Our objective for this review was to determine
whether the Social Security Administration (SSA) had adequate procedures
for matching Federal, State, county, and local prisoner data to
SSA`s records and suspending payments to prisoners identified.
We also assessed whether SSA was effective in collecting overpayments
from prisoners.
BACKGROUND
The Social Security Act (The Act) prohibits
the payment of benefits to prisoners under the Retirement, Survivors,
and Disability Insurance (RSDI) and the Supplemental Security Income
(SSI) programs. This prohibition applies to individuals receiving
RSDI benefits who are convicted of an offense punishable by imprisonment
for more than 1 year and confined in a penal institution, and to
individuals who are receiving SSI payments and confined in a public
institution throughout any month.
Our previous audit entitled, "Effectiveness
in Obtaining Records to Identify Prisoners" dated May 10,
1996, reported that prisoners were receiving RSDI and SSI program
benefits. Our recommendations were intended to improve the timeliness
of prisoner information. Also, improvements could be achieved by
exempting prisoner agreements from the Computer Matching and Privacy
Protection Act of 1988 and by searching other sources to obtain
timely prisoner data. Most of our recommendations were included
in the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996, Public Law (P.L.) 104-193, which was signed on
August 22, 1996.
To perform our review, we sampled prisoner records
submitted to SSA and alerts that were produced when prisoner records
matched SSA`s records. We also reviewed SSA`s collection
efforts for RSDI and SSI prisoner overpayment cases.
RESULTS OF REVIEW
Our previous audit focused on SSA`s effectiveness
in obtaining prisoner information from Federal, State, and local
correctional agencies on a timely basis in order to identify incarcerated
beneficiaries and recipients. The current audit focused on SSA`s
effectiveness in matching the prisoner information received with
SSA`s payment records and suspending payments where appropriate.
We found that payments to prisoners were not always detected nor
stopped because of control weaknesses in SSA`s prisoner record
matching procedures and in SSA`s processing of prisoner alerts.
In addition, SSA has had limited success in attempting to recover
overpayments made to prisoners.
Matching Prisoner Records
SSA`s procedures for matching prisoner data
to its records do not provide reasonable assurance that prisoners
who receive benefits are identified. We found that:
SSA`s Comments
In the Acting Commissioner`s letter transmitting SSA`s
comments to the recommendations contained in our draft report,
the Acting Commissioner expressed disappointment with the report
and noted that he expected the report to reflect the remarkable
improvements in the prisoner suspension process at SSA. He also
noted that the data used to make recommendations was outdated and
that we did not reference the changes SSA has implemented since
1993 and 1994. Also, the Acting Commissioner shared his confidence
that SSA is on top of the prisoner suspension problem and has implemented
almost all of the recommendations made in the report. Further,
the Acting Commissioner urged the OIG to reconsider issuing the
report in final or asked that we review the process from SSA`s
perspective today. In addition to the comments summarized above,
SSA provided an appendix containing specific comments addressing
each of our 12 recommendations.
The following comments were made in response to our specific
recommendations on making matching procedures for identifying prisoners
receiving benefits more effective:
SSA implemented a new system on March 8, 1997 to process
prisoner data which will produce alerts in cases where payments
are currently suspended but could potentially be resumed
and paid retroactively for a period of incarceration;
SSA modified the match to prevent duplicate tape processing
and unnecessary alerts;
SSA encouraged sources to report electronically and
has required that sources report electronically within 12
months of executing incentive payment agreements; and
SSA is studying ways to improve the EVS system in
order to find ways to enhance prisoner matches and ways to
make the SSN verification process more effective.
The following comments were made in response to our recommendations
on making procedures for processing alerts of prisoners receiving
benefits more effective:
with the implementation of the Prisoner Update Processing
System (PUPS) in March 1997, alerts are sent to follow up
on pending prisoner match alert cases;
with the implementation of PUPS, alerts will be sent
to the regional office for investigation if the case is still
pending after 120 days;
with the implementation of PUPS, SSA will ensure that
all prisoner alerts are processed in a timely manner; and
as of March 1997, alerts are transmitted to FOs electronically.
