Acronyms
The following acronyms will be used throughout our Annual Work Plan.
FY Fiscal Year
OIG Office of the Inspector General
SSA Social Security Administration
SSN Social Security Number
Executive Overview
OFFICE OF THE INSPECTOR GENERAL MISSION
We improve SSA’s 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 OFFICE OF AUDIT
We conduct comprehensive audits and evaluations of SSA’s programs and
operations. Our audits determine whether the objectives of SSA’s programs
are being achieved and identify which programs or activities need to be performed
more efficiently. In FY 2003, we issued 97 reports containing recommendations
with about $417 million in Federal funds to be put to better use and about $57
million in questioned costs.
ANNUAL WORK PLAN
Our Annual Work Plan (Plan) outlines our perspective of the top management challenges
facing SSA and serves as a tool for communicating our priorities to SSA, the
Congress, the Office of Management and Budget (OMB), and other interested parties.
The activities described address the fundamental goals related to SSA’s
mission to administer the Social Security programs and operations effectively
and efficiently. Our work is prioritized to focus our resources on those areas
that are most vulnerable to fraud, waste and abuse. To ensure the OIG provides
a coordinated effort, we work closely with the Offices of Investigations, Counsel
to the Inspector General, and Executive Operations.
Our Plan is categorized to mirror the top management challenges that cut across
the Government, as outlined in the President’s Management Agenda (PMA)
and rated by OMB’s Scorecard.
The PMA was designed to coordinate agency efforts to “address the most
apparent deficiencies and focus resources where the opportunity to improve performance
is the greatest.” The PMA’s goal is to establish a more responsible
and responsive Government that is citizen-centered, results-oriented, and market-based.
In addition to the PMA, OMB provides each Federal agency with a scorecard rating
their performance. The scorecard is designed around a simple grading system:
green for success, yellow for mixed results, and red for unsatisfactory. Below
is the status of SSA’s efforts, as reported by OMB’s June 2003 Scorecard.
Although the challenges
facing SSA management in FY 2004 have not changed substantially from last year,
we have recategorized or renamed some issue areas.
• The areas formerly titled Homeland Security, Social Security Number
Integrity and Misuse and Integrity of the Earnings Reporting Process have been
combined under one area titled Social Security Number Integrity and Protection.
• The Human Capital, E-Government, and Representative Payee issue areas
previously included as separate challenges are now combined under the Service
Delivery issue area.
• The Fraud Risk issue area has been removed, and we have noted in each
write-up that there are certain elements of fraud risk in each management challenge.
This Plan describes 101 reviews we intend to complete and 71 reviews we intend
to begin in FY 2004 in the following issue areas.
• Social Security Number Integrity and Protection
• Management of the Disability Process
• Improper Payments
• Budget and Performance Integration
• Critical Infrastructure Protection and Systems Security
• Service Delivery
The following table demonstrates that our perspective is congruent with other
key decisionmakers.
To assist us in this analysis, we crosswalked the PMA, Commissioner Priorities,
Social Security Advisory Board, and General Accounting Office (GAO) high-risk
areas to those identified by our prior and ongoing work.
In preparing this Plan, we solicited suggestions from the Agency. We received
a number of suggestions for inclusion in our Plan, and we have incorporated
as many of them as possible.
We recognize this Plan is dynamic, so we encourage continuous feedback and additional
suggestions. This flexibility enables us to meet emerging and critical issues
evolving throughout the upcoming year.
For more information on this Plan, please contact the Office of Audit at (410)
965-9700.
Social Security Number Integrity and Protection
In FY 2003, SSA issued about 17 million original and replacement SSN cards,
and SSA received approximately $541 billion in employment taxes related to earnings
under issued SSNs.
In FY 2003, SSA issued about 17 million original and replacement SSN cards,
and SSA received approximately $541 billion in employment taxes related to earnings
under issued SSNs. Protecting the SSN and properly posting the wages reported
under SSNs are critical to ensuring eligible individuals receive the full retirement,
survivor and/or disability benefits due them.
The SSN is the single most widely used identifier for Federal and State governments
and the private sector. It has become the de facto national identifier. Given
its importance, the possession of an SSN may allow criminals to steal identities
and commit other criminal acts. In fact, the lack of protection of the SSN has
often led to identity theft and SSN misuse. Being the immediate victim of SSN
misuse and/or identity theft may cause individuals years of difficulty and cost
financial and commercial institutions a great deal of money. SSN misuse may
disguise a dangerous felon or a terrorist as a law-abiding citizen. The possession
of an SSN provides a criminal the identification and seeming legitimacy he or
she needs to go about nefarious business, perhaps putting dozens, hundreds,
or even thousands of lives in jeopardy.
Protecting the Social Security Number
To ensure the integrity of the SSN, SSA must focus on three stages of protection:
(1) when the SSN card is issued, (2) during the life of the SSN cardholder,
and (3) upon the SSN cardholder’s death. Furthermore, SSA must employ
effective front-end controls in its enumeration process. Likewise, additional
techniques, such as data mining, biometrics, and enhanced systems controls,
are critical in the fight against SSN misuse.
To effectively combat SSN misuse, we believe SSA should
• establish a reasonable threshold for the number of replacement SSN cards
an individual may obtain during a year and over a lifetime,
• expedite systems controls that would interrupt SSN assignment when SSA
mails multiple cards to common addresses or when parents claim an improbably
large number of children,
• continue to address identified weaknesses within its information security
environment to better safeguard SSNs, and
• continue to educate SSA staff about counterfeit documents.
Integrity of the Earnings Process
The integrity of the SSN is also related to SSA’s process for posting
workers’ earnings. If earnings information is reported incorrectly or
not reported at all, SSA cannot ensure all eligible individuals are receiving
the correct payment amounts. In addition, SSA’s disability programs under
the Disability Insurance (DI) and Supplemental Security Income (SSI) provisions
depend on this earnings information to determine (1) whether an individual is
eligible for benefits and (2) the amount of the disability payment.
SSA spends scarce resources trying to correct the earnings data when incorrect
information is reported.
The Earnings Suspense File (ESF) is the Agency’s record of annual wage
reports for which wage earners’ names and SSNs fail to match SSA’s
records. Between 1937 and 2000, the ESF grew to represent about $374 billion
in wages, which included approximately 236 million wage items with an invalid
name and SSN combination. As of July 2002, SSA had posted 9.6 million wage items
to the ESF for Tax Year 2000, representing about $49 billion in wages.
While SSA has limited control over factors causing the volume of erroneous wage
reports submitted each year, there are still areas where SSA can improve its
processes. Prior accomplishments may be enhanced by continuing to educate employers
on reporting criteria, identify and correct employer reporting problems, and
encourage greater use of the Agency’s SSN verification programs. SSA also
needs to improve coordination with other Federal agencies with separate, yet
related, mandates. For example, SSA’s ability to improve wage reporting
is related to the Internal Revenue Service’s sanctioning of employers
for submitting invalid wage data and the Bureau of Citizenship and Immigration
Services’ procedures used by employers to verify eligible employees.
Social Security Number Integrity
Protection Team
Finally, pending funding, we will be establishing an SSN Integrity Protection
Team (Team) to address the escalating issue of SSN misuse. The Team is an integrated
approach that combines the talents of our auditors, investigators, computer
specialists, analysts, and attorneys. In addition to supporting homeland security
initiatives, the Team will focus its efforts on
• identifying patterns and trends of SSN misuse;
• locating systemic weaknesses that contribute to SSN misuse, such as
in the enumeration and earnings-related processes;
• recommending legislative or other corrective actions to ensure the SSN’s
integrity; and
• pursuing criminal and civil enforcement provisions for individuals misusing
SSNs.
This Team will also partner with external private and public sector organizations
not only to educate, but to pursue mutually beneficial activities to prevent
and detect fraudulent use of SSNs.
In FY 2004, we plan to complete 16 reviews and begin 13 reviews in this area.
We Plan to Complete the
Following Reviews in FY 2004
Enumeration of Children Under Age 1
Florida Universities’ Issuance of “Temporary” Social Security
Numbers to Foreign Students
Follow up of the Employers with the Most Suspended Wage Items
Impact of Unauthorized Employment on Social Security Benefits
Internal Control Review of the Processing of Social Security Number Cards
Military Wage Items in the Earnings Suspense File
Reported Earnings Before the Issuance of a Social Security Number
Social Security Number Cards Issued After Death
Social Security Numbers with More than One Owner
The Social Security Administration’s Brooklyn Social Security Card
Center
The Social Security Administration’s Compliance with Policies and Procedures
for Enumerating Noncitizens
The Social Security Administration’s Compliance with Policies and Procedures
for Enumerating Noncitizens at Overseas Posts
The Social Security Administration’s Internal Use of Employee Social
Security Numbers
The Social Security Administration’s Procedures for Enumerating Foreign
Students
Title II Beneficiaries with Military Earnings
Utility of Earnings Wage Records in the Earnings Suspense File
We Plan to Begin the Following Reviews in FY 2004
Analysis of Returned Social Security Number Cards
Assessment of the Enumeration at Entry Process
Best Practices in Biometrics
Effectiveness of the SWEEP Program in Reinstating Wages
Employers with the Most Suspended Wage Items During 1997 Through 2001
Follow up of the Enumeration at Birth Program
Impact of Individual Taxpayer Identification Numbers on the Earnings Suspense
File
Improper Handling of Sensitive Documents
Individuals with more than one Social Security Number—Where one Social
Security Number was Issued Based on Fraudulent Documents
Integrity of Social Security Numbers on the Master Beneficiary Record
Social Security Administration/Bureau of Citizenship and Immigration Services
Verification Pilot
Social Security Statements’ Effect on the Earnings Suspense File and
Individual Earning Records
Use of Multiple Earnings Identification Numbers by Employers When Reporting
Earnings
ENUMERATION OF CHILDREN
UNDER AGE 1
Planned Start
Carry Over
Objective
To determine the extent to which SSA has assigned SSNs to children under age
1 based on fraudulent birth certificates.
Background
Based on prior audit work, we identified the assignment of SSNs to children
as an area prone to fraud. Despite training and guidance provided to SSA field
office (FO) personnel, the quality of many counterfeit documents is often too
professional to detect by visual inspection. Last year, SSA revised its policies
and procedures to require that FO personnel obtain independent verification
of the birth records for U.S.-born individuals age 1 and older from State or
local Bureaus of Vital Statistics before issuing an SSN card. However, SSA does
not require verification of birth certificates for children under age 1 before
SSN assignment and continues to only require a visual inspection.
Recent investigations have shown that SSA is vulnerable to individuals who present
fraudulent birth certificates when attempting to obtain an SSN card for children
under age 1. By posing as parents of newborns, individuals used counterfeit
birth certificates and baptismal certificates to obtain SSN cards at FOs and
through the mail. Applicants often presented birth certificates from States
other than the State in which they were applying for the SSNs. We believe a
contributing factor in these individuals’ success in obtaining SSNs is
that FO personnel are less familiar with the appearance of birth certificates
from States other than their own.
As part of our review, we will analyze a nation-wide statistical sample of original
SSNs assigned at FOs to children under age 1. We will verify the authenticity
of the birth certificates presented by the parents with the appropriate State
Bureau of Vital Statistics.
FLORIDA UNIVERSITIES’
ISSUANCE OF “TEMPORARY” SOCIAL SECURITY NUMBERS TO FOREIGN STUDENTS
Planned Start
Carry Over
Objective
To evaluate Florida universities’ policies and practices for issuing “temporary”
SSNs to foreign students.
Background
Thousands of foreign students enroll in educational institutions in Florida
each year. Some educational institutions enroll large numbers of foreign students
and endeavor to assimilate these students into American society as soon as possible.
To assist in this process, some universities issue “temporary” SSNs
to foreign students until they receive a permanent SSN. Students are responsible
for applying for an SSN and replacing the temporary number. University employees
stated they issue temporary SSNs for short periods so students can begin working,
open bank accounts, and obtain drivers licenses.
We do not know how widespread this practice is or how long it has been in place.
Universities may have implemented this practice in part to circumvent SSA’s
nonwork restrictions or to assist foreign students who were experiencing delays
in obtaining an SSN from SSA. Whatever the reason for this practice, universities
could potentially be violating section 205 (c)(2) of the Social Security Act,
which clearly specifies that only SSA may issue SSNs.
We will determine the extent to which Florida universities have issued temporary
SSNs, whether the universities provided guidance to foreign students regarding
the potential use of these numbers, and how foreign students are actually using
these numbers (for example, to open bank accounts, obtain drivers licenses,
or gain employment). In addition, we will determine whether the universities
can cite any source granting them the authority to issue temporary SSNs.
FOLLOW UP OF THE EMPLOYERS WITH THE MOST SUSPENDED WAGE ITEMS
Planned Start
Carry Over
Objective
To (1) assess actions SSA has taken in response to our September 1999 report,
Patterns of Reporting Errors and Irregularities by 100 Employers with the Most
Suspended Wage Items (A 03-98-31009), and (2) determine whether the wage reporting
accuracy of these earlier top 100 employers has improved.
Background
Our September 1999 report, Patterns of Reporting Errors and Irregularities by
100 Employers with the Most Suspended Wage Items (A-03-98-31009), identified
the 100 employers with the most suspended wage items in Tax Years 1993 to 1996.
