Office of the Inspector General
Larry G. Massanari
Acting Commissioner of Social Security

Inspector General

Replacement Social Security Number Cards: Opportunities to Reduce the Risk of Improper Attainment and Misuse (A-08-00-10061)

The attached final report presents the results of our audit. Our objective was to assess the potential for individuals to improperly obtain and misuse replacement Social Security number cards.

Please comment within 60 days from the date of this memorandum on corrective action taken or planned on each recommendation. If you wish to discuss the final report, please call me or have your staff contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410) 965-9700.

James G. Huse, Jr.

Executive Summary

The objective of the audit was to assess the potential for individuals to improperly obtain and misuse replacement Social Security number (SSN) cards.

BACKGROUND

In prior Office of the Inspector General reports, we outlined the role SSNs play in the commission of identity fraud crimes and highlighted some of the vulnerabilities in SSA’s issuance of original SSN cards. Based on our work at 10 SSA FOs and analysis of national replacement card data, we are equally concerned about SSA’s risk of improper attainment and misuse of replacement SSN cards. SSA FO personnel with whom we spoke shared our concern. In fact, some believed the risk was higher with replacement SSN cards because the Agency requires less documentary evidence to obtain them.

From April 1, 1999 through March 31, 2000, SSA issued over 11 million replacement SSN cards. In total, SSA issued 3 or more replacement SSN cards to 35,324 individuals.

• SSA issued 6 or more replacement SSN cards to 192 individuals, and, of these, we identified 108 (56 percent) instances of potential SSN misuse.

• SSA issued 3 to 5 replacement cards to 35,132 individuals, and we estimated there were 5,972 (17 percent) instances of potential SSN misuse.

We have serious reservations regarding any person’s need to obtain more than three replacement SSN cards in 1 year. In fact, our analysis identified various types of irregularities that were indicative of individuals who may have obtained these replacement SSN cards for suspect reasons. The most common irregularities we noted involved number holders with an unlikely number of replacement SSN cards based on their age and number holders whose earnings were proportionally higher than would be expected given their age, number of employers, and type of employment. For example, we believe it is highly improbable that, during 1 year, an individual could work for multiple employers in numerous States and earn significant income from traditionally low-paying jobs, such as those in the agriculture and service industries.

Although the remaining individuals who received three or more replacement SSN cards could have misused these cards, they did not exhibit the characteristics we measured to determine potential SSN misuse (see Appendix A for a detailed list of the characteristics measured). We acknowledge the irregularities identified in this report are our opinion, which is based on available evidence, and have not been fully investigated to determine whether fraud or misuse actually occurred. It is impossible to precisely quantify the extent of replacement SSN card misuse given its nature, but we believe the irregularities we identified illustrate SSA’s risk of exposure to such activity.

Despite SSA’s commitment to combat SSN fraud and misuse, SSA has additional opportunities to reduce its exposure to such activity. SSA does not limit the number of replacement SSN cards individuals can receive. Of the 35,132 individuals who received 3 to 5 replacement SSN cards during our audit period, we estimate SSA could issue 10 or more replacement SSN cards over a lifetime to 6,324 of these individuals. While we recognize there are legitimate reasons for obtaining a replacement SSN card, such as a name change or an occasional lost card, we believe the number of cards some individuals obtain is indicative of SSN misuse. SSA FO personnel told us some individuals who request multiple replacement SSN cards are homeless or mentally impaired, but others sell their cards or allow someone else to use them for work purposes. Our findings appear to support their concerns.

SSA has a stewardship responsibility to prevent and detect fraudulent activity. SSA personnel increase the Agency’s exposure to such activity when they do not comply with enumeration policies and procedures. For example, our review of 290 applications (based on either in-person interviews or mail receipts) showed SSA issued 45 (16 percent) replacement SSN cards that should not have been issued based on the applicant’s documentary evidence. FO personnel told us they do not always comply with enumeration policies and procedures because they are under pressure to serve applicants as quickly as possible. Although we recognize the need to satisfy customer demands, we do not believe prompt customer service should ever take precedence over preventing and detecting fraudulent activity.

Despite SSA’s commitment to eliminating opportunities for fraud and misuse in its enumeration process, the Agency’s exposure to such activity remains. We recognize SSA has limited control over individuals who intentionally choose to misuse replacement SSN cards the Agency appropriately issued. However, we believe SSA has a duty to safeguard the integrity of SSNs by reducing opportunities for individuals to engage in such activity. Given the potential for individuals to improperly obtain and misuse replacement SSN cards, as evidenced by the examples presented in this report, we believe SSA would benefit by taking a more proactive role in eliminating opportunities to conduct such activity.