The following comments were made in response to our recommendations
making procedures for collecting overpayments from prisoners more
effective:
SSA is developing data elements on the SSR that will
enable better identification and monitoring of SSI prisoner
overpayments;
SSA is assessing its policies and procedures regarding
collection efforts for prisoner overpayments;
SSA is in the process of expanding the use of the
tax refund offset to SSI delinquent debts for recipients
whose benefits have been terminated; and
SSA will exercise its full statutory authority to
recover overpayments where it is cost-effective to do so.
We disagree with the Acting Commissioner`s characterization
of the report and his conclusions and feel it necessary to address
the issues he raises. The full text of our reply to the Acting
Commissioner`s transmittal memorandum is contained in Appendix
H.
With regard to pursuit of overpayments, SSA commented that
it does not have the authority to use tax refund offset to recover
debt from suspended beneficiaries, that it is limited by statute
to a recovery rate of 10 percent of the SSI payment and that SSA
has no authority to collect SSI overpayments from RSDI benefits
without the voluntary consent of the individual. In response to
SSA`s comment, we recommend that SSA seek a legislative change
to allow more aggressive pursuit of overpayments if the current
legislation does not allow SSA to perform all collection activities
deemed effective.
To determine the effect of delays in processing prisoner
records, we reviewed 2 separate samples from prisoner information
received by the Social Security Administration (SSA) from 35 State
correctional departments. To determine whether individuals identified
in the information submitted by prisons were SSA beneficiaries,
we traced the sampled prisoner records through SSA`s electronic
matching program. For each of our sampled cases, we determined
whether the individual was receiving Retirement, Survivors and
Disability Insurance and/or Supplemental Security Income payments
during their period of incarceration.
From prisoner information submitted by State correctional
departments, we obtained access to 85 magnetic tapes containing
303,976 records submitted to SSA from July 1993 to February 1994.
The 85 tapes contain records submitted by 33 different States.
Information for two States (Montana and Oregon) was received by
SSA during our audit period but not archived in time to be included
in our sample.
We selected for review 12 of the 85 tapes using the Rao-Hartley-Cochran
sampling method that uses approximate probability proportional
to size selection techniques. We used the number of records on
each of the 85 tapes as the size factor. In other words, a tape
with more records had a greater chance of being selected than a
tape with fewer records.
From each of the 12 tapes, we used simple random sampling
to select 100, 125, 150 or 200 prisoner records. Prior to
selecting our sample of prisoner records from the 12 tapes, we
analyzed the tapes to remove multiple records for the same Social
Security number. Our sample size was 1,525 from a possible 137,658
records contained on the 12 tapes.
Of the 1,525 prisoners` records selected, 91 were
receiving benefits after their period of incarceration began. Our
review of each case consisted of obtaining the Master Beneficiary
Record and the Supplemental Security Record and comparing it to
the prisoner information to determine whether SSA had identified
that the beneficiary or recipient had been overpaid because he
was a prisoner. We traced sample prisoner records through the prisoner
matching process, from receipt to payment suspension. We identified
control weaknesses and, using sample cases, tested their effect
on the results of the computer match. Case folders were reviewed
and field offices contacted to reconstruct how SSA learned of incarceration
in each sample case.
To determine how many prisoners continued to receive Retirement,
Survivors and Disability Insurance (RSDI) and/or Supplemental Security
Income (SSI) benefits during the period that paper correctional
agency records awaited processing, we used simple random sampling
to select 200 of 6,646 prisoner records received between February
2 and November 21, 1995. Before eliminating duplicate records,
there were 10,869 records. To determine whether the delay in processing
the paper records resulted in additional overpayments, we reviewed
each of the sample cases to determine whether any of the prisoners
received RSDI and/or SSI benefits between February 1994 and
February 1995.
Based on our review, seven of the prisoners were paid RSDI
and/or SSI benefits during the period in which the Social Security
Administration delayed processing the records. Projecting our results
to the population of prisoner records submitted on paper and not
processed immediately, we estimate that 233 prisoners continued
to receive a total of approximately $558,000 in benefit payments
while the paper records waited to be processed. At the 90 percent
confidence level, the precision of this estimate is plus or minus
73.77 percent.
