OFFICE OF
THE INSPECTOR GENERAL
SOCIAL SECURITY
ADMINISTRATION
FOLLOW-UP: CONCURRENT TITLE II
AND XVI BENEFICIARIES
RECEIVING REPRESENTATIVE
PAYEE AND DIRECT PAYMENTS
August 2009 A-09-09-19019
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:
m Conduct
and supervise independent and objective audits and investigations relating to
agency programs and operations.
m Promote
economy, effectiveness, and efficiency within the agency.
m Prevent
and detect fraud, waste, and abuse in agency programs and operations.
m Review
and make recommendations regarding existing and proposed legislation and
regulations relating to agency programs and operations.
m 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:
m
m Access
to all information necessary for the reviews.
m 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.
Date: August 20, 2009 Refer To:
To: The
Commissioner
From: Inspector General
Subject: Follow-up: Concurrent
Title II and XVI Beneficiaries Receiving Representative Payee and Direct
Payments (A-09-09-19019)
OBJECTIVE
Our
objective was to determine whether the Social Security Administration (SSA) had
improved its controls to prevent the direct payment of concurrent Title II[1]
and XVI[2]
benefits to individuals who had been appointed a representative payee.
BACKGROUND
SSA pays benefits under Titles II
and XVI of the Social Security Act. The Title II program provides benefits to
retired and disabled workers, including their dependents and survivors.[3] The Title XVI program provides payments to
financially needy individuals who are aged, blind, or disabled.[4]
Some individuals cannot manage or direct the management of
their finances because of their youth or mental or physical impairments. Congress granted SSA the authority to appoint
representative payees to receive and manage these beneficiaries’ payments.[5]
A representative payee may be an
individual or an organization. SSA
selects representative payees for Title II and XVI beneficiaries when
representative payments would serve the beneficiaries’ interests. Representative
payees are responsible for using benefits in the beneficiary’s best interests.[6]
Individuals
who apply for Title XVI payments must apply for other program benefits,
including Title II benefits.[7] For Title II benefits, individuals must apply
under their own Social Security number (SSN) and/or under another’s SSN to
receive child or spousal benefits.[8] SSA policy states that one representative payee
is appointed for all benefits to which the beneficiary is entitled.[9]
Our 2006 audit[10]
found that SSA needed to improve its controls to prevent the direct payment of
concurrent benefits to individuals who had been appointed a representative
payee. Specifically, we identified
11,399 concurrently entitled beneficiaries who received an estimated $166
million in direct payments while representative payees also received $175
million in payments on behalf of these beneficiaries. Our prior report included several
recommendations for corrective action.
In response to our prior recommendations, SSA completed a
match between the Master Beneficiary (MBR) and Supplemental Security Records
(SSR)[11]
in June 2006 to identify concurrently entitled beneficiaries being paid
directly and through a representative payee.
Additionally, SSA modified the Representative Payee System (RPS) to
prevent the selection of different payees for concurrently entitled
beneficiaries.
There are approximately 588,000 individuals with representative
payees who are concurrently eligible for Title II and XVI benefits. In October 2008, we conducted a match of
SSA’s records and identified 9,276 concurrently entitled beneficiaries who were
likely receiving their benefits directly and through a representative payee.
RESULTS OF REVIEW
SSA’s corrective actions had improved its controls to prevent the
direct payment of concurrent benefits to individuals who had been appointed a
representative payee. Specifically, we
found that SSA’s match of the MBR and SSR had reduced the number of individuals
who had been receiving their benefits through conflicting payment methods. In addition, SSA modified RPS to prevent the selection
of different payees for concurrently entitled beneficiaries. However, we found that SSA staff could bypass
RPS and establish direct payments for concurrently entitled beneficiaries who had
representative payees, and did not always resolve conflicting representative
payment information for concurrently entitled beneficiaries.
Based on our review of a random
sample of 200 concurrently entitled beneficiaries who
were receiving their benefits directly and through representative payees, we estimate that about 7,931 beneficiaries received approximately
$43.6 million in direct payments, and their representative payees received about
$59.4 million on their behalf.
