our recommendations and stated that a new system is being developed to track and control employee-related allegations. With regards to our third recommendation, SSA provided additional information on the results of its findings on the allegations we identified as still open in the OIG's Allegation Management Division's tracking system. See Appendix E for the full text of SSA's comments.

OIG RESPONSE

We acknowledge the additional information that SSA provided on the results of its review of the five employee-related allegations that are still open in the OIG's allegation tracking system. We will provide this information to our Allegation Management Division.

Steven L. Schaeffer

Appendices
APPENDIX A - Acronyms
APPENDIX B - Scope and Methodology
APPENDIX C - Flowcharts
APPENDIX D - Employee Violations
APPENDIX E - Agency Comments
APPENDIX F - OIG Contacts and Staff Acknowledgments

Appendix A
Acronyms
AMD
AUSA
CHR Allegation Management Division
Assistant United States Attorney
Center for Human Resources
CSI
ERT Center for Security and Integrity
Employee Relations Team
FY
GAO Fiscal Year
Government Accountability Office
OIG Office of the Inspector General
ORC Office of the Regional Commissioner
POMS Program Operations Manual System
RO Regional Office
SSA Social Security Administration
SSN Social Security Number

Appendix B
Scope and Methodology

We reviewed employee-related allegations received by the Chicago Regional Office (RO) in Fiscal Years (FY) 2001 through 2003. For this period, we identified and reviewed 79 allegation referrals from the Office of the Inspector General (OIG) and 11 employee-related allegations from sources other than the OIG. Additionally, we selected 90 adverse actions processed by the Center for Human Resources' (CHR) Employee Relations Staff to identify severe actions that may be related to possible criminal violations. We reviewed 89 adverse action files, since the RO had reversed one adverse action and properly expunged any reference of the suspension from the employee's record. Based on our review of adverse action files, we did not find any potential criminal offenses that were not reported to the OIG.

To accomplish our objectives, we:

Reviewed the following criteria:
Office of Management and Budget Circular A-123, Management Accountability and Control
Office of Personnel Management, Standards of Ethical Conduct for Employees of the Executive Branch
Social Security Administration (SSA), Program Operations Manual System
SSA, Administrative Instructions Manual System
SSA, Annual Personnel Reminders.

Obtained a list of 79 employee-related allegations processed by the OIG and referred to the Chicago Office of the Regional Commissioner (ORC) during FYs 2001 through 2003.

Interviewed officials within the ORC, Center for Security and Integrity (CSI), and the CHR in Chicago, Illinois.

Reviewed 22 allegations that CSI received, reviewed and monitored as sensitive cases. We reported on 11 since the remaining allegations involved either non-SSA employees or were part of an open OIG investigation.

Reviewed ORC and CSI control logs and documentation for the development of evidence related to allegations received from the OIG and other sources.

We performed field work at the SSA RO in Chicago, Illinois in March and April 2004. We determined that the data provided by the ORC was sufficiently reliable to meet our audit objectives and facilitated the development of issues presented in the report. The entity reviewed was the Chicago RO under the Deputy Commissioner for Operations. We conducted our review in accordance with generally accepted government auditing standards.

The 90 allegations we reviewed are summarized below by the adequacy of development documentation and fiscal year.

Appendix C
Flowcharts

Appendix D
Employee Violations

LIST - EMPLOYEE POTENTIAL VIOLATIONS (Program Operations Manual System, GN 04112.005D)
Employee violations include, but are not limited to situations in which an employee is suspected of willfully:
acting as an agent or attorney for prosecuting any Social Security claim before the Commissioner while an employee;
disclosing without authorization any confidential information in violation of the Social Security Act or the Privacy Act of 1974;
obtaining or attempting to obtain confidential information under false pretenses;
making or causing to be made any false representation concerning the requirements of the Social Security Act or related provisions of the Internal Revenue Code;
asking for, accepting, or agreeing to accept anything of value from a third party in return for executing or influencing the performance of official duties;
participating in the planning or execution of any scheme or other activity under which a financial or other advantage improperly accrues or could accrue to any person or organization at the expense of the Government or parties with whom the Government may contract or otherwise deal;
stealing or otherwise illegally disposing of refund remittances, Government checks, cash, directly deposited funds, or other obligations;
illegally generating Social Security checks or depositing funds electronically to oneself or another;
stealing or mutilating Government records, or destroying or removing them without authorization;
violating conflict-of-interest laws as described in the Ethics in Government Act, the Standards of Ethical Conduct for Employees of the Executive Branch, and the SSA Guide on Employee Conduct;
making or causing to be made any false statement or representation about wages, earnings, or self-employment income in connection with claims or the maintenance of earnings records;
making or causing to be made any false statement or representation of a material fact in an application for payments or for a disability determination, or at any other time for use in determining rights to payments;
concealing or failing to disclose a fact or event affecting initial or continued eligibility for payment;
furnishing or causing to be furnished false information about identity in connection with a claim, issuing a Social Security number, or maintaining an earnings record;
selling Social Security numbers/cards; or
unlawfully disclosing, using, or compelling the disclosure of a Social Security number.