We obtained 5,341 Retirement, Survivors and Disability Insurance
(RSDI) prisoner alerts generated during the 6-month period of July
1 through December 31, 1994 from the Southeast Program Service
Center in Birmingham (PSC 3) and the Office of Disability and International
Operations Program Service Center in Baltimore (PSC 7). To determine
whether the Social Security Administration (SSA) had adequate procedures
to suspend RSDI benefit payments, we used simple random sampling
to select 150 of the 5,341 RSDI prisoner alerts. Also, from SSA`s
central office, we obtained 13,950 Supplemental Security Income
(SSI) prisoner alerts generated during the 6-month period of July
1 through December 31, 1994. To determine whether SSA had adequate
procedures to suspend SSI benefit payments, we used simple random
sampling to select 150 of the 13,950 SSI prisoner alerts. For each
sampled case, we obtained and reviewed case folders, prison confirmations,
Master Beneficiary Records, and Supplemental Security Records.
Based on this sampling methodology, it was possible that
more than one alert could be included in our population for the
same beneficiary. To account for this in our sample, we did not
include a beneficiary in our overpayment calculation and projection
more than once. For example, two beneficiaries were randomly selected
twice in our sample of 150 RSDI alerts. The first time we
reviewed an alert for a beneficiary, we treated the alert as any
sample item and calculated the related overpayment. However, the
second time the same beneficiary was selected, we treated the case
as if it were properly handled by SSA and did not calculate an
overpayment.
For each case, we determined whether RSDI and/or SSI benefits
should have been suspended. In this regard, we confirmed with the
correctional facility the identity of the beneficiary as well as
the dates of incarceration and whether the conviction was for a
felony. To confirm the identity of the beneficiary, we requested
that the correctional facility confirm the name, date of birth,
and Social Security number of the prisoner against those of the
beneficiary. In cases where we could not confirm the identity of
the beneficiary as that of the prisoner, we did not calculate an
overpayment.
Next, we reviewed the dates of incarceration. For cases where
the identity of the prisoner was confirmed, we determined the length
of incarceration. At the time of our review, RSDI benefits were
to be suspended for a month any part of which the beneficiary was
confined and convicted of a felony. Consequently, we only calculated
overpayments for months in which the prisoner was confined for
at least 1 day for a felony conviction.
Under SSI provisions, benefits are to be suspended for any
month throughout which the recipient resides in a public institution.
Hence, we only calculated overpayments for months in which the
prisoner was confined for every day in that month. For example,
if the recipient was incarcerated July 15 through August 15, 1994,
benefits would be payable for the period of incarceration under
the Social Security Act since the recipient was not confined for
all of either month. In such a case, we did not calculate an overpayment.
In completing our review of cases and calculating the related
overpayments, we calculated the overpayment from the date on which
the alert was created. In this regard, we only included payments
which were made more than 30 days after the alert was created.
For example, if a beneficiary was incarcerated from January 1994
through January 1995, but the alert was created on August 15, 1994,
we did not calculate the overpayment from January (the date of
incarceration). Instead, we calculated the overpayment including
any payments made after September 15, 1994 (30 days after alert
issuance). Our overpayment period ended when one of the following
events occurred: (1) the prisoner was released; (2) SSA terminated
benefits for any reason; or (3) our audit started. In cases where
the prisoner was released before the alert was created, we did
not calculate an overpayment. For RSDI alerts, our overpayment
period ended May 31, 1995, which was the start of our RSDI sample
review. For SSI alerts, our overpayment period ended April 30,
1995, which was the start of our SSI sample review.
RSDI Cases
Overpaid
RSDI
Overpayments
SSI Cases
Overpaid
SSI
Overpayments
Not
Processed
32
$ 96,488
16
$ 29,539
Processed Untimely
45
$ 64,967
15
$ 11,052
TOTAL
77
$ 161,455
31
$ 40,591
Based on the above, 77 of the 150 RSDI cases involved $161,455
in overpayments because alerts were not processed or were not processed
in a timely manner. Projecting the results of the sample to the
population, we estimate that $5.7 million of improper payments
could have been prevented if the alerts printed during the 6-month
period ending December 1994 had been processed timely. At the 90
percent confidence level, the precision of this estimate is plus
or minus 19.54 percent.