We believe the actions recommended in previous reports and those in this report will assist SSA in reducing its risk from individuals who improperly obtain and misuse replacement SSN cards. Accordingly, we recommend that SSA:

• Develop regulations and incorporate appropriate system controls to limit the number of replacement SSN cards an individual can receive during a 12-month period to 3 and over a lifetime to 10. SSA should implement a two-pin process requiring management personnel to approve extraordinary circumstances that warrant exceptions.

• Re-emphasize the importance of following enumeration policies and procedures associated with the issuance of replacement SSN cards, including the requirement to independently verify Immigration and Naturalization Service (INS) documents when indicated by SSA policy and the Systematic Alien Verification for Entitlements program.

• Conduct an inventory to determine the number of FOs that have operational black lights and INS document guides to use when verifying evidentiary documents. SSA should supply or repair these tools if necessary.

• Test FO employee compliance with procedures for issuing replacement SSN cards when performing periodic enumeration quality reviews. Additional training and/or supervision should be provided to employees if necessary.

Regarding Recommendation 1, SSA agreed it needs to look more carefully at the issuance of replacement cards to ensure it takes every advantage of systematic controls, such as limits, that might allow SSA to more effectively identify risk factors and avoid the issuance of multiple replacement cards in questionable situations. SSA also stated it is beginning further assessment to determine the most effective systematic protocols to pursue.

SSA agreed with Recommendation 2 and stated that, by September 30, 2001, the Office of Operations will issue a reminder to all FOs stressing the importance of following enumeration policies and procedures.

SSA stated it believes current procedures address Recommendation 3. Specifically, the Agency stated every FO has a copy of the Administrative Confidential Memorandum, which is the INS’ guide for examining INS documents. SSA also stated the Regional Integrity on-site security review or FO self-review includes actions to verify the FO’s black light is operational. Additionally, SSA stated it is working with INS to provide SSA employees access to more INS automated records and to implement an Enumeration at Entry initiative.

SSA believes it can address Recommendation 4 through reminder items and training. SSA stated the Office of Quality Assurance and Performance Assessment (OQA) conducts an annual end-of-line review of both original and replacement cards issued to access the accuracy of the process. Upon issuance of the next OQA report, the Deputy Commissioner for Operations will include a reminder for the regional offices to have FOs conduct refresher training, as indicated by OQA’s findings, and to remind staff that they need to comply with all procedures for issuing replacement SSN cards.

SSA also provided technical comments that we considered and incorporated, where appropriate. The full text of SSA’s comments is included in Appendix D.

OFFICE OF THE INSPECTOR GENERAL RESPONSE

We believe SSA’s response and planned actions adequately address Recommendations 1, 2, and 4. However, we believe SSA’s response to Recommendation 3 does not effectively respond to our goal of reducing opportunities for individuals to improperly attain and misuse replacement SSN cards.

Regarding SSA’s response to Recommendation 3, we acknowledge SSA’s efforts in working with the INS to provide SSA employees access to more INS automated records and to implement the Enumeration at Entry initiative. While we believe these initiatives will prove useful in the future, full implementation may be years away. In the meantime, we continue to believe FO personnel should use every tool available, such as black lights and INS guides, to assist them in detecting invalid evidentiary documents.

In its response, SSA stated every FO has a copy of the Administrative Confidential Memorandum. We question how the Agency can make such a statement without conducting an inventory as we suggested. As discussed in the report, 5 (50 percent) of the 10 FOs we visited told us they did not routinely use a black light. In fact, two FOs either did not have a black light or the light had been broken for years. Given the importance of preventing individuals from fraudulently obtaining replacement SSN cards, we continue to believe SSA should ensure that all FOs have operational black lights and INS document guides to use when verifying evidentiary documents. Therefore, we ask that SSA reconsider its response to this recommendation.

Table of Contents

APPENDIX E – OIG Contacts and Staff Acknowledgments

Acronyms

Introduction

The objective of this audit was to assess the potential for individuals to improperly obtain and misuse replacement Social Security number (SSN) cards.