Appendix E
Agency Comments

SOCIAL SECURITY
MEMORANDUM

Date: August 23, 2004

To: Assistant Inspector General for Audit

From: Regional Commissioner Chicago

Subject: The Social Security Administration's Procedures for Addressing Employee-Related Allegation in Region V (A-05-04-14086) (Your Memorandum Dated July 30, 2004)--REPLY

We welcome the Assistant Inspector General's report evaluating our control and response concerning employee-related allegations. As responsible stewards of the public's trust, we thoroughly investigate every allegation concerning employee misconduct. Any suggestions to improve our controls over this process are appreciated.

The audit report concludes that the Chicago Regional Office generally complied with procedures to address allegations, the report contains three recommendations:

1. Implement an allegation control process that documents the receipt, development, and disposition of all allegations.

2. Establish and monitor time frames for reviewing and resolving employee-related allegations to ensure that they are addressed within a 90-day period.

3. Provide the Office of the Inspector General with the results of 5 allegations that were found to be open.

To address the first two recommendations, the Office of the Regional Commissioner is now working with the Centers for Security and Integrity and Systems and Automation to develop an Access database to track and control employee-related allegations. This will be an internet-based application with limited access. As allegations are received, they will be keyed into the database which will track the status of the investigation as well as record the final disposition of the case. The database will be queried weekly to generate reports of outstanding investigations. This will ensure that all investigations are addressed before the close of 90 days.

Your third recommendation asks for results of our findings on 5 "open" allegations. We are confident that each of these 5 allegations was fully developed, and that responses were sent to OIG timely. If OIG considers the cases "open" because the documentation provided was not sufficient, it would be helpful for OIG to provide specific feedback as to why the provided documentation was not sufficient.

Of the 5 allegations, only 2 indicated the possibility of employee fraud:

Allegation No. T103536 (November 2000)
On page 5 of the report, referring to this allegation, you state, "ORC provided us with file documentation that demonstrated sufficient resolution of the case". Considering this, we are not clear as to what further action we need to take on this case. We do have all of the file documentation that we can re-submit, if needed.

Allegation No. P111935 (June 2001)
There is no indication or evidence that this allegation was substantiated. We attempted to contact the named subject, as well as management at the time the allegation was received. We are unable to re-contact the complainant, since it was an anonymous allegation.

The other 3 allegations involved service complaints, as opposed to allegations of employee fraud. Despite the lack of documentation as to the resolution of the specific allegations, review of SSA records indicates that all 4 of theses "open" allegations have been dealt with appropriately. Also, each of these were received more than 2 years before the audit began. Prior to the change in our retention policy, documentation of these allegations would not have been retained, except in instances involving actual allegations or findings of fraud. Because the cases do not involve employee fraud, we do not feel that reconstructing the actual documentation of our resolution of the allegations is necessary.

Allegation No. T103610 (October 2000)
The wages that the claimant alleged were not his have been removed from the record. Review of the record does not point to any indication of employee fraud.

Allegation No. P108433 (April 2001)
Review of our records indicates the claimant has received all benefits she is entitled to. No indication of employee fraud.

Allegation No. P203864 (March 2002)
The Modernized Development Worksheet (MDW) for this complainant documents ongoing conversations since 2000. In response to the allegation received in March 2002, an appointment was set up for her with the Akron, Ohio field office to discuss her issues and to review her folder. The claimant did not cooperate and did not provide necessary documentation. Her SSI record has since terminated due to her failure to cooperate. Review of the record does not point to any indication of employee fraud.

Questions regarding this memorandum may be directed to Robert E. Coplin, Center Director, Management and Operations Support, CSI, at (312) 575-4120.

James F. Martin

Appendix F
OIG Contacts and Staff Acknowledgments
OIG Contacts
Mark Bailey, Director, Central Audit Division (816) 936-5591
Teresa S. Williams, Audit Manager, Central Audit Division (312) 353-0331

Acknowledgments
In addition to those named above:
Elizabeth Juárez, Lead Auditor
Sherman Doss, Auditor
Cheryl Robinson, Writer-Editor

For additional copies of this report, please visit our web site at www.ssa/gov/oig or contact the Office of the Inspector General's Public Affairs Specialist at (410) 966-1375. Refer to Common Identification Number A-05-04-14086.

Overview of the Office of the Inspector General

The Office of the Inspector General (OIG) is comprised of our Office of Investigations (OI), Office of Audit (OA), Office of the Chief Counsel to the Inspector General (OCCIG), and Office of Executive Operations (OEO). To ensure compliance with policies and procedures, internal controls, and professional standards, we also have a comprehensive Professional Responsibility and Quality Assurance program.

Office of Audit

OA conducts and/or supervises 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 and program evaluations and projects on issues of concern to SSA, Congress, and the general public.

Office of Investigations

OI conducts and coordinates investigative activity 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 OIG liaison to the Department of Justice on all matters relating to the investigations of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.

Office of the Chief Counsel to the Inspector General

OCCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCCIG 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. Finally, OCCIG administers the Civil Monetary Penalty program.

Office of Executive Operations

OEO supports OIG by providing information resource management and systems security. OEO also coordinates OIG's budget, procurement, telecommunications, facilities, and human resources. In addition, OEO is the focal point for OIG's strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act of 1993.