Office of the Inspector General

Larry G. Massanari

Acting Commissioner of Social Security

Inspector General

Management Advisory Report: Evaluation of the Efficiency of Using Forms
SSA-1587 and SSA-1588 to Detect Unreported Marriages (A-13-01-31002)

The attached final Management Advisory Report describes the methodology and cost-benefit analysis used during our evaluation of the efficiency of using Forms SSA-1587 and SSA-1588 to detect unreported marriages for dependent children ages 15 to 17. On January 19, 2001, we issued an Early Alert memorandum, Use of Forms SSA-1587 and SSA-1588 to Detect Unreported Marriages for Dependents Aged 15 to 17 (A-13-01-31025), to the Social Security Administration (SSA) management recommending that it not renew its contract to mail Forms SSA-1587 and SSA-1588 as a way of detecting these marriages. In response, SSA stated it would perform additional analysis before making a final decision about contract renewal.

This report does not require any recommendation tracking. Its purpose is to share technical methodology and cost-savings analysis with SSA as it performs further work in the subject area. 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.

Attachment

cc:
OA Read File
Report File
OIG/OA/TODD/dg/09/19/2001
File Code: FOR 01-31002

Office of the Inspector General

Larry G. Massanari
Acting Commissioner of Social Security

Inspector General

Management Advisory Report: Evaluation of the Efficiency of Using Forms SSA-1587 and SSA-1588 to Detect Unreported Marriages (A-13-01-31002)

OBJECTIVE

This Management Advisory Report describes the methodology and analysis used during our evaluation of the efficiency of using Forms SSA-1587 and SSA-1588, Beneficiary Recontact Report, to detect unreported marriages for dependent children aged 15 to 17.

In 1993, the Social Security Administration (SSA) implemented the Beneficiary Recontact Program (BRP) to detect unreported marriages. At that time, SSA used Form SSA-1588 to collect this information from dependent children aged 15 to 17 who received Old-Age, Survivor, and Disability Insurance (OASDI) benefits. Dependent children are required to self-report marriage, which is a terminating event for receiving OASDI benefits. In September 1996, SSA began sending a separate form, Form
SSA-1587, to dependent children’s representative payee to inquire about the child’s marital status.

SSA uses an independent contractor to print, handle, and mail one initial mailing of the Forms and one follow-up mailing. The contract is for a 1- year period, renewable each March.

The scope and methodology used for this evaluation are discussed in Appendix A.

Specifically, during CYs 1999 and 2000, only 26 beneficiaries aged 15 to 17 had their benefits terminated for non-response, and 10 had their benefits terminated for marriage, a decline from previous years (see Appendix A, Table 2). When asked, SSA was unable to explain this dramatic decrease.

Using these results and BRP cost information, we performed a cost-benefit analysis to determine the feasibility of renewing the BRP contract to mail Forms SSA-1587 and SSA-1588 to detect unreported marriages for dependents aged 15 to 17 (see Appendix A). Based on our analysis, we believe the BRP’s use of the Forms to detect these marriages is no longer cost-beneficial.

On January 19, 2001, we issued an Early Alert memorandum, Use of Forms SSA-1587 and SSA-1588 to Detect Unreported Marriages for Dependents Aged 15 to 17
(A-13-01-31025), recommending that SSA not renew the BRP contract (see Appendix B). In response, the Office of Program Benefits stated that "due to various factors, including changes in processing the returned forms in the Agency’s Wilkes-Barre Data Processing Center, additional work needed to be done to further determine whether or not the BRP contract should be continued, modified or discontinued." SSA also stated that the Office of Quality Assurance and Performance Assessment would perform the additional analysis during the BRP contract period, June 2001 through May 2002.

As a result of SSA’s response to our Early Alert memorandum, we discontinued our evaluation efforts to avoid duplicative work in the subject area. However, for the Agency’s use during its additional analysis, we are sharing the technical details of our work. Appendix A describes the technical steps we took to determine the feasibility of renewing the BRP contract to mail Forms SSA-1587 and SSA-1588.

James G. Huse, Jr.