The expanded use of the SSN as a national identifier has given rise to individuals using improperly attained SSN cards and cards belonging to others for illegal purposes. Once obtained, individuals can use these cards to gain employment, obtain benefits and services, establish credit, and hide their identities to commit various types of crimes. Within the Social Security Administration (SSA), unlawful use of the SSN has equally important implications. For example, SSA cannot post wages to the correct earnings records when individuals use improper SSNs. SSA places wage items that fail to match name and SSN records into its Earnings Suspense File (ESF). Furthermore, wages an individual reports using another’s SSN may result in excess earnings recorded to an individual’s wage records and can cause overpayment of SSA benefits to that individual.

In 1999, SSA processed over 16 million SSN card applications. Over 11 million of these applications (almost 70 percent) were requests for replacement SSN cards. SSA does not charge a fee to obtain a replacement SSN card or limit the number of replacement cards an individual can receive. At an administrative cost of $18.70 to receive and process an SSN application, SSA spends approximately $206 million, annually, to issue replacement SSN cards.

Individuals applying for a replacement SSN card must complete, sign, and submit an Application for a Social Security Card (Form SS-5) at an SSA field office (FO) or through the mail (intake process). Because SSA must be certain the individual is who he or she claims to be, SSA requires each applicant to present documentary evidence of his or her identity. An identity document submitted as evidence must be recently issued and provide information so FO personnel can compare its contents with SS-5 data and/or with the applicant’s physical appearance. Among other documents, acceptable evidence of identity include driver’s licenses, passports, school identification cards, marriage or divorce certificates, and military records. A non-picture identity document should have two or more of the following items: name, signature, age, date of birth, or parent’s names. Documents that should not be accepted as evidence of identity are those that are issued based on an individual’s allegations and have little or no probative value, such as a library card, vehicle or voter’s registration, and credit card. Foreign-born applicants must also show evidence of U.S. citizenship, work authorized lawful alien status, or current documentation of a valid non-work reason. Examples of documents establishing U.S. citizenship are State or local birth certificates, U.S. passports, and certificates of naturalization.

SSA provides FO personnel guidance to assist them in evaluating identity documents.

For example, SSA instructs FO personnel to compare documents presented by applicants with characteristics of a valid document and to be alert for alterations and erasures. SSA also instructs FO personnel to compare information on each document with information on the applicant’s SS-5 and Numident record. SSA provides FO personnel copies of guides that provide examples of authentic documents, such as the Administrative Confidential Memorandum, for documents issued by the Immigration and Naturalization Service (INS). SSA guidance also requires FO personnel to view INS documents under a black light to determine whether they conform to special identification checkpoints and fluoresce. If INS has assigned an alien registration number ("A" number) to an individual and he or she has been in the United States for 30 or more days, SSA also requires FO personnel to verify the validity of INS documents via INS’ Systematic Alien Verification for Entitlements (SAVE) program.

FO personnel review the SS-5 and determine the validity of supporting evidentiary documents. They then certify and enter applicant information into SSA’s Modernized Enumeration System (MES) (certification process). Once certified, the SSN application undergoes numerous automated edits to further validate applicant information (systems validation process). If the application passes all of these edits, MES issues a replacement SSN card (service delivery process). Illustration 1 provides a general overview of this process.

From April 1, 1999 through March 31, 2000, SSA issued over 11 million replacement SSN cards. We obtained a data extract from MES containing transactional data for all replacement SSN cards the Agency issued during this 12-month period. As further described in Appendix A of this report, from this universe, we identified SSN holders to whom SSA issued three or more replacement cards. This population totaled 35,324 individuals. We then reviewed all of the SSNs where SSA issued 6 or more replacement SSN cards during the 12-month period (192 SSNs). Additionally, we randomly selected and reviewed a weighted sample of 100 SSNs where the Agency issued 3 to 5 replacement cards during that same period. Using queries from SSA systems, such as benefits and earnings records, the Numident file, and the ESF, we assessed the potential for individuals to improperly obtain and misuse replacement SSN cards. Specifically, we identified various types of irregularities that were indicative of individuals who may have obtained replacement SSN cards for suspect reasons (see Appendix B for a detailed list of the characteristics measured). These irregularities included SSN holders who had

• earnings that were proportionally higher than would be expected given the individual’s age, number of employers, and type of employment;

• obtained an improbable number of replacement SSN cards based on their age;

• wages in the ESF possibly because someone else provided an altered SSN card (with the number holder’s SSN but someone else’s name) to an employer or used the number holder’s SSN for work purposes without showing the employer an SSN card; and

• earnings and were also drawing disability benefits under title II or title XVI.