The 100 employers with the most suspended Forms W-2, Wage and Tax Statement,
from 1993 through 1996 accounted for about 1.2 million suspended wage items,
5.4 percent of the 22 million suspense items during the period. Further, they
accounted for about $1.8 billion in suspended wages in 1995 and 1996, about
4 percent of the $42.9 billion in suspended wages for the period. Many of these
employers’ suspended wage items exhibited patterns of reporting errors
and irregularities that we believe warrant follow up by SSA.
Specifically, we recommended that SSA:
• Develop and implement a corrective action plan for the 100 employers
and continue efforts to contact those employers responsible for large numbers
of suspended wage items.
• Establish preventive controls to detect wage reporting errors and irregularities.
• Identify those employers who continually submit annual wage reports
with large numbers and/or percentages of unassigned, identical, and/or consecutively
numbered SSNs.
• Run address standardization software as soon as practical after employers
submit their annual wage reports to identify employers who report the same address
for many employees.
Our review will assess SSA’s implementation of the recommendations made
in the 1999 report as well as other actions related to employers with suspended
earnings. In addition, we will review the wage reporting accuracy of these earlier
top 100 employers for wages submitted during Tax Years 1997 through 2000.
IMPACT OF UNAUTHORIZED EMPLOYMENT ON SOCIAL SECURITY BENEFITS
Planned Start
Carry Over
Objective
To assess the accuracy of SSA’s Non-Work Alien (NWALIEN) file and estimate
benefit amounts resulting from unauthorized employment.
Background
Each year, SSA notifies the Department of Homeland Security’s Bureau of
Citizenship and Immigration Services (BCIS) of noncitizens who have earnings
recorded under an SSN assigned for non-work purposes. This notification is sent
to BCIS in the form of an electronic data file called the NWALIEN file.
While SSA notifies BCIS of unauthorized employment, BCIS does not notify SSA
when it changes a person’s employment status from unauthorized to authorized.
Unless the person personally informs SSA of such a change, SSA enumeration records
continue to show the individual as unauthorized for employment, and SSA will
include his or her earnings on the NWALIEN file.
To provide SSA with a more accurate estimate of legitimate non-work records
on the NWALIEN file and the amount of benefits potentially payable for unauthorized
employment, we plan to sample the NWALIEN file and verify current non-work status
with BCIS. Once employment status is known, we will use the non-work sample
cases to estimate future benefits.
INTERNAL CONTROL REVIEW OF THE PROCESSING OF SOCIAL SECURITY NUMBER CARDS
Planned Start
Carry Over
Objective
To assess the adequacy of internal controls over the processing of SSN cards
at the National Computer Center.
Background
SSN cards are issued daily. Approximately 18 million cards are issued to recipients
each year. Because SSNs are necessary to obtain employment and Social Security
benefits, the SSN card is printed with a number of security features to prevent
the card from being fraudulently duplicated.
To minimize the risk of theft or misuse of the SSN cards, strong internal controls
are needed to monitor the processing of the cards during the normal day-to-day
operations. We will review the receipt of card stock, printing of SSN cards,
and the distribution of the cards. Our review will determine whether the internal
controls in place provide reasonable assurance that SSN cards are adequately
safeguarded.
MILITARY WAGE ITEMS IN THE EARNINGS SUSPENSE FILE
Planned Start
1st Quarter FY 2004
Objective
To determine whether individuals having public responsibilities and positions
of trust, primarily active duty military employees, have wages posted to SSA’s
Earnings Suspense File (ESF).
Background
Title II of the Social Security Act requires that SSA maintain records of wage
amounts employers pay individuals. Employers report their employees’ wages
to SSA at the conclusion of each tax year. Wages on those employer reports containing
invalid names and/or SSNs cannot be posted to an individual’s earnings
record in SSA’s Master Earnings File. Instead, these wages are placed
in the ESF—a repository for unmatched wages. Suspended wages can affect
a worker’s eligibility for and/or the amount of retirement, disability,
or survivor benefits.
In a recent audit of nonwork SSNs, we found that individuals having public responsibilities
and positions of trust, primarily Federal and active duty military employees,
had wages in SSA’s unauthorized employment file. Our proposed review would
determine whether a similar condition exists for such employees where SSA could
not match the name and/or SSN on the wage report to Agency records and had to
place the wages in the ESF.
A preliminary review of the ESF indicates that military branches are still submitting
items to the ESF. Just as we are concerned about individuals not authorized
to work, we are concerned about unknown individuals working for the military.
These may be simple reporting errors, and not all contain wages, but they do
represent a known problem reported to SSA.
REPORTED EARNINGS BEFORE THE ISSUANCE OF A SOCIAL SECURITY NUMBER
Planned Start
Carry Over
Objective
To determine why numberholders are showing earnings on their earnings records
before they are enumerated by SSA.
Background
SSA provides Old-Age, Survivors and Disability Insurance benefits to individuals
based on their lifetime earnings reported under a valid SSN. These earnings
determine whether an individual has enough quarters of coverage, or work credits,
for insured status. Social Security work credits are based on an individual's
total annual wages or self-employment income. An individual can earn up to four
credits each year. The amount needed for a credit changes from year to year.
In 2002, for example, an individual earned one credit for each $870 of wages
or self-employment income. When an individual earns $3,480, he or she has earned
four credits for the year.
Our March 2003 Congressional Response Report, Social Security Administration
Benefits Related to Unauthorized Work (A-03-03-23053), noted that Social Security
laws and regulations only sometimes differentiate between citizens and noncitizens
for the purpose of determining quarters of coverage. As a result, in many cases,
SSA creates a work history for individuals with valid SSNs, even when some of
the earnings belonged to noncitizens who were in the United States illegally
or were otherwise unauthorized to work at the time of their earnings but who
later obtained valid SSNs.
In cases where earnings before enumeration have occurred in SSA’s systems,
the individuals in question could have been working in the economy in violation
of immigration laws. It is also possible these cases represent other problems,
such as improper postings by SSA or errors in SSA’s Numident.
As part of our review, we will extract earnings records from SSA’s systems
showing earnings before enumeration and review a sample of these records to
determine the frequency of such occurrences, their causes, and their potential
impact on the integrity of SSA's programs. Our assessment will also note any
situations that may relate to SSN misuse and/or a violation of immigration laws.
SOCIAL SECURITY NUMBER CARDS ISSUED AFTER DEATH
Planned Start
1st Quarter FY 2004
Objective
To assess SSA’s controls over the issuance of replacement SSN cards where
the Numident contains a date of death.
Background
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
or through the mail. Because SSA must be certain the individual is who he or
she claims to be, SSA requires that each applicant present documentary evidence
of his or her identity. An identity document submitted as evidence must be recently
issued and provide information so field office personnel can compare its contents
with SS-5 data and/or with the applicant’s physical appearance.
Field office personnel review the SS-5 and determine the validity of supporting
evidentiary documents. Staff then certifies and enters applicant information
into SSA’s Modernized Enumeration System. Once certified, the SSN application
undergoes numerous automated edits to further validate applicant information.
If the application passes all of these edits, the Modernized Enumeration System
issues a replacement SSN card.
SSA will not issue a replacement card when the numberholder is deceased. Rather,
the Agency can provide verification, such as third-party verification, an SSN
verification printout, or instructions on how to obtain a Numident. The requestor
must provide proper identification and the death certificate, if the death is
not posted on the Numident.
Recent audit work has found numerous instances where it appears multiple SSN
replacement cards were issued to individuals after a date of death had been
posted to the Numident. The review will determine whether the appropriate policy
is being followed and identify instances of potential SSN misuse.
SOCIAL SECURITY NUMBERS WITH MORE THAN ONE OWNER
Planned Start
Carry Over
Objective
To determine how often SSA’s records show that more than one individual
has been provided the same SSN.
Background
One of the key elements SSA employs in administering the Nation’s Social
Security system is the SSN. SSA uses a unique SSN to distinguish each individual’s
record of earnings from all others and stores these SSNs, as well as the associated
numberholder’s information, on a master file called the Numident. Protecting
the SSN’s integrity is essential to the proper posting of earnings, the
payment of benefits, and the prevention of SSN misuse.
In our August 2002 report, Effectiveness of the Social Security Administration’s
Earnings After Death Process (A-03-01-11035), we reported on two Numident records
where more than one person appeared to share the same SSN. At the time, we referred
these cases to SSA for resolution and were told that such errors can occur when
identifying information for one person is erroneously posted to the Numident
record of another. For example, a replacement card could be issued to an individual
in error from someone else’s Numident record.
Our review will determine whether SSA’s Numident contains additional records
where more than one person was given the same SSN. Specifically, we will review
a sample of Numident records where key elements related to the SSN owner appear
to be in dispute and may represent more than one person on the record. We will
also assess the resolution of the earlier Numident errors noted in our August
2002 report. Furthermore, if we do identify instances where individuals are
sharing the same SSN, we will determine (1) whether wages reported by these
individuals were properly posted and (2) the impact any posting errors might
have on the receipt and amount of Social Security benefits.
THE SOCIAL SECURITY ADMINISTRATION’S BROOKLYN SOCIAL SECURITY CARD CENTER
Planned Start
1st Quarter FY 2004
Objective
To (1) evaluate the Brooklyn SSN Card Center's compliance with policies and
procedures for enumerating noncitizens and (2) assess the Center's effectiveness
in meeting its mission.
Background
Since September 11, 2001, SSA has made several changes in the verification of
documents needed to obtain an SSN. Concerns about national security, along with
the growing problem of identity theft, have caused SSA to take steps to protect
the integrity of the SSN. Specifically, effective July 15, 2002 and phased in
through September 2002, SSA began requiring that all field offices obtain confirmation
of all Immigration and Naturalization Service (now the Department of Homeland
Security) documents that did not verify through the Systematic Alien Verification
for Entitlement (SAVE) program. Among other requirements, SSA also instructed
field offices to list the I-94 admission number and status code or the alien
registration number (“A” number) on the SSN application along with
the 15-digit SAVE number.
As part of its efforts to enhance public service and strengthen the SSN’s
integrity, SSA opened the Brooklyn SSN Card Center in November 2002. The Center's
purpose is to improve the document authentication process, deter and detect
SSN fraud, and assist in identifying trends and suspicious activities.
THE SOCIAL SECURITY ADMINISTRATION’S COMPLIANCE WITH POLICIES AND PROCEDURES
FOR ENUMERATING NONCITIZENS
Planned Start
Carry Over
Objective
To evaluate SSA field offices’ compliance with policies and procedures
for enumerating noncitizens.
Background
Since September 11, 2001, SSA has made several changes in the verification of
documents needed to obtain an SSN. Concerns about national security, along with
the growing problem of identity theft, have caused SSA to take steps to protect
the SSN’s integrity. Specifically, effective July 15, 2002 and phased
in through September 2002, SSA began requiring that all field offices obtain
confirmation of all Immigration and Naturalization Service (now the Department
of Homeland Security) documents that did not verify through the Systematic Alien
Verification for Entitlement (SAVE) program. Among other requirements, SSA instructed
field offices to list the I-94 admission number and status code or the alien
registration number (“A” number) on the SSN application along with
the 15-digit SAVE number.
Recent SSA pilot studies have shown that field office personnel are not always
following these new procedures. We will analyze a statistical sample of original
SSNs issued to noncitizens to determine, on a nation-wide level, the extent
of field office compliance with SSA’s enumeration policies and procedures.
THE SOCIAL SECURITY ADMINISTRATION’S
COMPLIANCE WITH POLICIES AND PROCEDURES FOR ENUMERATING NONCITIZENS AT OVERSEAS
POSTS
Planned Start
1st Quarter FY 2004
Objective
To evaluate SSA's compliance with policies and procedures for enumerating noncitizens
through Foreign Service Posts and the Office of International Operations.
Background
Since September 11, 2001, SSA has made several changes in the verification of
documents needed to obtain an SSN. Concerns about national security, along with
the growing problem of identity theft, have caused SSA to take steps to protect
the integrity of the SSN. Specifically, effective July 15, 2002 and phased in
through September 2002, SSA began requiring that all field offices (FO) obtain
confirmation of all Immigration and Naturalization Service (now the Department
of Homeland Security) documents that did not verify through the Systematic Alien
Verification for Entitlement (SAVE) program. Among other requirements, SSA also
instructed FOs to list the I-94 admission number and status code or the alien
registration number (“A” number) on the SSN application along with
the 15-digit SAVE number.
Furthermore, since individuals residing overseas can obtain SSNs with the assistance
of SSA's Office of International Operations and its representatives at Foreign
Service Posts, these locations are also required to take additional verification
steps when reviewing Department of Homeland Security documents.
Given the tragic events of September 11, SSA must ensure the integrity of its
enumeration process in all locations, including overseas. OIG has never reviewed
SSA’s procedures for enumerating noncitizens through Foreign Service Posts
or the Office of International Operations.
THE SOCIAL SECURITY ADMINISTRATION’S INTERNAL USE OF EMPLOYEE SOCIAL SECURITY
NUMBERS
Planned Start
1st Quarter FY 2004
Objective
To determine the extent of SSA’s internal use of employees’ SSNs
and evaluate the safeguards used within the Agency to protect the confidentiality
of these SSNs.
Background
The SSN was created in 1936 as a means of tracking workers' earnings and eligibility
for Social Security benefits. Nevertheless, over the years, the SSN has become
a de facto national identifier used by Federal agencies, State and local governments,
and private organizations. The expanded use of the SSN as a national identifier
provides a tempting motive for many unscrupulous individuals to acquire an SSN
and use it for illegal purposes.