Appendices

Appendix A – Cost-Benefit Analysis

Appendix B – EARLY ALERT: Use of Forms SSA-1587 and SSA-1588 to Detect

Unreported Marriages for Dependents Aged 15 to 17 (A-13-01-31025)

Appendix C – Memorandum Regarding Additional Evaluation of the Beneficiary

Recontact Program for Children Aged 15-17

Appendix D – OIG Contacts and Staff Acknowledgements

Cost-Benefit Analysis

SSA provided a data extract from the Master Beneficiary Record (MBR) for beneficiaries who had benefits terminated as a result of the BRP (coded "T"), married (coded "M"), or reinstated (coded "X") and whose dates of birth were between December 31, 1978 and January 1, 1985. The data extract also included beneficiaries’ names and Social Security numbers . SSA provided a data extract containing 18,887 records that met these criteria. The records covered the period January 1, 1994 through September 26, 2000.

Of the 18,887 records, we identified 5,732 beneficiaries whose Old-Age, Survivor, and Disability Insurance (OASDI) benefits were terminated as a result of the BRP. Of these, 1,150 beneficiaries who returned Forms SSA-1587 and SSA-1588 self-reported they were married. An additional 4,582 beneficiaries’ benefits were automatically terminated because they neither responded to the mailings nor challenged the termination.

From the 5,732 records, we took a probe sample of 50 randomly selected Social Security numbers. After reviewing the 50 records, we expanded our probe sample to 380 MBR files, yielding a 15-percent precision level. We reviewed each record to determine the (1) amount of payment at termination, (2) beneficiary’s date of birth, (3) family maximum benefit usage, (4) amount of any overpayment, (5) overpayment balance, and (6) date of termination.

To determine the expected date of termination due to age (DoTA), we subtracted the date of birth (DoB) from the beneficiary’s date of attainment of age 18 (DoAoA18).

To ascertain the potential months of overpayment (PMoOP), we subtracted the date of termination for marriage (DoTM) from the expected date of termination due to age (DoTA).

Since SSA establishes a maximum amount of benefit dollars for each family, we determined the amount of each family member’s benefit amount after redistribution of benefits among other family members. To determine the potential amount of overpayment (PAoOP), we multiplied the potential months of overpayment (PMoOP) by the amount of remaining benefit dollars after re-distribution (RDB).

We also determined the amount of overpayment and related amount recovered by SSA created by an unreported marriage of the child beneficiary. We used the sample of 380 divided by the universe (5,732) to project the BRP’s potential savings applicable to the OASDI trust fund.

As shown in Table 1, BRP costs exceeded $4 million from July 1996 through September 2000.

Table 2 identifies benefit terminations for non-responders and reported marriages as well as reinstatements by CY from the inception of the BRP in 1993 through September 26, 2000. During CYs 1999 and 2000, the number of benefit terminations for non-responders (26 in Column A) and unreported marriages (10 in Column B) precipitously declined from prior years, while reinstatements (6,248 in Column E) increased.

Table 2. Benefit Terminations Due to the BRP from January 1, 1994 through September 26, 2000

We project SSA could have saved over $4.6 million, if it had not renewed the contract for June 2001 through May 2002, assuming the BRP correctly detected married dependent children who were aged 15 to 17. This projection was based on the assumption that all cases in Column A were correct terminations. We added Column A + Column B to get the total population of correctly terminated cases (N = 5,732). Next, we randomly sampled 380 cases out of 5,732. For the sample, there were $310,675 in benefit payments, which SSA could have recovered, if the termination had been done timely. To project to the universe, we divided the $310,675 by a projection factor of .06629449 (380/5732), yielding a figure of over $4.6 million.

Additionally, from our sample, we identified $68,067 in overpayments, which projected to $1,026,737 in overpayments between July 1996 and September 2000. Of this projected total, we estimated that SSA had only recovered 36.2 percent ($371,841), leaving 63.8 percent ($654,896) still outstanding.

EARLY ALERT: Use of Forms SSA-1587 and SSA-1588 to Detect Unreported Marriages for Dependents Aged15 to 17(A-13-01-31025)

Agency’s Memorandum Regarding Additional Evaluation of the Beneficiary Recontact Program for Children Aged 15 to17

Appendix D

OIG Contacts and Staff Acknowledgements

Shirley E. Todd, Director, General Management Audit Division (410) 966-9365
Carolyn Neuwirth, Deputy Director, (410) 966-1404

Steve Weal, Auditor-in-Charge
Thomas P. Tennant, Senior Auditor
Kimberly Beauchamp, Writer-Editor
N. Brennan Kraje, Jr., Statistician