As part of this audit, we also visited 10 SSA FOs to review the enumeration process as it related to the issuance of replacement SSN cards. To ensure geographic diversity, we selected FO’s in 5 of SSA’s 10 regions. Within each region, we first selected an FO that issued a large number of replacement SSN cards during our audit period, and then we selected another FO in the same location to supplement our work. At each FO, we met with SSA management and staff to obtain their views on the Agency’s exposure associated with replacement SSN cards. We also observed personnel processing replacement SSN card applications at the window (200) and those received by mail (90). We reviewed previously processed applications for replacement cards (200). In addition, we verified the validity of all (102) INS documents with an "A" number. Finally, we independently verified 27 of these with INS because SAVE indicated "institute secondary verification" at the time of our review.

During our audit, we interviewed SSA Headquarters staff responsible for planning, managing, and implementing the Agency’s policies and procedures for issuing replacement SSN cards. Additionally, we reviewed relevant SSA regulations, policies, and requirements pertaining to the enumeration function as it relates to replacement SSN cards. We performed our audit work at SSA Headquarters in Baltimore, Maryland, and two FOs in each of the following states: Texas, Illinois, New York, Florida, and Nevada.

The SSA entities reviewed were the Office of Program Benefits under the Deputy Commissioner for Disability and Income Security Programs and the Office of Public Services and Operations under the Deputy Commissioner for Operations. We completed our audit field work between October 2000 and February 2001. We conducted our audit in accordance with generally accepted government auditing standards.

Results of Review

In prior Office of the Inspector General reports, we outlined the role SSNs play in the commission of identity fraud crimes and highlighted some of the vulnerabilities in SSA’s issuance of original SSN cards. Based on our work at 10 SSA FOs and analysis of national replacement card data, we are equally concerned about SSA’s risk of exposure to individuals who improperly obtain or misuse replacement SSN cards. SSA FO personnel with whom we spoke shared our concern. In fact, some believed the risk was higher with replacement SSN cards because the Agency requires less documentary evidence to obtain them.

From April 1, 1999 through March 31, 2000, SSA issued over 11 million replacement SSN cards. In total, SSA issued 3 or more replacement SSN cards to 35,324 individuals.

• SSA issued 6 or more replacement SSN cards to 192 individuals, and, of these, we identified 108 (56 percent) instances of potential SSN misuse.

• SSA issued 3 to 5 replacement cards to 35,132 individuals, and we estimated there were 5,972 (17 percent) instances of potential SSN misuse.

We have serious reservations regarding any person’s need to obtain more than three replacement SSN cards in 1 year. In fact, our analysis identified various types of irregularities indicative of individuals who may have obtained replacement SSN cards for suspect reasons. The most common irregularities we noted were number holders with an unlikely number of replacement SSN cards based on their age and number holders whose earnings were proportionally higher than would be expected given their age, number of employers, and type of employment. For example, we believe it is highly improbable that, during 1 year, an individual could work for multiple employers in numerous States and earn significant income from traditionally low-paying jobs, such as those in the agriculture and service industries.

Although the remaining individuals who received three or more replacement SSN cards could have misused these cards, they did not exhibit the characteristics we measured to determine potential SSN misuse (see Appendix B for a detailed list of the characteristics measured). We acknowledge the irregularities identified in this report are our opinion, which is based on available evidence, and have not been fully investigated to determine whether fraud or misuse actually occurred. It is impossible to precisely quantify the extent of replacement SSN card misuse given its nature, but we believe the irregularities we identified illustrate SSA’s exposure to such activity.

Despite SSA’s commitment to combat SSN fraud and misuse, SSA has additional opportunities to reduce its exposure to such activity. SSA does not limit the number of replacement SSN cards individuals can receive. Of the 35,132 individuals who received 3 to 5 replacement SSN cards during our audit period, we estimate SSA could issue 10 or more replacement SSN cards over a lifetime to 6,324 of these individuals. While we recognize there are legitimate reasons for obtaining a replacement card, such as a name change or an occasional lost card, we believe the number of cards some individuals obtain is indicative of SSN misuse. SSA FO personnel told us some individuals who request multiple replacement SSN cards are homeless or mentally impaired, but others sell their cards or allow someone else to use them for work purposes. Our findings appear to support their concerns.

SSA has a stewardship responsibility to prevent and detect fraudulent activity. SSA personnel increase the Agency’s exposure to such activity when they do not comply with enumeration policies and procedures. For example, our review of 290 applications (based on either in-person interviews or mail receipts) showed SSA issued 45 (16 percent) replacement SSN cards that should not have been issued based on the applicant’s documentary evidence. FO personnel told us they do not always comply with enumeration policies and procedures because they are under pressure to serve applicants as quickly as possible. Although we recognize the need to satisfy customer demands, we do not believe that prompt customer service should ever take precedent over preventing and detecting fraudulent activity.

