THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
PAYEES FOR THE SOCIAL
IN THE SEATTLE REGION
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.
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.
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.
Date: March 8, 2005
To: Carl L. Rabun
Regional Commissioner Seattle
From: Inspector General
Subject: Individual Representative Payees for the Social Security Administration in the Seattle Region (A-09-05-15057)
Our objective was to confirm that beneficiaries in the care of representative payees existed; and, through personal observation and interviews, to determine whether the beneficiaries' food, clothing, and shelter needs were being met.
Some individuals cannot manage or direct the management of their finances because of their youth or mental and/or physical impairments. Congress granted the Social Security Administration (SSA) the authority to appoint representative payees to receive and manage these beneficiaries' benefit payments. A representative payee may be an individual or an organization. SSA selects representative payees for Old Age, Survivors and Disability Insurance beneficiaries and Supplemental Security Income (SSI) recipients when representative payments would serve the individual's interests.
SSA's primary concern is to select the payee who will best serve the beneficiary's
interest; and preference is normally given to a parent, legal guardian, spouse,
or other relative of a beneficiary. SSA considers payments to a representative
payee to have been used for the benefit of the beneficiary if they were spent
on the beneficiary's current maintenance-which includes the costs incurred in
obtaining food, shelter, clothing, medical care, and personal comfort
We are conducting a nation-wide review of individual representative payees serving 14 or fewer beneficiaries (Appendix C). There are approximately 4.3 million of these types of representative payees who serve approximately 5.5 million beneficiaries. We selected a random sample of 275 individual representative payees for review, of which 5 were in the Seattle Region. These five representative payees receive and manage approximately $3,343 in monthly benefits for five beneficiaries.
RESULTS OF REVIEW
We confirmed the existence of the five beneficiaries in the care of the five representative payees in the Seattle Region; and, through personal observation and interviews, we found that all five beneficiaries' food, clothing, and shelter needs were being met. Nothing came to our attention that would lead us to believe the representative payees did not use the Social Security benefits received for the beneficiaries' needs. However, we found one representative payee turned over a significant portion of a benefit check directly to a beneficiary who may have been capable of managing his own benefits. In addition, we found that SSA did not take prompt action on the events reported by two representative payees.
Beneficiary May Have Been Capable of Managing His Own Benefits
A representative payee's primary responsibility is to ensure the beneficiary's day to day needs are met. This includes food, shelter, clothing, medical care, and personal comfort items. It also includes, but is not limited to, regularly meeting with the beneficiary to ascertain his/her current and foreseeable needs.
Of the five representative payees in our sample, one turned over a significant portion of the benefit check directly to the beneficiary. This occurred because the representative payee believed the beneficiary was capable of managing his own benefits. The beneficiary received $564 in monthly benefits. The representative payee estimated that she turned over $536 (95 percent) to the beneficiary. SSA policy allows this practice as long as the representative payee gives the beneficiary direction or instruction about how to use the funds. In addition, the representative payee must be able to accurately account for how the benefits were used. However, SSA policy also states this practice may suggest the beneficiary is capable of managing his/her own benefits.
According to the representative payee, the beneficiary used these funds to pay for such expenses as rent, utilities, insurance, food, and clothing. Each month, the beneficiary submitted a list of planned expenses to the representative payee. In addition, the representative payee generally obtained receipts to verify these expenses. SSA staff advised the representative payee to continue this practice and closely monitor the beneficiary's use of his funds. In addition, SSA staff advised the representative payee to contact the local SSA field office if the beneficiary believes he is capable of managing his own funds. At that time, SSA will reevaluate the beneficiary's need for a representative payee.
SSA Did Not Take Prompt Action on Events Reported by Representative Payees
Representative payees must report events, such as changes in income and living arrangements, on behalf of SSI recipients. SSA must act as quickly as possible to determine whether such events affect the recipient's SSI eligibility or payment amount.
For two of the five representative payees in our sample, we found that SSA did not take prompt action on the events reported by its representative payees. These events involved SSI recipients who had changes in income and living arrangements. Although both representative payees had notified the SSA field office of these events, SSA did not perform a timely review to determine whether the recipients' entitlement or payment amount was affected. As a result, one recipient received $340 in SSI overpayments.
In one case, the representative payee maintained a household for his stepdaughter, stepson, and son (the recipient). The representative payee informed SSA that his stepdaughter and stepson had moved out of the household in April and July 2004, respectively. However, these individuals were still included as part of the household at the time of our site visit. Because of the change in living arrangements, the recipient received $340 in SSI overpayments for March through September 2004. During our review, SSA took corrective action and established the overpayment.
In the other case, the representative payee and his wife (the recipient) moved into an apartment in May 2004. The representative payee received free rent and utilities as the apartment manager and promptly reported such income to SSA. However, at the time of our site visit, SSA had not determined whether the change in income affected the recipient's entitlement or payment amount. SSA subsequently performed a redetermination and concluded the change in income did not result in an overpayment.
CONCLUSIONS AND RECOMMENDATIONS
We confirmed the existence of the five beneficiaries in the care of the representative payees. In addition, based on our observations and interviews, the beneficiaries' food, clothing, and shelter needs were being met. However, for one individual, we found the representative payee turned over a significant portion of the benefit check directly to a beneficiary who may have been capable of managing his own benefits. We also found that SSA did not take prompt action on the events reported by two representative payees.