Federal agencies frequently ask individuals for their SSNs because, in certain
instances, the law requires that they do so, or SSNs provide a convenient means
of tracking and exchanging information. While a number of laws and regulations
require the use of SSNs for various Federal programs, they generally also impose
limitations on how those SSNs may be used. Although no single Federal law regulates
overall use and disclosure of SSNs by Federal agencies, the Freedom of Information
Act of 1966, the Privacy Act of 1974, and the Social Security Act Amendments
of 1990 generally govern the disclosure and use of SSNs.
Federal agencies have a responsibility to limit the risk of unauthorized disclosure
of SSNs. SSA is responsible for issuing SSNs and maintaining earnings records
for millions of SSN holders. Therefore, we believe SSA should take a leadership
role to help prevent the use and disclosure of SSNs, including those of its
employees.
THE SOCIAL SECURITY ADMINISTRATION’S PROCEDURES FOR ENUMERATING FOREIGN
STUDENTS
Planned Start
Carry Over
Objective
To (1) evaluate SSA’s policies and procedures for enumerating foreign
students and (2) review the polices and practices of educational institutions,
the Bureau of Citizenship and Immigration Services (BCIS), and the Department
of State as they impact the integrity of SSA’s process for enumerating
foreign students.
Background
Given today’s heightened threat of terrorism, failure to protect the SSN’s
integrity can have enormous consequences for our Nation and its citizens. Now
more than ever, SSA must be particularly cautious in striking a balance between
serving the public and maintaining SSN integrity. We recognize that increased
measures will impact the time necessary to process SSN applications. However,
given the large number of foreign students who enroll in U.S. universities each
year, we believe SSA must employ effective front-end controls in its enumeration
process.
Over 500,000 foreign students enrolled at educational institutions in the United
States during the 2001-2002 academic year. Students coming to the United States
to pursue full-time academic or vocational studies are admitted under three
nonimmigrant visa categories: (1) the F-1 visa, which includes academic students
in colleges, universities, seminaries, conservatories, academic high schools,
other academic institutions and language training; (2) the M-1 visa, which relates
only to vocational students; and (3) the J-1 visa, which covers exchange visitors.
These three categories account for approximately 1 million of the 32.8 million
nonimmigrant visas issued in FY 2001, or about 3 percent of the nonimmigrant
visas issued. Foreign students attending a U.S. university would normally enter
the country with F-1 or J-1 visas.
Students with F 1 visas have the authority to work on-campus when they meet
certain criteria. BCIS requires that the school ensure the F 1 student is attending
school full time and is in good academic standing. In terms of work requirements,
F 1 students may be employed on campus at the institution where they are enrolled.
In determining whether to issue an SSN, SSA field office personnel determine
the eligibility for enumeration of the F 1 foreign students by third party documentation
from the school or the on-campus employer. For example, a foreign student may
present a letter from his/her advisor stating the student is authorized to work
on-campus. Students with J 1 visas are required to provide SSA with a Form DS
2019, Certificate of Eligibility for Exchange Visitor (J-1) Status, indicating
their authorization to work in the United States and an employment letter from
their sponsor.
TITLE II BENEFICIARIES WITH MILITARY EARNINGS
Planned Start
Carry Over
Objective
To provide updated information concerning the status of SSA’s efforts
to determine whether military wage credits are properly included when calculating
benefits for veterans.
Background
Before 1957, when military wages became subject to Social Security taxes and
were credited toward Social Security benefits, members of the military faced
reduced Social Security benefits as a result of their service. Even after military
service became covered under Social Security, their historically low wages still
resulted in relatively small Social Security benefits. To improve retirement
security for members of the armed forces, Congress granted wage credits for
certain service from 1940 to 2001 to boost Social Security benefits.
A letter from the Chairman of the Subcommittee on Social Security, House Committee
on Ways and Means, asked that we investigate and determine the
1. status of ongoing efforts in SSA to ensure members of the military and their
families receive proper accounting of their military wage credits toward benefits;
2. estimated number of members of the military and their eligible family members who may be affected by failure to properly use military wage credits as well as the potential impact on their benefits; and
3. potential amount of under- and overpaid benefits related to inappropriate application of military wage credits.
We will determine (1) the number of military veterans receiving SSA benefits, (2) the complexities of the legal and regulatory environment, (3) potential SSA systems limitations that need to be considered in correcting under- overpayments, (4) the status of any open OIG recommendations from previous audits in this area, and (5) SSA’s planned approach to resolve any under- overpayments.
UTILITY OF EARNINGS WAGE
RECORDS IN THE EARNINGS SUSPENSE FILE
Planned Start
Carry Over
Objective
To determine how older reinstated wages impact individuals’ earnings records
and the amount of benefits paid to them.
Background
Title II of the Social Security Act requires that SSA maintain records of wage
amounts employers pay to individuals. Employers report their employees’
wages to SSA at the conclusion of each tax year. Wages on those employer reports
containing invalid names and/or SSNs cannot be posted to an individual’s
earnings record in SSA’s Master Earnings File. Instead, these wages are
placed in the Earnings Suspense File (ESF)—a repository for unmatched
wages. Suspended wages can affect a worker’s eligibility for and/or the
amount of retirement, disability, or survivor benefits. Suspended wages can
be reinstated from the ESF when they are matched to the correct individual.
SSA reinstates these wages through both automated and manual processes.
In a prior report, we commented on a study conducted by an SSA contractor to
reduce the size and growth of the ESF. The contractor considered various criteria
and alternatives for reducing the size of the ESF, including removing wage items
several years old to keeping all suspense file records. Our report noted that
the earnings data used in the contractor study could have been expanded to provide
SSA a better understanding of the risks related to record removal. We recommended
that SSA conduct further analysis to ensure any data maintained in the ESF will
make a difference in earnings accuracy in terms of eligibility and/or benefit
amount for the wage earner. We also noted that SSA could safely implement a
number of the removal options offered by the contractor, including removing
items in the ESF that were 43-years-old or older. This report is intended to
assist SSA with this analysis.
Management of the Disability
Process
SSA has tested several improvements to the disability claims process. To date,
these initiatives have shown some progress in making improvement. In January
2003, GAO added the modernizing of Federal disability programs, including SSA’s,
to its high-risk list.
SSA administers the Disability Insurance (DI) and Supplemental Security Income
(SSI) programs that provide benefits based on disability. Most disability claims
are initially processed through a network of Social Security field offices and
State Disability Determination Services (DDS). SSA representatives in the field
offices are responsible for obtaining applications for disability benefits and
verifying non-medical eligibility requirements, which may include age, employment,
marital status, or Social Security coverage information. After initial processing,
the field office sends the case to a DDS for evaluation of disability.
The DDSs, which SSA fully funds, are State agencies responsible for developing
medical evidence and rendering the determination of whether the claimant is
disabled or blind. After the DDS makes the disability determination, it returns
the case to the field office for appropriate action depending on whether the
claim is allowed or denied. In FY 2003, over 2.5 million initial disability
claims were processed, and the average processing time was 97.1 days.
Once SSA establishes an individual is eligible for disability benefits under
either the DI or SSI program, the Agency turns its efforts toward ensuring the
individual continues to receive benefits only as long as SSA’s eligibility
criteria are met. Disability benefits will not continue if any of the following
occur:
• a continuing disability review shows the individual is no longer disabled.
• an individual returns to work and has income over SSA’s allowable
amount,
• a child turns age 18 and is not considered disabled under adult criteria,
or
• legislation or Federal regulations rescind a prior disabling condition
from qualifying for benefits.
SSA’s Office of Hearings and Appeals (OHA) is responsible for holding
hearings and issuing decisions in SSA’s appeals process. OHA’s field
structure consists of 10 regional offices and 140 hearing offices. Administrative
law judges (ALJ) hold hearings and issue decisions in hearing offices nationwide.
In FY 2003, hearing offices processed over 570,000 cases, and the average processing
time was 344 days.
The Appeals Council is the final level of administrative review for claims filed
under SSA’s disability programs. The Appeals Council reviews ALJ decisions
and dismissals upon the claimant’s timely request for review. In FY 2003,
the Appeals Council processed 100,750 cases, and the average processing time
was 294 days.
Over the last several years,
SSA has tested improvements to the disability claims process as a result of
concerns about the timeliness and quality of customer service. The disability
improvements combine initiatives that have been tested and piloted and include
all levels of eligibility determination—beginning with State DDSs and
going through the hearings and appeals processes.
To date, these initiatives have shown some progress in making improvements in
the disability claims process. Still, in January 2003, GAO added the modernizing
of Federal disability programs, including SSA’s, to its 2003 high-risk
list. The Commissioner recently announced several decisions on the future of
SSA’s disability process. This included the Commissioner’s decisions
to
• pursue the expansion of the Single-Decision Maker authority nationwide,
• end the requirements for the claimant conference in sites testing the
prototype disability process,
• evaluate the elimination of the reconsideration level of the claims
process nationwide,
• make additional improvements to the hearings process, and
• implement an Electronic Disability System by 2004.
SSA reports that its short-term initiatives have improved the hearings process.
The short-term initiatives include expedited techniques for the review of cases
and technology enhancements designed to improve the timeliness of decisions.
Furthermore, SSA expects the electronic disability system to provide OHA a more
efficient and effective case processing system when implemented. In September
2003, the Commissioner announced long-term initiatives to address the Agency’s
disability-related challenges, which she stated are predicated on the successful
implementation of the Electronic Disability System.
Disability Fraud
Fraud is an inherent risk in SSA’s disability programs. Some unscrupulous
people view SSA’s disability benefits as money waiting to be taken. A
key risk factor in the disability program is individuals who feign or exaggerate
symptoms to become eligible for disability benefits. Another key risk factor
is the monitoring of medical improvements for disabled individuals to ensure
those individuals who are no longer disabled are removed from the disability
rolls.
SSA, in conjunction with our office, has taken an active role in addressing
the integrity of the disability programs through the Cooperative Disability
Investigations (CDI) program. The CDI program’s mission is to obtain evidence
that can resolve questions of fraud in SSA’s disability programs. SSA’s
Offices of Operations, Disability Programs, and Disability Determinations along
with the OIG manage the CDI program. There are 18 CDI units operating in 17
States. In FY 2003, the CDI units saved SSA approximately $100 million by identifying
fraud and or similar fault in initial and continuing claims in SSA’s disability
programs.
In FY 2004, we plan to complete nine reviews and begin five reviews in this
area.
We Plan to Complete the
Following Reviews in FY 2004
Appeals Council Process Improvement Action Plan
Comparison of Suspension and Termination Codes Among Social Security Administration
Databases
Disability Determination Services’ Claims Processing Performance
Office of Hearings and Appeals Performance to Identify Best Practices
Office of Hearings and Appeals Pre-effectuation Review Process
Summary Report of Single Audit Oversight Activities for Fiscal Year 2003
The Social Security Administration’s Ability to Offset Special Disability
Workload Underpayments
The Social Security Administration’s Oversight of Indirect Costs Claimed
by State Disability Determination Services
The Social Security Administration’s Ticket to Work Program
We Plan to Begin the Following Reviews in FY 2004
Summary Report of Single Audit Oversight Activities for Fiscal Year 2004
The Social Security Administration’s Processes for Discontinuing Benefit
Payments and Waiving Overpayments Following Disability Cessation
The Social Security Administration’s System for Processing Title II Workers’ Compensation
Claims with a Workers’ Compensation/Public Disability Benefit Offset
The Social Security Administration’s Ticket to Work Program—Employment
Networks
Workers’ Compensation System Improvements
APPEALS COUNCIL PROCESS
IMPROVEMENT ACTION PLAN
Planned Start
Carry Over
Objective
To assess the effectiveness of the short-term initiatives of the Appeals Council
Process Improvement (ACPI) Action Plan.
Background
The Office of Hearings and Appeals Appeals Council provides the final level
of administrative review for claims. The Council reviews hearing decisions and
dismissals at a claimant’s request. The Council receives approximately
85,000 requests for review each year. The processing times for cases has increased
from 141 days in 1995 to 505 days in 2000. The pending requests increased from
47,000 in 1995 to 128,000 in 2000. In March 2000, SSA established the ACPI Action
Plan to improve the quality of service to claimants seeking requests for review
by the Appeals Council. The goal was to reduce the processing time for requests
for review cases to 90 days by the end of 2003. In addition, ACPI would reduce
the pending request workload to 16,224 by the end of 2003.
The Plan contains both short-term process innovations and long-term structural
improvements. The short-term initiatives include increasing productivity of
existing staff, adding resources to increase capacity, and adjusting incoming
workloads. These initiatives began at various times in 2000 and were scheduled
to end in 2001. Specific short term actions include hiring 30 staff, the Office
of General Counsel providing 25 workyears of staff time, emphasis on aged requests,
managers processing appeals, and using retired administrative law judges to
review cases.
COMPARISON OF SUSPENSION AND TERMINATION CODES AMONG SOCIAL SECURITY ADMINISTRATION
DATABASES
Planned Start
1st Quarter FY 2004
Objective
To determine whether disabled individuals receiving concurrent benefits have
been suspended or terminated in one SSA program while continuing to receive
benefits under another SSA program.