Further, if SSA does not determine whether the 7,931 concurrently
entitled beneficiaries should be paid directly or through a representative
payee, we estimate that approximately $56 million in additional benefit
payments will be paid over the next 12 months.
This includes approximately $24.7 million that will be paid directly to
beneficiaries (see Appendix C).
Concurrent Payments Made to Beneficiaries and
Representative Payees
SSA policy[12]
states that all adult beneficiaries are presumed competent to manage or direct
someone else to manage their benefits unless there is evidence to the
contrary. If doubts arise regarding
beneficiaries’ ability to manage or direct the management of their funds, SSA will determine their capability. In addition, legally
incompetent beneficiaries should be appointed a representative payee, as should
children under age 18.[13]
When concurrently entitled beneficiaries are
determined incapable, one representative payee should be appointed for both
benefits.
Of the 200 concurrently entitled
beneficiaries in our sample, we found that
171[14] (85
percent) were receiving 1 benefit directly and 1 through a representative payee.
The total amount paid to, and on behalf
of, these beneficiaries was approximately $2.2 million. Projecting our results to the population of 9,276 beneficiaries,
we estimate SSA paid benefits totaling about $103 million to approximately
7,931 beneficiaries (see Appendix C).
The following chart includes the payments made to the beneficiaries and
their representative payees.
Payments Made to Concurrently Entitled
Beneficiaries
Benefit Payments |
Paid to Beneficiary |
Paid to Representative Payee |
Total Paid |
Amount Paid |
|||
Average Payment |
$12,994 |
||
Estimate for Population |
$103,055,592 |
Effectiveness of SSA’s MBR and SSR
Match to Correct Payment Discrepancies
In response
to our prior audit, SSA conducted a match between the MBR and SSR in June 2006. The match identified 17,622 concurrently
entitled beneficiaries being paid directly and through a representative
payee. In addition, SSA provided its
employees instructions to resolve the discrepancies and determine whether the
beneficiaries were capable of managing their benefits.
Based on our sample analysis from
the population of 9,276 concurrently entitled beneficiaries, we concluded that SSA’s match was generally effective in
identifying and resolving these cases. Specifically,
we found that only 18 (11 percent) of the 171 payment discrepancies were
not identified or corrected by SSA’s June 2006 match. However, 153 (89 percent) of the 171 payment
discrepancies occurred after SSA’s match operation. The following chart shows the number of
beneficiaries with payment discrepancies who were not identified or corrected
by SSA’s match and the number of new occurrences since SSA’s match.
Payment
Discrepancies Before and After SSA Match
Description |
Number of Beneficiaries |
Percent of Beneficiaries |
Payment
Discrepancy Not Identified or Corrected by SSA’s Matching Operation |
11 |
|
Payment Discrepancy Occurred After SSA’s Matching Operation |
153 |
89 |
Total |
100 |
For example, in one case, SSA
appointed a representative payee to receive a beneficiary’s Title XVI payments. In June 2000, the beneficiary became eligible
for Title II benefits. However, SSA
did not appoint a representative payee to receive the Title II benefits. Consequently, from June 2000 to December
2008, the beneficiary received $23,983 in direct payments, and the
representative payee received $36,544 on the beneficiary’s behalf.
Representative Payee Information Not Entered in RPS
RPS was developed as a result of
legislation[15] requiring
that SSA more thoroughly investigate individuals applying to be representative
payees and establish a centralized database of information about representative
payees. RPS contains data about
representative payee applicants, beneficiaries in each representative payee’s
care, and the relationship between the representative payees and the
beneficiaries they serve. It provides
SSA employees with immediate access to vital information about representative
payees, which assists them in making representative payee decisions. In addition, SSA employees are required to
document all entitlements to which a beneficiary is eligible in RPS.[16] Finally, SSA policy states that one
representative payee is appointed for all benefits to which a beneficiary is
entitled.[17]
In response to our prior report,
SSA modified RPS to prevent the direct payment of concurrent benefits to individuals
with representative payees. However, if
SSA staff does not enter necessary representative payee information in RPS, it
will not prevent the direct payment from occurring. Our review found that 88 of the 171
beneficiaries with payment discrepancies had no representative payee
information in RPS for either the Title II or XVI entitlements. In those instances, the representative payee
information was only recorded in SSA’s payment records (that is, MBR or SSR). As a result, RPS could not prevent the
payment discrepancy from occurring.