For the SSI cases, 31 of the 150 cases involved $40,591 in
overpayments because alerts were not processed or were not processed
in a timely manner. Projecting the results of the sample to the
population, we estimate that $3.8 million of improper payments
could have been prevented if the alerts printed during the 6-month
period ending December 1994 had been processed in a timely
manner. At the 90 percent confidence level, the precision of this
estimate is plus or minus 35.40 percent.
With regard to the 73 RSDI cases and 119 SSI cases which
did not result in overpayments, we found the following:
Reason the Sample Item
Was Not
Considered to be an Overpayment
RSDI Cases
SSI Cases
Suspense Period Ended Before Alert Created
25
22
Beneficiary Not Incarcerated an Entire
Month
--
48
Beneficiary Not Convicted of a Felony
13
--
Benefits Suspended Within 30 Days of
Alert Issuance
11
26
Beneficiary Identification Not Confirmed
11
2
Prisoner Not Paid During Incarceration
5
16
Overpayment Recovered Prior to Review
4
0
Benefits Suspended for Other Reason
0
4
Alert in Sample Twice
2
1
Family Maximum Offset of Overpayment
2
--
Total
73
119
To ensure that our overpayment calculations and projection
were as accurate as possible, we considered the family maximum
in each RSDI case, in relation to the amount of the overpayment.
In this regard, in cases where the prisoner was receiving benefits
as an auxiliary beneficiary, we determined whether the family maximum
was in effect at the time of incarceration. In two cases, the overpayment
made to the prisoner was completely offset by an underpayment made
to other auxiliary beneficiaries on the same record. In these two
cases, we did not calculate overpayments since the total payment
to the families would have remained the same even if SSA had suspended
payments to the prisoners.
For 25 RSDI cases and 22 SSI cases, we did not calculate
an overpayment for our review even though an overpayment had been
paid to the prisoner. In these cases, the prisoner alert was created
after the prisoner`s incarceration period ended. In such cases,
we did not calculate an overpayment since our review only included
the handling of the alerts created and overpayments were only calculated
for the period subsequent to the alert issuance. However, these
beneficiaries were incarcerated for a period of time during which
they received benefits. These cases need to be resolved by SSA
and the respective benefit hich they received benefits. overpayments
collected even were not considered overpayments during the period
covered by our though they review.
To determine the procedures the Social Security Administration`s
field offices (FO) follow to identify incarcerated Retirement,
Survivors and Disability Insurance (RSDI) and Supplemental Security
Income beneficiaries, we conducted a survey of 70 FOs who had processed
cases sampled in our review. The questions asked of each FO are
as follows:
1. Do you have formal or informal agreements with local
or county correctional or mental health facilities to receive
information on prisoners or inmates? If so, are you in
the process of renewing or extending the agreements?
2. Do you receive information on prisoners or other inmates
from any correctional or mental health facilities?
3. Do your agreements with local or county correctional
or mental health facilities take into account recent changes
brought about by the passage of Public Law 103-387?
4. Have you received and read a March 1995 release of
Program Operations Manual System DI E11505.001-006C,
which provides new procedures for collecting and processing prisoner
information?
Have you prepared a plan that will implement the
new procedures?
Have you attempted to amend your agreements to
integrate the new procedures?
Have you attempted to inventory correctional and
mental health facilities in your service area?
If you have inventoried correctional and mental
health facilities in your service area, have you reported
the inventory results to your Regional Office?
5.For information that you receive from local
and county correctional or mental health facilities:
How is it controlled when received in the office?
How is it distributed to be processed?
How is it tracked and followed up on?
Is it tracked and followed up on after a suspension
request is made?
Do you report on the results of that work?
What is the final disposition of the files or
listings that you receive?
Do you have documentation showing the effectiveness
of the match (e.g., number of suspensions per prisoner
records received)?
6. When title XVI prisoner alerts are received:
How are they controlled when received in the office?
How are they distributed to be worked?
How are they tracked and followed up on?
Are they worked on a priority basis or after other
postentitlement work?
How long do you keep alerts and related documentation?