Background
Disabled individuals can qualify for disability benefits under both the Disability
Insurance and Supplemental Security Income programs. Such individuals, known
as concurrent beneficiaries, can continue to receive benefits for as long as
they meet the eligibility requirements under both programs.
However, certain events, such as the cessation of disability, will have the
effect of suspending and/or terminating payments under both programs. By reviewing
suspension and termination codes in both the Master Beneficiary Record and Supplemental
Security Record databases and investigating whether these codes are consistently
used for the concurrent beneficiaries, we plan to isolate any individuals suspended
or terminated in only one of SSA’s disability programs.
DISABILITY DETERMINATION SERVICES’ CLAIMS PROCESSING PERFORMANCE
Planned Start
Carry Over
Objective
To identify potential factors and practices at State Disability Determination
Services (DDS) that result in differing levels of performance in the disability
claims processing areas of production, timeliness, accuracy and cost.
Background
In accordance with Federal regulations, each State’s DDS makes medical
determinations of disability for SSA’s Disability Insurance and Supplemental
Security Income programs. SSA pays 100 percent of the allowable costs incurred
by DDSs in making disability determinations. Each State is responsible for establishing
the DDS organizational structure; providing qualified management, personnel,
medical consultant services, adequate facilities, and a quality assurance function;
and maintaining regulatory performance levels and a performance monitoring system.
Performance statistics for FY 2002 initial claims vary widely among the 54 DDSs.
Performance statistics show DDS
1. processing times ranging from a low of 64 days to a high of 129 days for
Title II claims and from a low of 69 to a high of 134 days for Title XVI claims,
2. allowance rates ranging from a low of 26 percent to a high of 59 percent,
and
3. consultative examination purchase rates ranging from a low of 24 percent
to a high of 77 percent.
OFFICE OF HEARINGS AND APPEALS PERFORMANCE TO IDENTIFY BEST PRACTICES
Planned Start
1st Quarter FY 2004
Objective
To identify potential factors and practices at hearing offices that result in
differing levels of performance in the areas of productivity and timeliness.
Background
The Office of Hearings and Appeals administers the hearings and appeals program
for SSA. The hearing process begins after an applicant for benefits has been
denied at the initial and reconsideration levels. The next step in the appeals
process is a hearing before an administrative law judge (ALJ). The request for
hearing is most likely to involve the issue of disability—Disability Insurance
or Supplemental Security Income or both. Medicare and retirement or survivor
issues comprise less than 10 percent of the cases ALJs decide.
The Chief ALJ is the principal consultant and advisor to the Associate Commissioner
on all matters concerning the ALJ hearing process and all field operations.
The Chief ALJ manages and administers the hearing organization consisting of
10 regional offices and 140 hearing offices. Approximatley 1,000 ALJs enter
over 500,000 decisions at the hearing level annually.
OFFICE OF HEARINGS AND APPEALS PRE-EFFECTUATION REVIEW PROCESS
Planned Start
Carry Over
Objective
To (1) review decisions made by the Office of Quality Assurance and Performance
Assessment (OQA), the Appeals Council, and administrative law judges (ALJ) as
part of the pre-effectuation review (PER) process and (2) determine the reasons
for, and effects of, divergent decisions made by these parties.
Background
As part of its continuing efforts to improve the quality of its disability determinations,
SSA has modified the review process involving disability allowance decisions
made by ALJs. In August 1998, the Agency began the PER process of ALJ decisions.
This process allows OQA to review allowance decisions made by ALJs and refer
them to the Appeals Council for review. PERs focus on cases that involve problematic
issues or have a higher likelihood of error. Once referred, the Appeals Council
considers the case and OQA’s reasons for believing the decision should
be reviewed. The Appeals Council has 60 days to look at those cases it decides
to review. After its review, it can issue its own decision on the case or remand
the case back to the ALJ who initially decided to allow the case for further
review and a final disability determination.
SSA initiated the PER process to identify policy issues that should be clarified
through publication of regulations or rulings. Initial discussions with SSA
staff indicate the PER process has identified differences in disability determinations
between OQA policy and the ALJ’s decisions. Through the PER process, OQA
has identified cases that were initially allowed by the ALJ, but that OQA feels
should be disallowed. Further, after referral from OQA, the Appeals Council
often agrees with OQA’s position and remands such cases back to the ALJs
for further review.
SUMMARY REPORT OF SINGLE AUDIT OVERSIGHT ACTIVITIES FOR FISCAL YEAR 2003
Planned Start
2nd Quarter FY 2004
Objective
To summarize internal control weaknesses at State Disability Determination Services
(DDS) reported in State single audits and identified during the OIG single audit
oversight activities.
Background
On July 5, 1996, the President signed the Single Audit Act Amendments of 1996,
which extended the statutory audit requirement to nonprofit organizations and
revised various provisions of the 1984 Act including raising the Federal financial
assistance dollar threshold from $100,000 to $300,000. On June 30, 1997, the
Office of Management and Budget issued revised Circular A-133, Audits of States,
Local Governments and Non-Profit Organizations, to implement the 1996 amendments
and rescinded Circular A-128.
There are 54 DDSs located in the 50 States, the District of Columbia, Puerto
Rico, Guam, and the Virgin Islands. All DDSs are subject to the Single Audit
Act except for the federally administered Virgin Islands DDS.
THE SOCIAL SECURITY ADMINISTRATION’S ABILITY TO OFFSET SPECIAL DISABILITY
WORKLOAD UNDERPAYMENTS
Planned Start
1st Quarter FY 2004
Objective
To quantify the amount of Special Disability Workload (SDW) related underpayments
that can be offset against overpayments for the same beneficiaries.
Background
SSA has identified a group of individuals who are receiving Supplemental Security
Income (SSI) disability benefits and who appear to be insured for, but are not
currently receiving, disability benefits under the Disability Insurance (DI)
program. These cases are referred to as the SDW workload. Some of these individuals
may have a retroactive period for benefit payments dating back as far as 1973.
However, the average retroactive period is 8 years.
SSA provides notice of potential eligibility and the statutory requirement to
file for disability benefits under the DI program. However, SSI recipients must
apply for DI benefits for which they may be eligible. The recipients do not
have an option. In addition, other individuals may apply (auxiliary applications)
for benefits under the DI program.
SDW cases may involve lengthy retroactive periods and could result in substantial
retroactive DI program benefit payments. These benefit payments may be considered
“underpayments” to beneficiaries.
THE SOCIAL SECURITY ADMINISTRATION’S
OVERSIGHT OF INDIRECT COSTS CLAIMED BY STATE DISABILITY DETERMINATION SERVICES
Planned Start
Carry Over
Objective
To assess SSA’s oversight of indirect costs claimed by State Disability
Determination Services (DDS).
Background
SSA reimburses State DDSs for 100 percent of allowable expenditures incurred
in making disability determinations under SSA’s Disability Insurance and
Supplemental Security Income programs. The expenditures include both direct
and indirect costs. Indirect costs arise from activities that benefit multiple
State and Federal agencies but are not readily assignable to any one agency.
Examples of indirect costs include services, such as accounting, auditing, budgeting,
and payroll.
In accordance with Office of Management and Budget Circular A-87, Cost Principles
for State, Local, and Indian Tribal Governments, indirect costs can be allocated
to SSA based on the terms of either a negotiated indirect cost rate or through
a cost allocation plan. In FY 2002, SSA reimbursed DDSs about $109 million for
indirect costs.
THE SOCIAL SECURITY ADMINISTRATION’S TICKET TO WORK PROGRAM
Planned Start
Carry Over
Objective
To conduct a performance review of SSA and its contractor to ensure contract
objectives are being met and are in accordance with the Ticket to Work and Work
Incentives Improvement Act.
Background
The Ticket to Work (TTW) program was established by the 1999 Ticket to Work
and Work Incentives Improvement Act. The program provides eligible Disability
Insurance and disabled Supplemental Security Income beneficiaries with tickets
that can be used to obtain vocational rehabilitation or employment services
through Employment Networks. The program is intended to increase access to,
and the quality of, rehabilitation and employment services available to disabled
beneficiaries. TTW is designed to provide beneficiaries with greater freedom
and choice of service providers, create competition among providers to provide
high quality services that are responsive to beneficiary needs, and give providers
incentives to deliver services in the most efficient and appropriate manner
to achieve desired outcomes.
Daily administration of the TTW program is the responsibility of a Program Manager.
SSA hired a contractor to perform this role. The contract includes 23 tasks
representing the specific contract services for which the contractor’s
Program Manager is responsible.
We have selected for review the following 10 tasks identified in the contract.
The remaining tasks will be reviewed separately.
Task 1- Contractor Orientation
Task 2 - Start-Up Plan
Task 3 - Toll-Free Number
Task 8 - Ticket Program Training
Task 9 - Management of Ticket Process
Task 16 - Monthly Progress Reports
Task 17 - Annual Report
Task 20 - Periodic Meetings with SSA Project Officer
Task 21 - Periodic Special Studies
Task 22 - Conference Planning
Improper Payments
Determining and paying accurate and timely program benefits are primary commitments
of SSA, along with good stewardship of the trust fund and the General Revenue
fund.
SSA is responsible for issuing benefit payments under the Old-Age, Survivors,
and Disability Insurance (OASDI) and SSI programs. In FY 2003, SSA issued $483
billion in benefit payments to 53.1 million beneficiaries. Considering the volume
and amount of payments SSA makes each month, even the slightest error in the
overall process can result in millions of dollars in over- or underpayments.
Improper payments are defined as payments that should not have been made or
were made for incorrect amounts. Examples of improper payments include inadvertent
errors, payments for unsupported or inadequately supported claims, payments
for services not rendered, or payments to ineligible beneficiaries. The risk
of improper payments increases in programs with (1) a significant volume of
transactions, (2) complex criteria for computing payments, and/or (3) an overemphasis
on expediting payments. Since SSA is responsible for issuing timely benefit
payments for complex entitlement programs to over 50 million individuals, SSA
is at-risk of making significant improper payments.
The President and Congress have expressed interest in measuring the universe
of improper payments within the Government. Specifically, in August 2001, OMB
published the FY 2002 President's Management Agenda, which included a Government-wide
initiative for improving financial performance. In November 2002, the Improper
Payments Information Act of 2002 was enacted, and OMB issued guidance in May
2003 on implementing this new law.
Under this law, agencies that administer programs where the risk of erroneous
payments is significant must estimate their annual amount of improper payments
and report this information in their Performance and Accountability Report for
FYs ending on or after September 30, 2004. OMB will use this information while
working with the agencies to establish goals for reducing erroneous payments
for each program.
SSA and the OIG have had on-going discussions on improper payments—on
such issues as detected vs. undetected improper payments and avoidable overpayments
vs. unavoidable overpayments which are outside the Agency’s control and
a “cost of doing business.” In August 2003, OMB issued specific
guidance to SSA to only include avoidable overpayments in the Agency’s
improper payment estimate because these payments could be reduced through changes
in administrative actions. Unavoidable overpayments that result from legal or
policy requirements are not to be included in SSA’s improper payment estimate.
In September 2003, the OIG issued an Issue Paper on improper payments—where
we analyzed overpayments from SSA, other Federal agencies, and private sector
disability insurers. Based on this work, we plan to initiate a comprehensive
and statistically valid review in FY 2004 to quantify the amount of undetected
overpayments in SSA’s disability programs. Additionally, preliminary results
from one of our audits at the end of FY 2003 show significant overpayments related
to earnings by disabled beneficiaries went undetected by SSA. This work and
other studies—such as one to assess whether overpayment waivers were appropriate—will
be completed and/or initiated in FY 2004 and beyond to address the issue of
improper payments.
SSA has undertaken many projects to identify and improve areas where it could
do more to reduce improper payments and/or recover amounts overpaid. Specifically,
SSA has been working to improve its ability to prevent over- and underpayments
by obtaining beneficiary information from independent sources sooner and/or
using technology more effectively. In this regard, SSA has initiated new computer
matching agreements, obtained on-line access to wage and income data, and implemented
improvements in its debt recovery program.
Working with SSA, we have made great strides in reducing benefit payments to
prisoners and SSI payments to fugitive felons, and these efforts continue. However,
improper payments, including those to deceased beneficiaries, students, and
individuals receiving State workers’ compensation benefits, continue to
drain the Social Security trust fund.
In FY 2004, we plan to complete 16 reviews and begin 12 reviews in this area.