Based on our interviews and observations at SSA FOs and analysis of national replacement card data, we believe the potential for individuals to improperly obtain and misuse replacement SSN cards is significant. SSA personnel at all of the 10 FOs we visited believe the Agency’s risk of exposure to such activity is considerable. In fact, several FO managers told us they believe it would be easier for an individual to improperly obtain a replacement card than an original card because SSA’s requirements for evidentiary documents are less strict. One FO manager stated "SSA’s antenna is not up as high" when processing replacement cards, so it is easier for individuals to improperly obtain and misuse replacement SSN cards.

FO personnel also told us they believe it would be easier for a U.S. born citizen than a foreign-born individual to improperly obtain a replacement card because SSA only requires evidence of identity. FO personnel told us they believe the primary reasons a U.S. born citizen would want to improperly obtain another individual’s replacement card would be to avoid creditors, establish a new identity, or evade child support. The primary reason FO personnel cited for noncitizens wanting to improperly obtain a replacement card was for work purposes. Several FO staff members told us they believe applications for replacement cards sent in through the mail are more vulnerable to fraudulent activity because SSA personnel cannot observe the applicant’s characteristics (for example, age, race and gender) or ask questions, which could assist them in determining the number holder’s identity.

FO personnel we spoke with also told us SSA is at-risk from individuals who improperly obtain and misuse replacement cards because the Agency is not focused on fraud. For example, one FO manager stated, "SSA trains FO personnel to provide customer service, not to identify SSN fraud and misuse." Another FO manager told us that, although SSA sends reminders to FOs that address the need to adhere to fraud prevention procedures, SSA is more concerned with shortening customer wait times and answering congressional inquiries than preventing and detecting fraud and misuse. The manager told us the Agency identifies fraudulent activity by accident, not by controls designed to prevent and detect such activity.

To ensure accuracy in all SSA programs, the Agency must maintain the integrity of the SSNs it issues. When individuals improperly obtain or misuse replacement SSN cards, wages reported under that SSN cannot be associated with workers’ earnings and therefore public confidence in SSA’s stewardship of Agency programs is adversely affected. Further, the accuracy of employees’ names and SSNs is important to SSA because it reduces operating costs. In the past, SSA officials estimated it cost less than $.50 to post a correctly submitted wage item to an individual’s earnings record and an average of $300 to correct an item once it goes into the ESF. Although the Agency is attempting to calculate and update unit cost, we believe the administrative costs associated with this process are significant. Finally, wages reported using another’s SSN may result in excess earnings recorded to an individual’s wage records and can cause overpayment of SSA benefits to that individual. Accordingly, we believe SSA must do more to reduce its exposure to the improper attainment and misuse of replacement SSN cards.

SSA issued 6 or more replacement SSN cards to 192 individuals during our audit period, and we identified 108 (56 percent) instances of potential SSN misuse. That is, our analysis showed various types of irregularities that are indicative of individuals who may have obtained replacement SSN cards for suspect reasons. The most common irregularities we identified follow.

• Number holders who obtained an improbable number of replacement SSN cards based on their age. For example, SSA issued 20 replacement SSN cards to a 2-year-old child. Because we found no earnings posted to the child’s account, we believe someone could have obtained these cards for other purposes. For example, someone could have obtained these cards to establish credit or improperly obtain benefits and services.

• Number holders whose earnings were proportionately higher than would be expected given the individual’s age, number of employers, and type of employment. We believe it is highly improbable that, during 1 year, an individual could work for multiple employers in numerous States and earn significant income from traditionally low-paying jobs, such as those in the agriculture and service industries. In these cases, we believe several individuals used the same name and SSN for work purposes.

• Number holders who had wages in the ESF possibly because someone else provided an altered SSN card (with number holder’s SSN but someone else’s name) or used the number holder’s SSN for work without showing the employer an SSN card. SSA placed about $90,000 in suspended earnings in the ESF during 1999 from these instances.

• Number holders who had earnings and were drawing disability benefits under title II or title XVI. These individuals either exceeded their earnings limit or someone else used their SSN for work purposes.