7. Are you able to determine when you receive program
service center (PSC) action requests whether they were
initiated by the PSC`s receipt of an RSDI prisoner alert?
8. How are action requests stemming from RSDI prisoner
alerts controlled, distributed, tracked, followed up on,
and accounted for?
9. Do prisoner alert-related PSC action requests receive
a different processing priority than other PSC action requests?
Supplemental Security Income Overpayment Sampling Methodology
To estimate the amount of Supplemental Security Income overpayments
made to prisoners in Calendar Year (CY) 1994, we requested a data
extract from the Supplemental Security Record (SSR) of all beneficiaries
with overpayments who were suspended for "N02" status.
This status includes all prisoner suspensions, but is also used
for other suspension reasons as well. Our extract identified 31,499
overpayments which were "N02" suspensions during a period
for which an overpayment occurred. These overpayments were all
identified by the Social Security Administration (SSA) during CY 1994
and totaled $48.3 million.
To estimate the amount of the overpayments made to prisoners,
we randomly selected 100 of the 31,499 overpayments and determined
whether they were prisoners or whether their payments were suspended
for another reason. The 100 sample cases had total overpayments
of $166,673. Based on our review, 64 of the overpayments were made
to prisoners and the amount overpaid to those 64 prisoners
was $130,219 (78 percent). Projecting the results of our sample
to the population of 31,499 overpayments valued at $48.3 million,
we estimate that during CY 1994, SSA identified and initiated collection
activities on $37.7 million overpaid to prisoners. At the 90 percent
confidence level, the precision of this estimate is plus or minus
11.71 percent.
To determine whether each of the 100 sample cases were suspended
due to incarceration, we reviewed SSRs and/or Master Beneficiary
Records of the beneficiaries and contacted field offices when reviews
of the automated files were inconclusive. The 36 beneficiaries
who were not prisoners were mostly suspended due to residency in
another type of institution, such as a nursing home.
From our statistical samples of 150 Retirement, Survivors
and Disability Insurance (RSDI) and 150 Supplemental Security Income
(SSI) beneficiaries discussed in Appendix C, we identified 64 RSDI
cases and 47 SSI cases where the Social Security Administration
(SSA) had identified overpayments and initiated collection activities
prior to the start of our review.
For each case, we determined the outstanding overpayment
amount as of March 1996 and its collection status. To confirm the
collection status, we contacted program service centers and reviewed
RSDI case folders and contacted field offices responsible for the
47 SSI cases. Overall, SSA had collected $48,720 (16 percent)
of the RSDI overpayments and $15,137 (11 percent) of the SSI overpayments
as of March 1996. Specifically, we found:
RSDI Overpayment Sample Cases
Collection
Status
Number of
Cases
Overpayment
Amount
Amount Collected
Percent
Collected
Full Collection
9
$ 13,780
$13,780
100%
Partial Collection
33
$153,527
$34,940
23%
No Collection
22
$134,357
$ 0
0%
Total
64
$301,664
$48,720
16%
Of the 64 RSDI overpayments, 9 had been fully collected,
33 had been partially collected, and, for the remaining 22, SSA
had not collected any of the prisoner overpayment amount. Projecting
the results of our review to the population of 5,341 prisoner alerts
issued during July through December 1994, we estimate that of the
$10.7 million overpaid to these prisoners, $8.9 million remained
uncollected as of March 31, 1996. At the 90 percent confidence
level, the precision of this estimate is plus or minus 31.59 percent.
SSI Overpayment Sample Cases
Collection
Status
Number of
Cases
Overpayment
Amount
Amount
Projected
Percent
Collected
Full Collection
5
$ 4,753
$ 4,753
100%
Partial Collection
13
$49,818
$10,384
21%
No Collection
29
$83,887
$ 0
0%
Total
47
$138,458
$15,137
11%
Of the 47 SSI overpayments, 5 had been fully collected, 13
had been partially collected, and, for the remaining 29, SSA had
not collected any of the prisoner overpayment amount. Projecting
the results of our review to the population of 13,950 SSI prisoner
alerts issued during July through December 1994, we estimate that
of the $12.9 million overpaid to these prisoners, $11.5 million
remained uncollected as of March 31, 1996. At the 90 percent confidence
level, the precision of this estimate is plus or minus 30.93 percent.