We recommend that SSA:
1. Follow up with the representative payee to determine whether the beneficiary is capable of managing his benefits.
2. Make appropriate collection efforts for the $340 overpayment resulting from the change in living arrangements for one representative payee.
3. Ensure field offices take prompt action on any events reported by representative payees that may affect the recipient's entitlement or payment amount.
SSA agreed with all of our recommendations. See Appendix D for the text of SSA's comments.
Patrick P. O'Carroll, Jr.
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
C.F.R. Code of Federal Regulations
POMS Program Operations Manual System
SSA Social Security Administration
SSI Supplemental Security Income
U.S.C. United States Code
Scope and Methodology
Our population included all individual representative payees within the contiguous 48 States serving 14 or fewer beneficiaries as of May 20, 2004. To accomplish our objective, we:
Reviewed the Social Security Administration's policies and procedures for monitoring representative payees and their responsibilities for the beneficiaries in their care.
Obtained a data extract of representative payees from the Representative Payee System as of May 2004 meeting our selection criteria.
Selected a random sample of 275 representative payees nation-wide. We are issuing a separate report on the nation-wide results, as well as separate reports for each of the 10 SSA regions.
For the five representative payees in the Seattle Region, we
verified the identities of five representative payees and five beneficiaries they served;
interviewed five representative payees;
interviewed five beneficiaries; and
visited and observed the living conditions of five beneficiaries.
We performed our review in Corvallis, Oregon; Salem, Oregon; Longview, Washington; Oak Harbor, Washington; and Spokane, Washington. Field work was conducted between August and September 2004. We conducted our review in accordance with Quality Standards for Inspections issued by the President's Council on Integrity and Efficiency.
Sampling Methodology and Results
We obtained a data extract from the Social Security Administration's Representative Payee System of all individual representative payees having 14 or fewer beneficiaries in their care as of May 20, 2004. This population was 5,380,635 representative payees serving 6,818,696 beneficiaries.
From this population, we excluded representative payees who had any of the
residing outside the 48 contiguous States;
identified in the Representative Payee System as only serving as their own payee;
having all beneficiaries in their care in noncurrent pay status;
having an invalid State code or military address; or
managing total funds of $50 or less monthly.
This reduced our sample population to 4,306,779 payees serving 5,520,303 beneficiaries. We randomly selected 275 representative payees from this sample population for review.
Seattle Region Sample Cases
Initially, 5 of the 275 sample cases chosen were located in the Seattle Region. However, one representative payee was dropped from our review because of the beneficiary's death. One representative payee was added to our Region for review because a representative payee in the Chicago Region stopped serving as a payee, and the replacement sample case randomly chosen was located in the Seattle Region.
Accordingly, our review of the Seattle Region consisted of five representative payees. Our findings in the Seattle Region will be included in a national report, where statistical projections will be made. The following table provides the details of our sampling results in the Seattle Region.
Sample Results Number
of Cases Dollar Amount of Cases
SSA Did Not Take Prompt Action on Reported Events 2 $340
Date: March 1, 2005
To: Inspector General
From: Regional Commissioner
Subject: Individual Representative Payees for the Social Security Administration in the Seattle Region (A 09 05 15057) - SEATTLE REPLY
Thank you for the opportunity to comment on the draft report of the OIG audit on Individual Representative Payees in the Seattle Region. We are pleased that the audit found that the representative payees appeared to be using the Social Security and Supplemental Security Income benefits for the beneficiaries' needs. We understand the importance of ensuring that payees fully understand their responsibilities and we remain committed to continuing to provide support and guidance to our field personnel to preserve the integrity of the representative payee program in the Seattle Region.
You provided us with three recommendations in this report. Our response to each recommendation is below:
Follow up with the representative payee to determine whether the beneficiary is capable of managing his benefits.
We agree with this recommendation.
We evaluated the individual's capability and made him his own representative payee on February 1, 2005.
Make appropriate collection efforts for the $340 overpayment resulting from the change in living arrangements for one representative payee.
We agree with this recommendation.
We posted the overpayment to the record on September 13, 2004 and sent the individual a notice of overpayment on September 28, 2004.
Ensure field offices take prompt action on any events reported by representative payee that may affect the recipient's entitlement or payment amount.
We agree with this recommendation.
We will continue to provide appropriate guidance and assistance to our employees so that representative payee reports that may affect entitlement or payment amounts are handled timely.
Thank you for the opportunity to comment on the draft report. If your staff have any questions, they may contact Joan Nicholson, RSI Programs and Systems Team, by phone at 206 615 2128 or by email at firstname.lastname@example.org.
Carl L. Rabun
OIG Contacts and Staff Acknowledgments
James J. Klein, Director, San Francisco Audit Division, (510) 970-1739
Jack H. Trudel, Audit Manager, (510) 970 1733
In addition to those named above:
Brennan Kraje, Statistician
Kimberly Beauchamp, Writer Editor
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 Specialist at (410) 966 1375. Refer to Common Identification Number A 09 05 15057.
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.