For example, in March 2002, SSA
appointed a representative payee to receive a beneficiary’s Title II benefits. Information about the representative payee
was recorded on the MBR and in RPS. The
beneficiary subsequently became entitled to Title XVI payments in March 2008. At that time, SSA staff did not review the
beneficiary’s MBR or RPS and therefore was not aware SSA had previously
determined the beneficiary was incapable of managing his benefits. Furthermore, since the beneficiary’s Title
XVI entitlement was not entered into RPS, it did not prevent the direct payment
of benefits to the beneficiary. Consequently,
from March to December 2008, the beneficiary received $3,813 in direct payments,
and the representative payee received $4,618 on the beneficiary’s behalf.
Conflicting Representative Payee Information in SSA’s
Records Was Not Resolved
We found that SSA had partially
processed representative payee selections for 57 of the 171 beneficiaries
with payment discrepancies in our sample.
In these cases, SSA had determined the 57 beneficiaries needed a
representative payee; however, the selections were not finalized because of
conflicting information in SSA’s systems.
For example, a selection could not be finalized because the type of payee
(for example, mother, son, individual, organization) on the MBR or SSR did not
agree with the type of payee information in RPS. RPS maintains data on pending cases, and SSA
staff is required to review RPS at least monthly to identify and resolve these cases. However, we found that the 57 partially
processed representative payee selections in our sample had been pending for an
average of 14 months.
For example, a beneficiary
entitled to Title II benefits since January 1988 became entitled to Title XVI payments
in October 1988. In September 2006, SSA
appointed a representative payee to receive Title II benefits on the beneficiary’s
behalf. At the same time, SSA approved
the representative payee for the Title XVI payments; however, RPS did not complete
the payee appointment. As a result, the
beneficiary continued to receive Title XVI benefits directly. Consequently, the beneficiary received direct
payments of $2,466 while the representative payee received $6,702 from October
2006 through December 2008.
Impact of Concurrent Benefits Paid to
Representative Payees and Beneficiaries
SSA is responsible for determining
whether beneficiaries are capable of managing their own funds or directing
someone else to manage their funds. Making
payments to representative payees for beneficiaries who are capable
deprives the individuals of financial independence to determine how their benefits
are spent. Conversely, if SSA pays
incapable beneficiaries directly, their basic needs (food, clothing and
shelter) may not be met.
Furthermore,
when SSA is unaware of the conflicting payment methods, not all benefit
payments, conserved funds, and other financial resources may be included in the
annual Representative Payee Report. Representative payees are required to provide
SSA this Report to account for how
they spent and conserved benefits.[18] SSA requires a single Representative Payee Report to account for all benefits paid to
concurrently entitled beneficiaries.[19] SSA uses the Report to determine whether beneficiaries exceeded the resource
limit[20]
under the Title XVI program.
CONCLUSION AND
RECOMMENDATIONS
SSA’s corrective actions have
resulted in improvement in its controls to prevent concurrent Title II and XVI
beneficiaries from receiving representative payee and direct payments. However, since SSA has
not conducted additional matching operations, 153 (89 percent) of the 171 beneficiaries
with payment discrepancies started
receiving their benefits directly and through a representative payee after June
2006.
We recommend that SSA:
1.
Conduct periodic
matches and/or develop systems alerts to identify and correct instances in
which concurrent payments are made directly to beneficiaries and representative
payees.
2.
Remind SSA staff to
use RPS when processing representative payee actions and to review the MBR/SSR to
verify whether beneficiaries are concurrently entitled when making representative
payee determinations.