Office of the Inspector General’s (OIG) Response
to
Acting Commissioner’s Comments to OIG Draft Report,
"Effectiveness of the Social Security Administration`s
Procedures to Process Prisoner Information,
Suspend Payments, and Collect Overpayments"
In your transmittal memo containing the comments to our recommendations,
you express disappointment with the report. On the basis of your
concerns, you urge that we reconsider issuing the report in final
or ask that we review the results from the perspective of the Agency
today. We disagree with your characterization of the report and
your conclusions.
The report does not reflect the remarkable improvements
SSA has made in the Prisoner Suspension Process.
The actions taken by the Social Security Administration (SSA)
cited in your memo may indeed be noteworthy but they were taken
in response to an earlier audit. In May 1996, we issued a report
entitled "SSA`s Effectiveness in Obtaining Records to
Identify Prisoners." In that report, we discussed SSA`s
process for obtaining information on prisoners receiving SSA benefits
and payments. The list of corrective measures cited in your memo
were prompted by the recommendations made in that report. The current
audit did not examine the adequacy of these corrective actions.
Consequently, we do not know if these actions are working nor are
we able to comment on them. We plan to undertake a follow-up audit
to assess those corrective actions taken in response to our earlier
audit and will comment on the success of SSA`s efforts then.
The results of the audit rely on old data from 1993
and 1994.
Your memo indicated that our audit found problems that existed
in 1993-1994. Actually, our audit identified problems that have
continually existed since 1993-1994. We found it useful to track
these same long-standing issues from SSA’s failure to identify
the prisoners to our second audit that found that once identified,
SSA did not promptly act to suspend the unauthorized payments.
SSA is just now taking actions intended to correct these long-standing
deficiencies. There is no dispute on this issue. SSA’s prompt
corrective actions to implement our recommendations testify to
the reliability and relevance of the data we examined.
Your letter has identified a related problem, however. SSA
frequently does not respond to OIG information requests in a timely
manner. For example, for this audit, it took SSA over 4 months
to provide us with the requested data. This is a very common problem
that needs to be addressed. Under separate cover, we will identify
the problem in greater detail and would appreciate your action
to support our audit efforts.
Your memo does not clearly convey that the corrective
actions taken were in response to our audit. You indicate that,
over the past 2 years, SSA has worked to correct this problem
and has implemented almost all of the OIG’s report recommendations.
This audit examined deficiencies in SSA’s policies and
practices for taking payment suspension action upon learning that
prisoners were receiving benefits. You point out that SSA has taken
action in response to these problems. Your letter would lead an
independent reader to believe that SSA took corrective action on
payment suspensions divorced from our audit recommendations. That
is not the case.
We had originally planned to do a series of audits on this
problem. At the request of the former Commissioner, we did a single,
comprehensive audit. So that the problems could be dealt with in
a timely fashion, we briefed SSA after each problem was identified.
We encouraged SSA to take action before the conclusion of our work,
which it agreed to do. We did not expect that this professional
courtesy would cause you to suggest that we not issue our report.
We intend to issue the report and will identify corrective actions
that you have agreed to take. We will also revisit this area in
the next audit cycle to ensure that the actions taken are effective.
In the conclusion of your memo, you characterize SSA as very
much on top of the issue of processing prisoner information. We
take exception to your assessment. Our report clearly describes
several areas where SSA needs to improve its prisoner information
management and responsiveness. We believe the report is clear on
these matters. That $20 million of taxpayer monies was improperly
paid to incarcerated individuals and, to date, remains uncollected,
illustrates our continuing concerns.
SSA is committed to addressing the problem of unauthorized
payments to prisoners. We acknowledge your efforts in this area
and look forward to continuing to work together to overcome it.
All the same, we recognize that more work is needed before this
problem is under control.
Gary Kramer, Director, Program Audits
Scott Patterson, Director, Evaluations and Technical Services
Roger Normand, Director, Program Audits
Rona Rustigian, Deputy Director, Program Audits
Pat Kennedy, Auditor
David Mazzola, Auditor
Jodi Connor, Auditor
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