We Plan to Complete the
Following Reviews in FY 2004
Death Underpayments Without an Associated Social Security Number
Disability Insurance Beneficiaries with Earnings Reported on the Master Earnings
File
Follow up of School Attendance by Child Beneficiaries over Age 18
Impact on the Social Security Administration’s Programs When Auxiliary
Beneficiaries Have Incorrect Social Security Numbers
Interim Assistance Reimbursement to Los Angeles County, California, Under the
Supplemental Security Income Program
Old-Age, Survivors and Disability Insurance Overpayments
Payments to Student Beneficiaries Beyond the Maximum Age of Entitlement
Representative Payee Reports Indicating Excess Conserved Funds for Supplemental
Security Income Recipients
Social Security Funds Held in Dormant Bank Accounts
Supplemental Security Income Overpayments
The Social Security Administration’s Administrative Finality Rules
The Social Security Administration’s Clean up of Title II Disability
Insurance Benefit Cases with Workers’ Compensation Offset
The Social Security Administration’s Controls over the Title XVI Waiver
Process
The Social Security Administration’s Controls over Withholding Taxes
and Suspending Benefits to Certain Foreign Beneficiaries
The Social Security Administration’s Determination of a High Average
Current Earnings for Disability Insurance Benefits Involving Workers’ Compensation
Title XVI Overpayment Write-offs when Beneficiaries are Unwilling or Unable
to Pay, Cannot be Located or are Out of the Country
We Plan to Begin the Following Reviews in FY 2004
Controls over Accounts Payable
Controls over Attorney Fee Payments
Existence of State Worker’s Compensation Payments Not Considered by the
Social Security Administration When Disability Insurance Benefits are Calculated
Follow Up on the Social Security Administration’s Controls over Withholding
Taxes and Suspending Benefits to Foreign Beneficiaries where Country of Citizenship
is Known
Incentive Payments to Prisons
Management of the Treasury Reclamation Process
Overpayment Rates for the Social Security Administration’s Disability
Programs
Special Disability Workload Processing
The Death Alert Control and Update System Exception File
Uncollectible Title XVI Overpayments that Exceed $200
Undetected Overpayments in the Social Security Administration’s Disability
Programs
Wage Alerts for Supplemental Security Income Recipients
DEATH UNDERPAYMENTS WITHOUT
AN ASSOCIATED SOCIAL SECURITY NUMBER
Planned Start
Carry Over
Objective
To determine whether SSA is capturing the SSNs of individuals claiming Title
II underpayments after a beneficiary has died to ensure (1) the payment is made
to an appropriate party and (2) required information is shared with the Internal
Revenue Service (IRS).
Background
When a beneficiary dies and an underpayment occurs, a third party can claim
the final payment using an SSA-1724, Claim for Amounts Due in the Case of a
Deceased Beneficiary. This final SSA payment is generally made to a parent or
surviving spouse. However, SSA does not always record on the SSA-1724 the SSN
of the third party receiving the payment. The lack of this information increases
the risk of inappropriate payments to third parties. In addition, when the SSN
is missing, SSA cannot report the payment to the IRS for tax collection purposes.
In May 2002, SSA implemented the Single Payment System (SPS), a national system
used to automate attorney fee payments and other Title II payments that cannot
be made through the current Title II system. SPS was created to (1) ensure the
timeliness of attorney fee payments; (2) stop duplicate and erroneous payments;
and (3) document management information.
Our review will determine whether SSA is capturing the SSNs of individuals claiming
Title II underpayments on an SSA-1724. Specifically, we will review a sample
of Calendar Year 2001 and 2002 death underpayments to determine the potential
risk of fraud and the possible under-reporting of taxable income to the IRS.
Our review will also determine whether the implementation of SPS has increased
the likelihood the SSN is captured during the payment process.
DISABILITY INSURANCE BENEFICIARIES WITH EARNINGS REPORTED ON THE MASTER EARNINGS
FILE
Planned Start
Carry Over
Objective
To determine whether SSA investigated earnings posted to SSA’s Master
Earnings File for Tax Years 1996 through 2000 for individuals who were receiving
Disability Insurance benefits.
Background
An individual is disabled under §223 (d)(1) of the Social Security Act
if he or she cannot engage in any substantial gainful activity (SGA) by reason
of any medically determinable physical or mental impairment that (1) can be
expected to result in death or (2) has lasted (or can be expected to last) for
a continuous period of not less than 12 months.
SGA is defined as work activity that involves significant physical or mental
activities performed for pay or profit. SSA has established earnings guidelines
as a basis for determining whether an individual is engaged in SGA. Average
monthly earnings of more than $300 may indicate the ability to engage in SGA.
Because an individual’s entitlement to Disability Insurance benefits is
based on the determination that he or she cannot engage in SGA, SSA must perform
a continuing disability review when earnings reported to the Agency indicate
the beneficiary has returned to work.
Through computer analysis, we identified 29,871 individuals (in 1 of the 20
segments of SSA’s data files) who were receiving Disability Insurance
benefits as of March 2002 and whose earnings exceeded $3,600 in any year between
1996 and 2000.
FOLLOW UP OF SCHOOL ATTENDANCE BY CHILD BENEFICIARIES OVER AGE 18
Planned Start
Carry Over
Objective
To determine the adequacy of SSA’s procedures to ensure that child beneficiaries
over age 18 were entitled to receive student benefits in accordance with the
Social Security Act (Act).
Background
Title II of the Act provides benefits to children of insured workers upon the
retirement, death, or disability of the worker. Generally, child beneficiaries
may continue to receive benefits until they marry or reach age 18. Amendments
to the Act provide for extended benefits beyond age 18 to enable child beneficiaries
who are full-time students at an elementary or secondary school to complete
their education.
SSA relies on student beneficiaries to voluntarily report events that may affect
their continuing entitlement to benefits. For example, students who attend school
part-time or have graduated or dropped out are no longer eligible for benefits.
In addition, students who are married, convicted of a crime, or paid by their
employer to attend school are no longer eligible for benefits.
Our prior audit work has disclosed that student beneficiaries received incorrect
and unsupported payments of $73.9 and $140.4 million, respectively. In response
to our audit, SSA redesigned its student monitoring system in June 2001. Specifically,
SSA revised its forms and reporting requirements, obtained school certification
before awarding student benefits, shifted the workload from processing centers
to field offices, and provided its employees additional training and guidance.
IMPACT ON THE SOCIAL SECURITY ADMINISTRATION’S PROGRAMS WHEN AUXILIARY
BENEFICIARIES HAVE INCORRECT SOCIAL SECURITY NUMBERS
Planned Start
Carry Over
Objective
Determine the impact on SSA’s programs when auxiliary beneficiaries have
incorrect SSNs on their Master Beneficiary Records.
Background
Auxiliary beneficiaries are children, widows, spouses, and parents who receive
Old-Age, Survivors and Disability Insurance benefits based on another wage earner’s
Social Security record. As such, the primary wage earner’s SSN—not
the auxiliary beneficiary’s SSN—is used to track the auxiliary beneficiary’s
benefit payments on the Master Beneficiary Record.
Many of SSA’s systems use SSNs to control information about individuals.
For example, death reports, Supplemental Security Income records, earnings records,
and prisoner information are associated with the SSNs of the individuals to
whom the information pertains. Because this information can affect an individual’s
entitlement to benefits, SSA routinely matches this information and its payment
files to ensure payment accuracy. When SSNs are incorrect, payment accuracy
may be impacted since SSA’s computer matches based on SSNs would be ineffective.
INTERIM ASSISTANCE REIMBURSEMENT TO LOS ANGELES COUNTY, CALIFORNIA, UNDER THE
SUPPLEMENTAL SECURITY INCOME PROGRAM
Planned Start
Carry Over
Objective
To determine whether the Los Angeles County, California, Department of Public
Social Services (1) calculated and deducted the correct amount of interim assistance
from the retroactive Supplemental Security Income payments received from SSA
and provided the balance to the recipient timely and (2) returned to the Agency
any excess amounts that could not be remitted to the recipient.
Background
In 1974, the Congress established the Supplemental Security Income (SSI) program
under Title XVI of the Social Security Act. The SSI program provides a minimum
income level to financially needy individuals who are aged, blind, or disabled.
Aged, blind, or disabled individuals with income and resources below established
limits may qualify for payments under the SSI program upon filing an application
with SSA.
Many SSI applicants need financial assistance before SSA establishes SSI eligibility.
Therefore, States may enter into an agreement with SSA whereby the States provide
the individual interim assistance from State funds. Upon determining the applicant’s
eligibility for SSI, SSA reimburses the State or local government for payments
made to the recipient from State funds. If the individual is found to be ineligible,
SSA is not liable for the interim assistance provided by the State. This coordinated
Federal/State program is called the Interim Assistance Reimbursement (IAR) program.
During State FYs July 1, 1999 through June 30, 2001, SSA made about $460 million
in IAR-related payments to 38 States and the District of Columbia.
OLD-AGE, SURVIVORS AND DISABILITY INSURANCE OVERPAYMENTS
Planned Start
1st Quarter FY 2004
Objective
To assess SSA’s efforts to identify, prevent, and resolve Old-Age, Survivors
and Disability Insurance (OASDI) overpayments.
Background
SSA administers the OASDI program under Title II of the Social Security Act.
The OASDI program provides retirement benefits to insured individuals who have
reached the minimum retirement age, survivors’ benefits to dependents
of insured wage earners in the event the family wage earner dies, and disability
benefits to disabled wage earners and their families.
Beneficiaries sometimes receive Social Security benefits to which they are not
entitled, thus creating an overpayment. For example, beneficiaries may not promptly
report events—such as changes in earnings or marital status—that
affect their entitlement to benefits. When an overpayment is detected, SSA generally
attempts to recover the overpayment by adjusting current benefits being paid
to the individual. If current benefits are not being paid, SSA may pursue collection
through other means, including adjusting an individual’s tax refund.
In this review, we plan to provide an overall picture of OASDI overpayments
over the last 7 years by obtaining OASDI overpayment information for FYs 1996
through 2002 and reviewing the following:
• overpayment amounts written off, waived, collected, etc.;
• issues that arose between 1996 and 2002 that may have caused increases
or decreases in overpayments;
• types of overpayments that are inherent to the design of the OASDI program
and cannot be changed without legislation; and
• tools and techniques available to SSA to collect OASDI overpayments.
PAYMENTS TO STUDENT BENEFICIARIES BEYOND THE MAXIMUM AGE OF ENTITLEMENT
Planned Start
Carry Over
Objective
To determine the effectiveness of SSA’s controls to detect and prevent
payments to student beneficiaries beyond the maximum age of entitlement.
Background
SSA’s Terminations, Attainments, and Student Enforcement program processes
all phases of student entitlement, including termination of benefits. For schools
that do not require enrollment each quarter or semester, student benefits are
payable through the earlier of (1) the second month after the month in which
the child reaches age 19 or (2) the month when the student completes the course
in which he or she is enrolled. For schools that require enrollment each quarter
or semester, student benefits are payable through the last month of the quarter
or semester in which the child reaches age 19.
In December 1998, SSA implemented systems modifications to preclude overpayments
to student beneficiaries resulting from clerical errors in determining the maximum
age of entitlement. Generally, the maximum age for student benefits is 19 years
and 2 months. SSA established automated controls to prevent an end-of-school-year
date beyond the date in which a student reached 19 years and 2 months. However,
in May 2003, SSA issued Policy Instruction EM-03047, Age 19 Student Benefit
Reminders, which identified continuing problems and potential overpayments involving
student entitlement past age 19.
REPRESENTATIVE PAYEE REPORTS INDICATING EXCESS CONSERVED FUNDS FOR SUPPLEMENTAL
SECURITY INCOME RECIPIENTS
Planned Start
Carry Over
Objective
To evaluate SSA’s policies and procedures for processing Representative
Payee Reports indicating excess conserved funds for Supplemental Security Income
(SSI) recipients. Specifically, we will evaluate SSA’s
• controls to ensure all reports of excess conserved funds are forwarded
to SSA field offices for review and
• compliance with policies for resolving reported excess conserved funds.
Background
Under the SSI program, resources must not be more than $2,000 for an individual
or $3,000 for a couple. If an individual exceeds these resource limits, benefit
payments to the recipient are usually suspended. Benefits are resumed if the
recipient’s resources subsequently fall below the limit.
Representative payees are required to provide SSA an annual Representative Payee
Report accounting for how benefits were spent and how much in benefits was conserved.
When a representative payee reports conserved funds over $2,000, SSI eligibility
is questionable. Therefore, SSA must contact the representative payee to determine
continued eligibility. In addition, a large amount of conserved SSI payments
may also indicate the representative payee is not spending enough to meet the
recipient’s needs.
SOCIAL SECURITY FUNDS HELD IN DORMANT BANK ACCOUNTS
Planned Start
Carry Over
Objective
To determine the extent SSA can recover Social Security funds in bank accounts
held by presumed dead beneficiaries.
Background
To uncover fraud, SSA and the Office of the Inspector General’s Office
of Investigations (OI) began an initiative to review cases of older beneficiaries
who have not used Medicare services for 18 months or longer. The investigation
criteria were set based on the belief that older beneficiaries will generally
seek medical services at least once in an 18-month period and generate a Medicare
claim. If a claim is not generated, it is possible the beneficiary has passed
away without SSA knowing and someone else is receiving the beneficiary’s
funds fraudulently.
There have been two phases of this project. The first phase examined beneficiaries
who were 98 years of age or older and had not used Medicare for at least 18
months. The second phase is investigating beneficiaries 90 years old and older
who have not used Medicare for at least 18 months. In each phase, SSA staff
complete an initial review of the identified case and determine the beneficiary’s
status. If SSA cannot determine a beneficiary’s status of, the case is
referred to OI for further investigation.
Through its investigations, OI has determined that some of the beneficiaries
are presumed to be dead and have bank accounts holding SSA funds. In these cases,
the beneficiaries established direct deposit for their benefits, and SSA continued
to deposit the beneficiaries’ checks into those accounts until SSA’s
project identified the cases as probably deceased and suspended payments. During
the project, OI’s New York office identified 15 cases where the beneficiaries
were presumed dead, but SSA continued to deposit funds into their accounts.
SSA estimates that $1 million in Social Security funds have been deposited after
death for these beneficiaries.