SSA issued 3 to 5 replacement SSN cards to 35,132 individuals during our audit period. During our review of 100 randomly selected SSNs with 3 to 5 replacement cards, we identified 17 (17 percent) instances of potential SSN misuse. Therefore, we estimate there were 5,972 instances of potential SSN misuse in the 35,132 replacement SSN cards (see Appendix C). The two types of irregularities we identified were number holders who (1) obtained an improbable number of replacement SSN cards based on their age and (2) had wages in the ESF under a different name and obtained three or more replacement SSN cards during the audit period.

We believe the following examples of SSNs issued during our audit period illustrate SSA’s exposure to SSN misuse, provide an exceptional learning opportunity for the Agency, and serve as a catalyst for changes essential to ensuring the SSNs integrity.

We will refer the following types of irregularities to SSA’s Office of the Inspector General, Office of Investigations.

• SSA issued 6 replacement SSN cards to a 34-year-old male (24 cards lifetime). He had $172,000 in earnings from 27 employers in 10 States during 1999. In addition, he had $121,000 in earnings from 8 employers in 1998 and $65,000 in earnings from 15 employers in 1997.

• SSA issued 12 replacement SSN cards to a 19-year-old male (23 cards over his lifetime). He had $113,000 in earnings from 24 employers in 19 States during 1999.

• SSA issued 6 replacement SSN cards to a 25-year-old male (13 cards over his lifetime). He had $106,000 in earnings from 12 employers in 8 States during 1999. He also had over $10,000 in earnings that went into the ESF under his SSN (but a different name) in 1999. In addition, he had $83,000 in earnings from 10 employers in 1998, and $60,000 in earnings from 13 employers in 1997.

• SSA issued 10 replacement SSN cards to a 90-year-old female (18 cards over her lifetime). Given her advanced age, we question the need for the number of cards obtained, and we believe someone else may have obtained these cards for suspect reasons. For example, someone could have obtained these cards to assume her identity or improperly obtain benefits and services.

• SSA issued 7 replacement SSN cards to a 30-year-old male (20 cards over his lifetime). He had $89,000 in earnings from 12 employers in 10 States during 1999. He had less than $11,000 in total earnings from 1994 through 1998.

• SSA issued 14 replacement SSN cards to a 33-year-old male (78 cards over his lifetime).

Because SSA does not limit the number of replacement SSN cards it issues an individual, the Agency issues multiple cards to many individuals, some of whom misuse them. Furthermore, FO personnel increase the Agency’s exposure to such activity when they do not comply with enumeration policies and procedures when processing applications for replacement SSN cards.

Through interviews and observations at the 10 FOs, we determined that SSA personnel did not always comply with enumeration policies and procedures when processing applications for replacement SSN cards. For example, our review of 290 applications (based on either in-person interviews or mail receipts) showed SSA issued 45 (16 percent) replacement SSN cards that should not have been issued based on the applicant’s documentary evidence. The most common occurrences of FO personnel’s noncompliance with enumeration policies and procedures follow.

• Failure to require applicants to provide two or more of the following items: name, signature, age, date of birth, or parents’ name when presenting a non-picture identity document.

• Acceptance of unallowable identity documents.

• Failure to require proper documentation in support of a name change.

• Failure to seek secondary verification of INS documents when indicated by the SAVE program.

In addition to our review of the 290 applications discussed above, we also reviewed 200 previously processed applications for replacement SSN cards. Of the 490 applications, 102 had alien registration numbers (or "A" number) that we verified through INS’ Alien Status Verification Index (ASVI), which is part of the Agency’s SAVE program. ASVI indicated "institute secondary verification" for 27 of these at the time of our review; therefore, we independently verified them with the INS. The INS confirmed that 6 of the 27 individuals had been in the United States over 30 days when they applied for SSNs and that ASVI would have indicated "institute secondary verification" at that time. As such, according to SSA policy, FO personnel should have submitted the documents to INS for independent verification of their authenticity.

The INS confirmed all six documents were invalid. The INS also confirmed that three additional documents were invalid, but these individuals had been in the country for less than 30 days, and SSA policy does not require FO personnel to verify these documents with INS. Nevertheless, 9 (9 percent) of the 102 individuals who presented evidentiary documents containing an "A" number improperly obtained a replacement SSN card.