AGENCY COMMENTS
SSA agreed with our
recommendations. The Agency’s comments
are included in Appendix D.
/s/
Patrick
P. O’Carroll, Jr.
Appendices
APPENDIX A – Acronyms
APPENDIX B – Scope and Methodology
APPENDIX C – Sampling Methodology and Results
APPENDIX D – Agency Comments
APPENDIX E – OIG Contacts and Staff
Acknowledgments
Acronyms
C.F.R. |
|
MBR |
|
OIG |
|
POMS |
|
RPS |
|
SSA |
|
SSN |
Social
Security Number |
SSR |
|
Title
II |
|
Title
XVI |
|
U.S.C. |
Scope and
Methodology
We obtained an extract from the
Master Beneficiary (MBR) and Supplemental Security Records (SSR) of
concurrently entitled beneficiaries who were likely receiving both
representative payee and direct payments.
We identified 9,276 concurrent beneficiaries who potentially had
conflicting payment methods as of October 1, 2008. From this population, we randomly selected a
sample of 200 beneficiaries for review.
To accomplish our objective, we
·
reviewed applicable Federal
laws and regulations, as well as the Social Security Administration’s (SSA)
Program Operations Manual System;
·
interviewed SSA staff from
the Office of Income Security Programs; and
·
selected a random
sample of 200 concurrent beneficiaries and obtained queries from SSA’s MBR,
SSR, and Retirement Survivors and Disability Insurance Payment History, Treasury
Check Information System, as well as the Representative Payee System.
We evaluated the adequacy of SSA’s
controls to prevent the direct payment of concurrent benefits to individuals
who had been appointed a representative payee.
Specifically, we determined whether the interface between the MBR and
SSR identified situations in which benefit payments were paid both directly and
to representative payees for concurrently entitled beneficiaries. The amounts reported represent the total
benefit payments made to and on behalf of the concurrent beneficiaries from May
2006 through December 2008.
We performed our audit work in
Sampling Methodology and Results
On October 1, 2008, we obtained a
data extract from the Social Security Administration’s (SSA) Master Beneficiary
and Supplemental Security Records of concurrent beneficiaries with potential conflicting
payment methods. The concurrent
beneficiaries were in current pay status and were likely receiving both
representative payee and direct payments.
We randomly selected 200 concurrently entitled
beneficiaries for review. For each
sample item, we determined whether the conflicting payment methods existed and
computed the amounts paid to, and on behalf of, the beneficiaries from May 2006
through December 2008.
Of the 200 concurrently entitled beneficiaries in our sample, we
found that 171 beneficiaries received $941,004 in direct payments while representative
payees received $1,280,979 on behalf of the beneficiaries.[21]
Projecting these results to our
population of 9,276 concurrently entitled beneficiaries, we estimate SSA paid about
7,931 beneficiaries approximately $43.6 million in direct payments while their representative
payees received about $59.4 million.
Further, if SSA does not resolve whether the 7,931 concurrent
beneficiaries should be paid directly or through a representative payee, we
estimate that additional benefit payments totaling approximately $56 million
will be paid over the next 12 months.
This includes approximately $24.7 million that will be paid directly to
beneficiaries. These estimates are based
on the monthly benefit paid to the 146 beneficiaries who were still receiving
payments in December 2008. The following
tables provide the details of our sample results and statistical projections.
Table 1 – Population and Sample Size
Table 2 – Conflicting Payment Methods
Description |
Number of Beneficiaries |
Direct Payments |
Representative Payee |
Point Estimate |
|||
Lower Limit |
|||
Upper Limit |
Note: All statistical projections are at the
90-percent confidence level.
Table 3 – 12-Month Estimate for Conflicting Payment Methods
Description |
Direct Payments |
Representative Payee Payments |
Totals |
$1,208,237 |
|||
Point Estimate |
$56,038,051 |
||
Lower Limit |
|
||
Upper Limit |
|
Note: All statistical projections are at the
90-percent confidence level.