At the conclusion of OI’s investigation of these cases, SSA suspended
payments. However, SSA has been unable to recover the funds in the bank accounts.
SSA and OI have been unable to find a death certificate for the beneficiaries
in question. To date, SSA policy requires an official proof of death before
initiating a reclamation request for erroneously paid funds. Absent the death
certificates, the funds remain in the bank accounts. In New York, the State
recovers funds in bank accounts when they are inactive for 5 years and the bank
has been unsuccessful in contacting the account holder.
SUPPLEMENTAL SECURITY INCOME OVERPAYMENTS
Planned Start
Carry Over
Objective
To assess SSA’s efforts to identify, prevent, and resolve Supplemental
Security Income (SSI) overpayments.
Background
Title XVI of the Social Security Act established the SSI program in 1972, effective
January 1, 1974, to provide income to financially needy individuals who are
aged, blind or disabled. SSA relies heavily upon beneficiary self-disclosure
of all financial resources as well as computer matching from other Federal and
State agencies to ensure payment accuracy. Since financial resources may vary
from month to month, SSI payments are error prone and may result in overpayments.
In this review, we plan to provide an overall picture of SSI overpayments over
the last 7 years by obtaining SSI overpayment information for FYs 1996 through
2002 and reviewing the following:
• overpayment amounts written off, waived, collected, etc.;
• issues that arose between 1996 and 2002 that may have caused increases
or decreases in overpayments; and
• types of overpayments that are inherent to the design of the SSI program
and cannot be changed without legislation.
THE SOCIAL SECURITY ADMINISTRATION’S
ADMINISTRATIVE FINALITY RULES
Planned Start
Carry Over
Objective
To assess the impact of SSA’s administrative finality rules on Supplemental
Security Income (SSI) and Old-Age, Survivors and Disability Insurance (OASDI)
overpayments.
Background
Once SSA makes determinations regarding SSI or OASDI eligibility or payment
amounts, those determinations may be reopened and revised under certain conditions.
SSA regulations allow a determination to be reopened and revised under the rules
of administrative finality
• within 1 year of the date of notice of an initial determination for
any reason;
• after 1 year, but within 2 years for SSI or 4 years for OASDI determinations,
upon a finding of “good cause”; or
• at any time, if the determination or decision was procured by fraud
or “similar fault.”
SSA does not consider SSI or OASDI payments issued for any months before the
administrative finality time limits to be overpayments, and it does not pursue
recovery.
THE SOCIAL SECURITY ADMINISTRATION’S CLEAN UP OF TITLE II DISABILITY INSURANCE
BENEFIT CASES WITH WORKERS’ COMPENSATION OFFSET
Planned Start
Carry Over
Objective
To report the dollar effect of errors that continue to exist in the first clean
up of the Title II disability workload involving a workers’ compensation
offset.
Background
SSA conducted its first clean up between July 1999 and September 2001. SSA’s
review consisted of 61,581 Title II Disability Insurance cases where offset
began during the period 1966 to 1993 and were in current pay status as of November
1998. However, SSA did not track the dollar errors found during the clean up.
SSA’s Office of Quality Assurance evaluated the accuracy of the first
clean up process and estimated the amount of payments corrected during the clean
up. To determine the appropriateness of SSA’s clean-up decisions, the
Office of Quality Assurance tested a sample of 239 cases that were determined
during the clean up to have no payment error or contain either an under- or
overpayment.
THE SOCIAL SECURITY ADMINISTRATION’S CONTROLS OVER THE TITLE XVI WAIVER
PROCESS
Planned Start
Carry Over
Objective
To (1) evaluate SSA’s controls over the Title XVI waiver process to assess
the appropriateness of overpayment waiver decisions of $500 or less and (2)
determine whether overpayment waivers exceeding $500 were developed in accordance
with the provisions defined in Title XVI of the Social Security Act.
Background
Title XVI of the Social Security Act established the Supplemental Security Income
(SSI) program in 1972, effective January 1, 1974, to provide income to financially
needy individuals who are aged, blind or disabled. SSA relies heavily on beneficiary
self-disclosure of all financial resources as well as computer matching from
other Federal and State agencies. Since financial resources may vary from month
to month, SSI payments are error prone and may result in overpayments.
SSA grants SSI overpayment waivers under certain situations when the recipient
is not at fault for the overpayment. Recovery of an overpayment may be waived
if such recovery would be against equity and good conscience, impedes effective
and efficient administration because of the small amount involved, or defeats
the purpose of the SSI program. In December 1993, SSA changed the administrative
waiver tolerance from $100 to $500.
Starting September 2001, SSA implemented the Modernized Supplemental Security
Income Claims System for complete processing and determination of all SSI overpayments
using direct Supplemental Security Record (SSR) update. Implementation of the
new computer system provided a significant change designed to simplify and improve
processing of SSI overpayments.
Waived SSI overpayments decreased or maintained a consistent level from FY 1975
through FY 1993. Since FY 1993, waived SSI overpayments have increased dramatically.
In FY 1993, waivers of SSI overpayments totaled $2 million for one segment of
the SSR. By FY 2002, this amount had steadily increased to $14.3 million, and
FY 2003 totals are expected to exceed FY 2002 based on 10 months of available
FY 2003 data.
THE SOCIAL SECURITY ADMINISTRATION’S
CONTROLS OVER WITHHOLDING TAXES AND SUSPENDING BENEFITS TO CERTAIN FOREIGN BENEFICIARIES
Planned Start
Carry Over
Objective
To determine how effectively SSA deducts taxes and suspends payment to certain
foreign beneficiaries living outside the United States.
Background
SSA pays nearly $2 billion a year to approximately 500,000 beneficiaries living
outside the United States. Under 1983 amendments to the Social Security Act,
SSA must, with certain exceptions, withhold taxes from up to 85 percent of the
monthly Social Security benefit of noncitizens living outside the country. Since
December 1983, SSA has mainly deducted this tax from the benefits of noncitizens
who are not legal U.S. residents or not living in 1 of the 11 countries that
have tax treaties with the United States.
Furthermore, alien nonpayment provisions of the Social Security Act require
that SSA stop the payment of benefits to noncitizens when they leave the United
States for 6 consecutive months or longer. Benefits stop in the 7th month following
their departure. In addition, payments cannot be paid to beneficiaries residing
in certain countries considered hostile to the United States.
THE SOCIAL SECURITY ADMINISTRATION’S
DETERMINATION OF A HIGH AVERAGE CURRENT EARNINGS FOR DISABILITY INSURANCE BENEFITS
INVOLVING WORKERS’ COMPENSATION
Planned Start
Carry Over
Objective
To determine whether workers’ compensation (WC) payments deemed not offsetable
because of a high Average Current Earnings (ACE) are accurately calculated and
the impact on the trust fund if Title II Disability Insurance (DI) benefits
are incorrectly paid.
Background
The Social Security Act requires that the combined benefits from DI and WC be
reduced (offset) so the combined benefits do not exceed the larger of (1) 80
percent of the worker’s pre-disability earnings or (2) the total family
benefits allowable under Social Security before an offset. Therefore, if the
worker receives both DI and WC but the total benefits do not exceed one of the
two limits, no offset will occur in DI benefits. This is referred to as a high
ACE.
SSA will determine whether no offset is applicable based on WC either alleged
or verified. If beneficiaries allege an amount that will not result in an offset,
they are held responsible if such benefits change or are inaccurate and subsequently
result in an overpayment.
In December 1997, the Office of the Actuary reported over 168,000 DI cases with
a high ACE. By December 2000, the total number had grown to over 197,000 DI
cases with a high ACE.
TITLE XVI OVERPAYMENT WRITE-OFFS WHEN BENEFICIARIES ARE UNWILLING OR UNABLE
TO PAY, CANNOT BE LOCATED OR ARE OUT OF THE COUNTRY
Planned Start
Carry Over
Objective
To (1) evaluate SSA’s controls over suspending collection efforts on Title
XVI overpayments because recipients are unable or unwilling to pay, cannot be
located, or are out of the country and (2) determine whether the decisions to
suspend collection efforts on these overpayments were in accordance with SSA’s
policies and procedures.
Background
Title XVI of the Social Security Act established the Supplemental Security Income
(SSI) program in 1972, effective January 1, 1974, to provide income to financially
needy individuals who are aged, blind or disabled. SSA relies heavily on beneficiary
self-disclosure of all financial resources as well as computer matching from
other Federal and State agencies to determine benefits. Since financial resources
may vary from month to month, SSI payments are error prone and may result in
overpayments.
SSA can terminate collection efforts on SSI overpayments in certain situations.
Specifically, collection efforts can be terminated when a recipient is not in
current payment status and previous collection efforts have determined the individual
is unable or unwilling to pay, cannot be located, or is out the country.
Budget and Performance
Integration
Our work has demonstrated that SSA is generally committed to the production
and use of reliable performance and financial management data, but some improvements
would further enhance SSA’s ability to produce accurate and actionable
management information.
This area encompasses SSA’s efforts to provide timely, useful and reliable
data to assist internal and external decisionmakers in effectively managing
Agency programs, as well as both evaluating performance and ensuring the validity
and reliability of performance, budgeting, and financial data.
To effectively meet its mission, manage its programs, and report on its performance,
SSA needs sound performance and financial data. Congress, the general public,
and other interested parties also need sound and credible data to monitor and
evaluate SSA’s performance. The President’s Management Agenda has
placed great emphasis on the management and performance integration of Federal
agencies. SSA has demonstrated a strong commitment to the Government Performance
and Results Act of 1993 (Public Law No. 103-62) by developing strategic plans,
annual performance plans and annual performance reports. However, we believe
SSA can further strengthen its use of performance information by fully documenting
the methods and data used to measure performance and by improving its data sources.
Our audits of 18 performance measures in FY 2003 found the data for 13 of the
measures reviewed were reliable. We concluded that the data for five of the
measures was found not reliable. Although the majority of performance measures
were determined to be reliable, our audits found that SSA had inadequate documentation
for 5 of its 18 performance measures regarding the methods used to measure its
performance. Considering the critical role of the underlying data in all of
SSA’s performance, financial, and data-sharing activities, it is crucial
that the Agency have clear processes in place to ensure the reliability and
integrity of its data.
We have previously noted that SSA needs to better link costs with performance.
In its FY 2003 Annual Performance Plan (APP), SSA acknowledged that costs are
specifically aligned with outcome measures for only a few activities. SSA needs
to further develop a cost accounting system to better link costs with performance.
Since most goals are not aligned by budget account, the resource, human capital,
and technology necessary to achieve many performance goals are not adequately
described.
In addition to performance audits, we perform and monitor audits of SSA’s
financial statements and other financial-related audits of SSA’s operations.
Our work includes comprehensive technical and administrative oversight of the
annual audit of SSA’s financial statements, performed by an independent
public accountant. We also perform reviews of the quality of single audits conducted
by State auditors and public accounting firms. Additionally, we conduct administrative
cost audits of State DDSs, which assist SSA with its disability workload. This
body of work helps assess the validity and reliability of the financial data
SSA relies on to manage its programs and meet its mission.
The integrity of SSA’s programs and those that rely on information from
SSA depend on the reliability and quality of the Agency’s data. External
data and data exchanges are critical to SSA’s programs and are the focus
of many of our audits. Therefore, it is imperative that SSA’s data be
reliable.
Considering the critical role of the underlying data in all of SSA’s performance,
financial, and data-sharing activities, it is crucial that the Agency have clear
processes in place to ensure the reliability and integrity of its data.
In FY 2004, we plan to complete 24 reviews and begin 18 reviews in this area.
We Plan to Complete the
Following Reviews in FY 2004
Administrative Cost Audits of State Disability Determinations Services: 14
reviews to be conducted in Colorado, the District of Columbia, Georgia, Massachusetts,
Michigan, Minnesota, Montana, Nevada, New Mexico, Ohio, South Carolina, South
Dakota, Texas, and Wyoming
Fiscal Year 2003 Financial Statement Audit Oversight
Fiscal Year 2003 Inspector General Statement on the Social Security Administration’s
Major Management Challenges
Follow up on Potential Indirect Cost Rate Increases at Connecticut Disability
Determination Services
Indirect Costs Claimed by the Arizona Disability Determination Services
Indirect Costs Claimed by the New York Disability Determination Services
Indirect Costs Claimed by the West Virginia Disability Determination Services
Internal Control Review of the Award Process at the Office of Acquisition
and Grants
Performance Audit of the Social Security Administration’s Main Complex
Guard Contract
Performance Measure Reviews: Audits of the Social Security Administration’s
Performance Data
Puerto Rico Disability Determination Program Indirect Costs
Summary of State Disability Determination Services Administrative Cost Audits
Completed in Fiscal Years 2000 Through 2003
We Plan to Begin the Following Reviews in FY 2004
Administrative Cost Audits: 10 reviews to be conducted in Arkansas, California,
Delaware, Iowa, Maine, Maryland, New Hampshire, North Carolina, Pennsylvania,
and Virginia
Costs Incurred by Maximus, Inc., on Contract Number 0600-00-60020
Fiscal Year 2004 Financial Statement Audit Oversight
Fiscal Year 2004 Inspector General Statement
Indirect Costs Claimed by the Louisiana Disability Determination Services
Indirect Costs Claimed by the New Jersey Disability Determination Services
Indirect Costs Claimed by the Oregon Disability Determination Services
Review of the Social Security Administration’s Ticket to Work Program—Systems
Development
Social Security Administration's Fiscal Year 2005 Annual Performance Plan
ADMINISTRATIVE COSTS CLAIMED
BY STATE DISABILITY DETERMINATION SERVICES
We will be conducting reviews in the following State Disability Determination
Services (DDS)
Colorado
District of Columbia
Georgia
Massachusetts
Michigan
Minnesota
Montana
Nevada
New Mexico
Ohio
South Carolina
South Dakota
Texas
Wyoming
Objective
The objectives of the DDS administrative cost audits are to
1. evaluate the DDS’ internal controls over the accounting and reporting
of administrative costs,
2. determine whether costs claimed by the DDS were allowable and funds were
properly drawn, and
3. assess the general security controls environment.