Moreover, FO personnel told us they did not always use tools, such as black lights and INS guides, to assist them in detecting invalid evidentiary documents. FO personnel in 5 (50 percent) of the 10 FOs we visited told us they did not routinely use a black light. Rather, they generally relied on visual inspection to identify invalid evidentiary documents, thus making identification difficult given the quality of such documents. In fact, 2 of the 10 FOs we visited did not have a black light or it had been broken for years. Furthermore, FO personnel told us they did not always compare information on the SS-5 with the applicant’s Numident record to ensure information the applicant provided matched SSA records. We also observed FO personnel who provided key information (for example, mother’s and father’s name and date of birth) to the applicant while assisting them in completing their SS-5 application for a replacement card. We believe the purpose of requiring applicants to fully complete the SS-5 is to ensure they are who they purport to be and the information they provide matches SSA’s records.

FO personnel also told us they often issue replacement cards even though they have concerns about the probative value of supporting identity documents. For example, personnel at one FO told us they accept a local county health department’s identification document as evidence of identity, knowing that anyone can obtain one just by giving a name. FO personnel also told us they often don’t have time to verify suspect documentary evidence due to a large workload.

FO personnel told us they do not always comply with enumeration policies and procedures because they feel pressure to serve applicants as quickly as possible. That is, SSA’s emphasis on customer service discourages FO personnel from utilizing tools that could detect fraudulent activity. Although we recognize the need to satisfy customer demands, we do not believe that prompt customer service should take precedent over preventing and detecting fraudulent activity.

Conclusions andRecommendations

Despite SSA’s commitment to eliminating opportunities for fraud and misuse in its enumeration process, the Agency’s risk of exposure to such activity remains. We recognize SSA has limited control over individuals who intentionally choose to misuse replacement SSN cards the Agency appropriately issued. However, we believe SSA has a duty to safeguard the integrity of SSNs by reducing opportunities for individuals to engage in such activity. Given the potential for individuals to improperly obtain and misuse replacement SSN cards, as evidenced by the examples presented in this report, we believe SSA would benefit by taking a more proactive role in eliminating opportunities of such activity.

We believe the actions recommended in previous reports and those in this report will assist SSA in reducing its risk from individuals who improperly obtain and misuse replacement SSN cards. Accordingly, we recommend that SSA:

1. Develop regulations and incorporate appropriate system controls to limit the number of replacement SSN cards an individual can receive during a 12-month period to 3 and over a lifetime to 10. SSA should implement a two-pin process requiring management personnel to approve extraordinary circumstances that warrant exceptions.
2. Re-emphasize the importance of following enumeration policies and procedures associated with the issuance of replacement SSN cards, including the requirement to independently verify INS documents when indicated by SSA policy and the SAVE program.
3. Conduct an inventory to determine the number of FOs that have operational black lights and INS document guides to use when verifying evidentiary documents. SSA should supply or repair these tools if necessary.
4. Test FO compliance with procedures for issuing replacement SSN cards when performing periodic enumeration quality reviews. Additional training and/or supervision should be provided to employees if necessary.

Regarding Recommendation 1, SSA agreed it needs to look more carefully at the issuance of replacement cards to ensure it takes every advantage of systematic controls, such as limits, that might allow SSA to more effectively identify risk factors and avoid the issuance of multiple replacement cards in questionable situations. SSA also stated it is beginning further assessment to determine the most effective systematic protocols to pursue.

SSA agreed with Recommendation 2 and stated that, by September 30, 2001, the Office of Operations will issue a reminder to all field offices, stressing the importance of following enumeration policies and procedures.

SSA stated it believes current procedures address Recommendation 3. Specifically, the Agency stated every FO has a copy of the Administrative Confidential Memorandum, which is the INS’ guide for examining INS documents. SSA also stated the Regional Integrity on-site security review or FO self-review includes actions to verify the FO’s black light is operational. Additionally, SSA stated it is working with INS to provide SSA employees access to more INS automated records and to implement an Enumeration at Entry initiative.

SSA believes it can address Recommendation 4 through reminder items and training. SSA stated the Office of Quality Assurance and Performance Assessment (OQA) conducts an annual end-of-line review of both original and replacement cards issued to access the accuracy of the process. Upon issuance of the next OQA report, the Deputy Commissioner for Operations will include a reminder for the regional offices to have FOs conduct refresher training as indicated by OQA’s findings and to remind staff that they need to comply with all procedures for issuing replacement SSN cards.

SSA also provided technical comments that we considered and incorporated, where appropriate. The full text of SSA’s comments is included in Appendix D.

We believe SSA’s response and planned actions adequately address Recommendations 1, 2, and 4. However, we believe SSA’s response to Recommendation 3 does not effectively respond to our goal of reducing opportunities for individuals to improperly attain and misuse replacement SSN cards.