Agency Comments
MEMORANDUM
|
Date: |
July 30, 2009 Refer |
Refer To: S1J-3 |
To: |
Patrick P. O'Carroll, Jr. Inspector General |
From: |
James A. Winn
/s/ Jo Tittel for Chief of Staff |
Subject: |
Office of the Inspector
General (OIG) Draft Report, “Follow-up:
Concurrent Title II and XVI Beneficiaries Receiving Representative
Payee and Direct Payments” (A-09-09-19019)--INFORMATION |
Thank you for the opportunity to review and comment on the draft
report. We appreciate the comprehensive
work the OIG auditing team did on this report.
Our response to the report findings and recommendations is attached.
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 DRAFT REPORT, “FOLLOW-UP: CONCURRENT TITLE II AND XVI BENEFICIARIES
RECEIVING REPRESENTATIVE PAYEE AND DIRECT PAYMENTS” (A-09-09-19019)
Recommendation 1
Conduct
periodic matches and/or develop systems alerts to identify and correct
instances in which concurrent payments are made directly to beneficiaries and
representative payees (rep payees).
Comment
We agree. We will perform periodic matches to identify
the problem cases and take the necessary corrective actions.
Recommendation 2
Remind
staff to use the Representative Payee System when processing rep payee actions
and to review the Master Beneficiary Record/Supplemental Security Record to
verify whether beneficiaries are concurrently entitled when making rep payee
determinations.
Comment
We agree. We
will issue a reminder to staff of the appropriate procedures to follow when
processing rep payee actions and making rep payee determinations.
OIG Contacts and Staff Acknowledgments
James J. Klein, Director, San Francisco Audit Division
Joseph I. Robleto, Audit Manager
Acknowledgments
In addition
to those named above:
Timothy E. Meinholz, 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‑09‑09‑19019.
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,
Chairman
and Ranking Minority Member, Subcommittee on Labor, Health and Human Services,
Education and Related Agencies, Committee on Appropriations,
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.
[1] The Old-Age, Survivors and Disability Insurance
Program.
[2] The Supplemental Security Income Program.
[3] The Social Security Act,
§§ 201-234, 42 U.S.C. §§ 401-434.
[4] The Social Security Act,
§§ 1601-1637, 42 U.S.C. §§ 1381-1383f.
[5] We use the term “beneficiary” generically in this
report to refer to both Title II beneficiaries and Title XVI recipients.
[6] The Social
Security Act, §§ 205(j) and 1631(a)(2), 42 U.S.C. §§ 405(j) and 1383(a)(2);
see also, 20 C.F.R. Parts 404, Subpart
U, and 416, Subpart F.
[7] SSA, Program Operations Manual System (POMS), SI
00510.001.B.4.
[8] SSA, POMS, SI 00510.005.B.1.
[9] SSA, POMS, GN 00502.183.B.4.
[10] SSA OIG, Concurrent
Title II and Title XVI Beneficiaries Receiving Representative Payee and Direct
Payments (A-09-05-15144), April 2006.
[11] The MBR is an electronic file of all Title II
beneficiaries. The SSR is an electronic
file of all Title XVI recipients.
[13] SSA, POMS, GN 00502.005.A and GN 00502.070.A.
[14] For 30 of our 200 sample cases, the MBR and SSR
contained some conflicting representative payee information. However, our review found that the
information was corrected by SSA in a timely manner or did not result in a
conflicting payment method.
[15] Omnibus Budget
Reconciliation Act of 1990, Public Law 101-508 § 5105;
see also the Social Security Act §§ 205(j)(2) and 1631(a)(2)(B), 42 U.S.C. §§ 405(j)(2) and
1383(a)(2)(B).
[16] SSA, POMS, GN 00502.110 B.2.
[17] SSA, POMS, GN 00502.183.B.4.
[18] SSA, POMS, GN 00605.001 A. and B.1.
[19] SSA, POMS, GN 00605.001 A.
[20] Generally, Title XVI recipients cannot have over
$2,000 in resources; a married beneficiary is limited to $3,000. Recipients who exceed the resource limit are
not eligible for Title XVI. POMS, SI
01110.003, A.