Background
The Disability Insurance (DI) program was established in 1956 under Title II
of the Social Security Act. The program is designed to provide benefits to wage
earners and their families in the event the wage earner becomes disabled. In
1972, the Congress enacted the Supplemental Security Income (SSI) program (Public
Law 92-603). The SSI program provides a nationally uniform program of income
to financially needy individuals who are aged, blind or disabled. Disability
determinations under both DI and SSI are performed by a DDS in each State in
accordance with Federal regulations. In carrying out its obligation, each DDS
is responsible for determining the claimants’ disabilities and ensuring
adequate evidence is available to support its determinations.
FISCAL YEAR 2003 FINANCIAL STATEMENT AUDIT OVERSIGHT
Planned Start
Carry Over
Objective
To fulfill our responsibilities under the Chief Financial Officers (CFO) Act
and related legislation for ensuring the quality of the audit work performed,
we will monitor PricewaterhouseCoopers LLP’s (PwC) audit of SSA’s
FY 2003 financial statements.
Background
The CFO Act of 1990 requires that agencies annually prepare audited financial
statements. Each agency’s Inspector General is responsible for auditing
these financial statements to determine whether they provide a fair representation
of the entity’s financial position. This annual audit also includes an
assessment of the Agency’s internal control structure and its compliance
with laws and regulations. PwC will perform the audit work to support this opinion
of SSA’s financial statement. We will monitor the contract to ensure reliability
of PwC’s work to meet our statutory requirements for auditing the Agency’s
financial statements.
FISCAL YEAR 2003 INSPECTOR GENERAL STATEMENT ON THE SOCIAL SECURITY ADMINISTRATION’S
MAJOR MANAGEMENT CHALLENGES
Planned Start
Carry Over
Objective
To summarize and assess SSA’s progress in addressing the most serious
management and performance challenges as identified by the OIG.
Background
In November 2000, the President signed the Reports Consolidation Act of 2000,
which requires that Inspectors General provide a summary and assessment of the
most serious management and performance challenges facing the agencies and the
agencies’ progress in addressing these challenges.
The OIG has identified the following management challenges.
• Social Security Number Integrity and Protection
• Management of the Disability Process
• Improper Payments
• Budget and Performance Integration
• Critical Infrastructure Protection and Systems Security
• Service Delivery
We will summarize the challenges and actions SSA has taken to address them.
FOLLOW UP ON POTENTIAL INDIRECT COST RATE INCREASES AT CONNECTICUT DISABILITY
DETERMINATION SERVICES
Planned Start
Carry Over
Objective
To respond to the Regional Commissioner’s request to review the Connecticut
Disability Determination Services (DDS) Cost Allocation Plan.
Background
The Disability Insurance (DI) program provides benefits to disabled wage earners
and their families in the event the family wage earner becomes disabled. The
Supplemental Security Income (SSI) program provides a nationally uniform program
of income and disability coverage to financially needy individuals who are aged,
blind, or disabled.
SSA is primarily responsible for implementing the general policies for developing
DI and SSI disability claims. Disability determinations under both DI and SSI
are performed by an agency in each State according to SSA regulations. Each
State agency determines claimants’ disabilities and ensures adequate supporting
evidence is available.
SSA reimburses the States for indirect costs associated with supporting the
DDSs. State agencies determining disabilities for SSA are subject to Office
of Management and Budget (OMB) Circular A-87, Cost Principles for State, Local
and Indian Tribal Governments. OMB Circular A-87 establishes basic guidelines
for direct and indirect costs, setting the criteria as to whether a cost is
allowable, reasonable, and allocable. It further defines indirect costs and
states that indirect cost pools should be distributed to the benefited cost
objectives on bases that will produce an equitable result in consideration of
the relative benefits derived.
The Boston Regional Office asked the OIG to conduct a follow-up audit of the
Connecticut DDS’ indirect costs.
INDIRECT COSTS CLAIMED
BY THE ARIZONA DISABILITY DETERMINATION SERVICES
Planned Start
Carry Over
Objective
To review the State Disability Determination Services’ indirect costs
to determine whether the costs claimed on the State Agency Report of Obligations
for SSA Disability Programs, Form SSA-4513, are allowable and properly allocated.
Background
The Disability Insurance program was established in 1956 under Title II of the
Social Security Act. Title II is designed to provide benefits to wage earners
and their families in the event the wage earner becomes disabled. In 1972, Congress
enacted the Supplemental Security Income program (Public Law 92-603) under Title
XVI of the Social Security Act. Title XVI provides a nationally uniform program
of income to financially needy individuals who are aged, blind, or disabled.
Disability determinations under the Disability Insurance and Supplemental Security
Income programs are performed by an agency in each State in accordance with
Federal regulations. In carrying out its obligations, each State agency is responsible
for determining the claimants’ disabilities and ensuring adequate evidence
is available to support its determinations.
INDIRECT COSTS CLAIMED BY THE NEW YORK DISABILITY DETERMINATION SERVICES
Planned Start
Carry Over
Objective
To determine whether the indirect cost portion of the New York Disability Determination
Services’ administrative costs claimed for the period October 1, 1999
through September 30, 2002 were allowable.
Background
The Disability Insurance (DI) program provides benefits to disabled wage earners
and their families in the event the family wage earner becomes disabled. The
Supplemental Security Income (SSI) program provides a nationally uniform program
of income and disability coverage to financially needy individuals who are aged,
blind, or disabled.
SSA is primarily responsible for implementing the general policies for developing
DI and SSI disability claims. Disability determinations under both DI and SSI
are performed by an agency in each State according to SSA regulations. Each
State Agency determines claimants’ disabilities and ensures adequate supporting
evidence is available.
SSA reimburses the States for indirect costs associated with supporting the
DDSs. A cognizant Federal department or agency approves a Central Office Cost
Allocation Plan used to accumulate indirect costs for reimbursement for Federal
agencies using State services. State agencies determining disabilities for SSA
are subject to Office of Management and Budget (OMB) Circular A-87, Cost Principles
for State, Local and Indian Tribal Governments. OMB Circular A-87 establishes
basic guidelines for direct and indirect costs, setting the criteria as to whether
a cost is allowable, reasonable, and allocable. It further defines indirect
costs and states that indirect cost pools should be distributed to the benefited
cost objectives on bases that will produce an equitable result in consideration
of the relative benefits derived.
INDIRECT COSTS CLAIMED BY THE WEST VIRGINIA DISABILITY DETERMINATION SERVICES
Planned Start
Carry Over
Objective
To determine whether indirect costs claimed by the West Virginia Disability
Determination Services (DDS) on the State Agency Report of Obligations for Social
Security Administration Disability Programs (Form SSA-4513) during Federal FYs
2000 through 2002, were allowable.
Background
State DDSs perform disability determinations under SSA’s Disability Insurance
and Supplemental Security Income programs. SSA pays 100 percent of the allowable
expenditures incurred by DDSs in making disability determinations, including
indirect costs. To be allowable, indirect costs must meet guidelines in Office
of Management and Budget Circular A-87, Cost Principles for State, Local and
Indian Tribal Governments.
Because DDSs receive Federal funding, they are subject to periodic independent
financial reviews under the Single Audit Act Amendments of 1996. Three single
audits reported an inability to determine that indirect costs claimed by the
West Virginia DDS in FYs 2000 through 2002 were allowable. The independent auditors
reported that the wrong indirect cost rate was used, which the DDS subsequently
corrected. The independent auditors also reported that the West Virginia DDS
did not use an accounting code available within the State’s accounting
system to identify indirect cost items. As a result, the independent auditors
could not determine whether indirect costs were also charged as direct costs.
INTERNAL CONTROL REVIEW OF THE AWARD PROCESS AT THE OFFICE OF ACQUISITION AND
GRANTS
Planned Start
Carry Over
Objective
To assess the adequacy of the internal controls over the award process at the
Office of Acquisition and Grants to provide reasonable assurance contracts are
properly awarded.
Background
The Office of Acquisition and Grants’ mission is to direct the business
management aspects of SSA’s acquisition and grants management program
by awarding and administering contracts, preparing purchase orders or other
contractual instruments, and awarding and administering grants. The Office of
Acquisition and Grants also develops and implements policies, procedures and
directives for all acquisition and grants activities SSA-wide.
For FY 2001, the Office of Acquisition and Grants awarded $460 million in new
contracts. SSA contract values are approximately $2 billion.
PERFORMANCE AUDIT OF THE SOCIAL SECURITY ADMINISTRATION’S MAIN COMPLEX
GUARD CONTRACT
Planned Start
Carry Over
Objective
To ensure SSA is properly monitoring this contract and the contractor is complying
with the contract terms and applicable regulations.
Background
Recent media attention and world events have spurred public and congressional
belief that protection of the Federal infrastructure is a high priority. Accordingly,
the OIG has decided to prioritize this audit work regarding physical security
of SSA’s main complex. Our audit will focus on reviewing the contractor’s
ability to meet, and its compliance with, contract requirements, including preparedness,
skill levels/qualifications, training, proper equipment, firearms controls,
and other contract areas we deem necessary to ensure the Agency’s facilities
are adequately protected. We will determine whether the contractor is meeting
its responsibilities to protect the people and property at SSA’s main
complex, as defined in the contract.
PERFORMANCE MEASURE REVIEWS: AUDITS OF THE SOCIAL SECURITY ADMINISTRATION’S
PERFORMANCE DATA
Planned Start
1st Quarter FY 2004
Objective
To determine the reliability of the performance data SSA uses to measure selected
performance indicators.
Background
Congress passed the Government Performance and Results Act (GPRA) of 1993 to
bring greater accountability to Federal agencies. GPRA establishes a system
for strategic and annual performance planning and reporting to set goals for
program performance and measure results. GPRA requires that each agency create
(1) 5-year strategic plans, (2) annual performance plans, and (3) annual performance
reports. SSA released its latest strategic plan, which covers FYs 2003-2008,
in 2003,. The Agency’s latest annual performance plan was released in
May 2003. It presents the annual performance indicators and goals for FY 2004.
SSA established 4 strategic goals in its strategic plan and 46 GPRA performance
measures, with an additional 8 Program Assessment Rating Tool performance measures
in its latest annual performance plan.
The success of SSA’s performance measurement initiatives hinges on the
quality of the data used to measure and report on program performance. Consequently,
it is important that SSA have assurance that the data reported are reliable
and meaningful and that its performance report will be useful to Congress and
agency management.
As a result, the SSA/OIG will award a contract to test SSA’s performance
data and the systems from which it is generated to gain assurance that the data
reported in the performance plan are reliable and meaningful. After award of
the contract, the OIG will monitor the contractor to ensure the reliability
of the contractor's work.
PUERTO RICO DISABILITY DETERMINATION
PROGRAM INDIRECT COSTS
Planned Start
Carry Over
Objective
Our objectives are to
1. determine whether indirect costs charged to the Puerto Rico Disability Determination
Program (DDP) for FY 2002 were allowable and allocable;
2. identify any non-recurring indirect costs from FY 2002 that should not be
considered in the indirect cost rate negotiations for FYs 2003 and 2004; and
3. identify and review the lump-sum accumulated leave payments for DDP retirees
in FY 2002.
Background
SSA reimburses the Puerto Rico Department of Family—DDP’s parent
agency—for indirect costs associated with providing support to the DDP.
The Department of Health & Human Services, as the cognizant agency, has
negotiated the indirect cost rate for all federally funded programs under the
Puerto Rico Department of Family.
State agencies determining disabilities for SSA are subject to Office of Management
and Budget (OMB) Circular A-87, Cost Principles for State, Local and Indian
Tribal Governments. OMB Circular A-87 establishes basic guidelines for both
direct and indirect costs, setting the criteria as to whether a cost is allowable,
reasonable, and allocable. It further defines indirect costs and states that
indirect cost pools should be distributed to the benefited cost objectives on
bases that will produce an equitable result in consideration of the relative
benefits derived.
SUMMARY OF STATE DISABILITY DETERMINATION SERVICES ADMINISTRATIVE COST AUDITS
COMPLETED IN FISCAL YEARS 2000 THROUGH 2003
Planned Start
Carry Over
Objective
To summarize common findings and recommendations reported in nine Disability
Determination Services’ (DDS) administrative cost audits and identify
significant issues related to oversight of the administrative costs in DDS offices.
Background
In FYs 2000 through 2003, we completed nine DDS audits. The objectives of these
audits were to determine whether (1) expenditures and obligations were properly
authorized and disbursed; (2) Federal funds drawn agreed with total expenditures;
and (3) internal controls over the accounting and reporting of administrative
costs were adequate.