Regarding SSA’s response to Recommendation 3, we acknowledge SSA’s efforts in working with the INS to provide SSA employees access to more INS automated records and to implement the Enumeration at Entry initiative. While we believe these initiatives will prove useful in the future, full implementation may be years away. In the meantime, we continue to believe FO personnel should use every tool available, such as black lights and INS guides, to assist them in detecting invalid evidentiary documents.

In its response, SSA stated every FO has a copy of The Administrative Confidential Memorandum. We question how the Agency can make such a statement without conducting an inventory as we suggested. As discussed in the report, 5 (50 percent) of the 10 FOs we visited told us they did not routinely use a black light. In fact, two FOs either did not have a black light or the light had been broken for years. Given the importance of preventing individuals from fraudulently obtaining replacement SSN cards, we continue to believe SSA should ensure that all FOs have operational black lights and INS document guides to use when verifying evidentiary documents. Therefore, we also ask that SSA reconsider its response to this recommendation.

Appendices

Sample Methodology

To determine the frequency of replacement Social Security number (SSN) cards the Social Security Administration (SSA) issued from April 1, 1999 through March 31, 2000, we obtained a data extract from the Modernized Enumeration System. This population totaled over 11 million replacement SSN cards. From this population, we identified 35,324 number holders to whom SSA issued 3 or more replacement cards. We reviewed the 192 SSNs where SSA issued 6 or more replacement cards, and we randomly selected a weighted sample of 100 SSNs from the 35,132 SSNs where SSA issued 3 to 5 replacement cards. Table A.1. shows the distribution of individuals receiving multiple replacement SSN cards and sample size.

Table A.1.: Population and Sample Sizes for Individuals Receiving Multiple Replacement SSN Cards

For all cases reviewed, we obtained the following information from these SSA sources.

Using queries from these SSA systems, we assessed the potential for individuals to improperly obtain and misuse replacement SSN cards.

Sample Characteristics Measured

Sample Appraisals

CONFIDENCE LEVEL: We are 90-percent confident the actual number of instances of potential SSN misuse in the population is between 3,913 and 8,570.

CONFIDENCE LEVEL: We are 90-percent confident the actual number of individuals who received 10 or more lifetime replacement SSN cards in the population is between 4,207 and 8,961.

Agency Comments

OIG Contact and Staff Acknowledgments

Kimberly A. Byrd, Acting Director, Operational Audits Division, (205) 801-1605

In addition to those named above:

Jeff Pounds, Senior Program Analyst
Charles Lober, Senior Auditor
Ellen Justice, Auditor
Susan Phillips, Program Analyst
Theresa Roberts, Auditor
Kathy Youngblood, Senior Auditor
Kimberly Beauchamp, Writer-Editor

The Office of Audit (OA) conducts comprehensive financial and performance audits of the Social Security Administration’s (SSA) programs and makes recommendations to ensure that program objectives are achieved effectively and efficiently. Financial audits, required by the Chief Financial Officers Act of 1990, assess whether SSA’s financial statements fairly present the Agency’s financial position, results of operations, and cash flow. Performance audits review the economy, efficiency, and effectiveness of SSA’s programs. OA also conducts short-term management and program evaluations focused on issues of concern to SSA, Congress, and the general public. Evaluations often focus on identifying and recommending ways to prevent and minimize program fraud and inefficiency.

OEO supports the OIG by providing information resource management; systems security; and the coordination of budget, procurement, telecommunications, facilities and equipment, and human resources. In addition, this office is the focal point for the OIG’s strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act. OEO is also responsible for performing internal reviews to ensure that OIG offices nationwide hold themselves to the same rigorous standards that we expect from SSA, as well as conducting investigations of OIG employees, when necessary. Finally, OEO administers OIG’s public affairs, media, and interagency activities, coordinates responses to Congressional requests for information, and also communicates OIG’s planned and current activities and their results to the Commissioner and Congress.

The Office of Investigations (OI) conducts and coordinates investigative activity related to fraud, waste, abuse, and mismanagement of SSA programs and operations. This includes wrongdoing by applicants, beneficiaries, contractors, physicians, interpreters, representative payees, third parties, and by SSA employees in the performance of their duties. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.

The Counsel to the Inspector General provides legal advice and counsel to the Inspector General on various matters, including: 1) statutes, regulations, legislation, and policy directives governing the administration of SSA’s programs; 2) investigative procedures and techniques; and 3) legal implications and conclusions to be drawn from audit and investigative material produced by the OIG. The Counsel’s office also administers the civil monetary penalty program.