Critical Infrastructure
Protection and Systems Security
The information SSA needs to conduct its mission is one of its most valuable
assets.
The information SSA needs to conduct its mission is one of its most valuable
assets. The Agency is depending on technology to meet the challenges of increasing
workloads with fewer resources. A physically and technologically secure Agency
information infrastructure is a fundamental requirement. Growth in computer
interconnectivity brings a heightened risk of disrupting or sabotaging critical
operations, reading or copying sensitive data, and tampering with critical processes.
Those who wish to disrupt or sabotage critical operations have more tools and
opportunities than ever.
SSA has been given responsibility to protect sensitive information for virtually
every American. This information includes earnings data the Agency uses to post
earnings for 266 million wage items and medical information for millions of
claimants filing for disability benefits. Strong systems security and controls
are essential to protecting SSA’s critical information infrastructure.
Although no significant event has occurred to date, the level of risk is so
great that should something occur, it could have national security implications.
Since 1997, SSA has had an internal controls reportable condition concerning
its protection of information. The reportable condition came about because of
weaknesses in the following areas.
• Technical Security Configuration Standards
• Security Monitoring Enforcement
• Access Control
• Physical Security and Secuirty Policy for Disability Determination Services
Sites
• Suitability
• Continutiy of Operations
The most important of the issues listed above is access control. As long as
access control to SSA’s systems is not fully resolved, the reportable
condition will remain. The resolution of this reportable condition remains a
priority for the Agency. To remedy this issue, SSA needs to perform periodic
reviews of everyone who has access to production data and assign data ownership
or responsibility.
SSA addresses critical information infrastructure and systems security in a
variety of ways. The Critical Infrastructure Protection work group, created
in FY 2000, continually works toward compliance with Presidential Decision Directive
63. Presidential Decision Directive 63 and other significant legislation, requires
Federal agencies to identify and effectively protect their critical systems
and the information they hold. SSA has several other components throughout the
organization that handle systems security including the newly created Office
of Information Technology Security Policy within the Office of the Chief Information
Officer. SSA also routinely releases security advisories to its employees and
has hired outside contractors to provide expertise in this area.
In FY 2004, we plan to complete six reviews and begin one review in this area.
We Plan to Complete the Following Reviews in FY 2004
Controls over Badge Entry to Social Security Administration Facilities
Employee Potential System Security Violations
Fiscal Year 2004 Federal Information Security Management Act Audit
Impact on Network Security of the Social Security Administration’s Conversion
to Windows 2000
President’s Council on Integrity and Efficiency Phase IV
Project Matrix Step 2—Review of Physical Security for Critical Assets
We Plan to Begin the Following Review in FY 2004
Follow up of Disability Determination Services Data Security
CONTROLS OVER BADGE ENTRY
TO SOCIAL SECURITY ADMINISTRATION FACILITIES
Planned Start
Carry Over
Objective
To determine whether SSA effectively prevents unauthorized physical access to
its facilities. We intend to examine SSA’s current and planned badge-based
personnel access systems to determine whether they grant access to only properly
authorized individuals and have the flexibility required to easily change or
revoke access authorizations.
Background
SSA provides essential services to a large segment of the American public, many
of whom depend on those services to fill basic needs. The public at large also
depends on the Agency to protect the large volume of personal information it
uses to provide these services. If it allows access to its facilities by unauthorized
individuals, SSA risks either intentional or inadvertent disruption of its operations
and compromise of the private information entrusted to it. These risks are compounded
by the possible loss of public confidence that could accompany serious incidents.
SSA’s central operations are conducted in its Headquarters complex in
Baltimore, Maryland. Access to buildings at its complex is controlled by the
use of identification badges for authorized employees, contractors, and visitors.
We intend to review the effectiveness of the Agency’s current and planned
identification badge procedures to ensure that access is limited to only those
individuals with valid, current authorization.
EMPLOYEE POTENTIAL SYSTEM SECURITY VIOLATIONS
Planned Start
Carry Over
Objective
To review SSA’s policies and procedures for monitoring, resolving and
tracking employee potential system security violations in a timely, comprehensive,
and consistent manner.
Background
SSA has been entrusted with some of the Nation’s most sensitive data,
such as SSNs and earnings records. The public expects that SSA employees protect
this information to the best of their ability in accordance with industry standards
and Government regulations. To ensure this, SSA needs to monitor its employees
and properly address instances where employees violate information security
and privacy practices.
In a recent case involving two SSA employees charged with browsing tax records,
a U.S. Circuit Court judge raised a concern that SSA policies for sanctionable
violations may not be equitably applied. The judge’s comments were based
on his review of 160 other employee cases provided by the defense attorneys
in support of their motion to dismiss the criminal charges based on selective
prosecution. The judge expressed concern that some individuals in the 160 cases
were not treated the same as the individuals in this case, who were being prosecuted.
The judge advised the Assistant U.S. Attorney and the defense attorney to consider
a pre-trial action request rather than going to trial.
FISCAL YEAR 2004 FEDERAL INFORMATION SECURITY MANAGEMENT ACT AUDIT
Planned Start
3rd Quarter FY 2004
Objective
To determine whether SSA is in compliance with the Federal Information Security
Management Act for FY 2004.
Background
The Federal Information Security Management Act replaces the Government Information
Security Reform Act. It has most of the same requirements including an Agency-wide
information security program and annual reviews of the security program performed
by the Agency and the Office of the Inspector General, separately. The Office
of Management and Budget annually issues questions to be answered concerning
agencies’ compliance with the Federal Information Security Management
Act.
IMPACT ON NETWORK SECURITY OF THE SOCIAL SECURITY ADMINISTRATION’S CONVERSION
TO WINDOWS 2000
Planned Start
Carry Over
Objective
To determine the effect on network security of SSA’s converting from a
Windows NT operating system to Windows 2000.
Background
The computer operating systems in SSA’s data processing environment have
built-in security features that protect the sensitive information processed
and transmitted by the systems. In converting from its current Windows NT network
operating system to Windows 2000, SSA can maintain, diminish or enhance network
security. The effect of the conversion on network security depends on which
features are implemented and how they are used.
Both internal and external vulnerabilities may be introduced when some of the
security features are weakened to allow current applications to run. As a result,
the integrity, completeness, and accuracy of information SSA uses could be compromised.
In addition, SSA is rapidly expanding the number and type of services it offers
the public through E-Government programs to comply with the President’s
Management Iinitiative of expanding E-Government. The integrity and confidentiality
of sensitive data transmitted or stored to operate these programs depends on
the network security configuration of the Windows 2000 operating system environment.
This will impact virtually all of SSA’s business functions including the
management of benefits and access to SSNs.
PRESIDENT’S COUNCIL ON INTEGRITY AND EFFICIENCY PHASE IV
Planned Start
1st Quarter FY 2004
Objective
To review SSA’s implementation of policies and procedures protecting its
physical assets.
Background
This is part of a President’s Council on Integrity and Efficiency Government-wide
review of compliance with Presidential Decision Directive 63. Phase I reviewed
development of policies and procedures to protect the agencies’ cyber-based
assets. Phase II reviewed the adequacy of the agencies’ implementation
activities for protecting its critical cyber-based infrastructures. Phase III
reviewed development of policies and procedures to protect the agencies’
physical assets. Phase IV will review implementation of policies and procedures
protecting the agencies’ physical assets.
PROJECT MATRIX STEP 2—REVIEW OF PHYSICAL SECURITY FOR CRITICAL ASSETS
Planned Start
Carry Over
Objective
To oversee the Critical Infrastructure Assurance Office’s (CIAO) identification
of SSA’s interdependencies with the public and the private sector for
the last two critical assets to be reviewed, Headquarters and Office of Central
Operations/Office of International Operations/Metro West.
Background
In response to Presidential Decision Directive 63, the National Critical Infrastructure
Assurance Office established the Project Matrix to coordinate analyses of the
Government’s dependencies on critical infrastructure. Project Matrix is
designed to assist select Federal agencies and Departments in prioritizing their
physical and cyber-assets for security enhancements.
Step One of the matrix was to identify relevant Presidential Decision Directive
63 assets. Step Two of the matrix is to develop and analyze the business processes
associated with the assets identified in Step One to highlight significant public
and private sector interdependencies and points of failure.
Service Delivery
Given the complexity of the Agency’s programs, the billions of dollars
in payments at stake, and the millions of citizens who rely on SSA, we must
ensure that quality, timely, and appropriate services are consistently provided
to the public-at-large.
The Agency’s goal of “service” encompasses traditional and
electronic services provided to applicants for benefits, beneficiaries and the
general public. It also includes services to and from States, other agencies,
third parties, employers, and other organizations including financial institutions
and medical providers. This goal supports the delivery of “citizen-centered”
services and use of “E-Government,” and therefore affords SSA opportunities
to advance these levels of service. Given the complexity of the Agency’s
programs, the billions of dollars in payments at stake, and the millions of
citizens who rely on SSA, the Agency is challenged to provide quality, timely,
and appropriate services consistently to the public-at-large. E-Government,
Human Capital, and the representative payee process pose significant challenges
that impact service delivery.
E-Government Challenges
The PMA also calls for improved service delivery through the use of E-Government
in creating more cost-effective and efficient ways to provide service to citizens.
The increased use of E-Government will be essential to help address the Agency’s
expected future loss of institutional knowledge accompanied by the increased
services expected with the aging of the baby-boom generation. Future service
delivery challenges include providing electronic services over the Internet
and telephone, 24 hours a day, 7 days a week. It will be the norm for business
transactions to be processed electronically.
By 2005, SSA is expected to make 60 percent of its customer-initiated services
available through automated telephone services or the Internet. The Agency recently
began allowing the public to file DI claims through the Internet to help achieve
its service delivery goals. SSA expects to begin a nation-wide roll-out of its
Electronic Disability System in 2004. There are always risks involved in conducting
electronic commerce, despite the Agency’s efforts to identify and mitigate
them. SSA will have to keep privacy and security concerns at the forefront of
its planning efforts.
Representative Payee Challenges
A specific challenge in this area is maintaining the integrity of the representative
payee process. When SSA determines a beneficiary cannot manage his/her benefits,
SSA selects a representative payee, who must use the payments for the beneficiary’s
benefit. There are about 5.3 million representative payees who manage about
$44 billion in benefit payments for 6.7 million beneficiaries. While representative
payees provide a valuable service for beneficiaries, SSA must provide appropriate
safeguards to ensure they meet their responsibilities to the beneficiaries they
serve.
Since FY 2001, we have completed numerous audits of representative payees. Our
audits identified
• deficiencies with the financial management of, and accounting for, benefit
receipts and disbursements;
• vulnerabilities in the safeguarding of beneficiary payments;
• poor monitoring and reporting to SSA of changes in beneficiary circumstances;
• inappropriate handling of beneficiary-conserved funds; and
• improper charging of fees.
Human Capital Challenges
Many agencies, including SSA, share the challenge to address human capital shortfalls.
The critical loss of institutional skills and knowledge, combined with greatly
increased workloads at a time when the baby-boom generation will require its
services, must be addressed by succession planning, strong recruitment efforts,
and the effective use of technology as previously discussed.
In January 2001, GAO added strategic human capital management to its list of
high-risk Federal programs and operations. By 2010, workloads are anticipated
to increase to unprecedented volumes. Along with the workload increase, the
incredible pace of technological change will have a profound impact on both
the public’s expectations and SSA’s ability to meet those expectations.
At current staffing levels, SSA finds it difficult to maintain an acceptable
level of service, especially in its most complicated workloads. After downsizing
and curtailing investments in human capital (people), the Government is facing
a major challenge to meet the current and emerging needs of the Nation’s
citizens.
In FY 2004, we plan to complete 30 reviews and begin 22 reviews in this area.
We Plan to Complete the Following Reviews in FY 2004
Assessing the Effectiveness of the Social Security Administration’s New
Software Testing
Audits of Representative Payees for the Social Security Administration—Seven
Reviews to be Conducted
Best Practices for Electronic Records Authentication
Conserved Funds for Deceased Beneficiaries with Non-related Representative Payees
Controls for Concurrently Entitled Social Security Administration Beneficiaries
with Representative Payees
Controls over the Social Security Administration’s Processing Center Action
Control System
Efficiency of the Social Security Administration’s Accelerated Electronic
Disability Scanning Process
Evaluation of the Social Security Administration’s Accelerated Electronic
Disability System—Fifth Assessment
Inventory Review at the National Records Center
Management Advisory Report—Fiscal Year 2003 Quick Response Acitivities
Summary Report
Management of Allegations by the Social Security Administration’s Office
of Systems
Office of Investigations Assistance—Reviews of Representative Payee Operations
Operations of the Office of Hearings and Appeals Megasite
Suitability of Individuals Serving as Representative Payees
Summary of Fiscal Year 2002 Office of the Inspector General Audits of Representative
Payees
Summary of Fiscal Year 2003 Office of the Inspector General Audits of Representative
Payees
The Social Security Administration’s Collection of Title II Overpayments
Made to Representative Payees After the Beneficiary’s Death
The Social Security Administration’s Efforts to Address Future Workforce
Needs
The Social Security Administration’s Procedures for Addressing Employee-related
Alegations: Five Reviews to be Conducted
The Social Security Administration’s Procedures to Identify Incarcerated
Representative Payees
The Social Security Administration’s Representative Payee Selection Process
We Plan to Begin the Following
Reviews in FY 2004Audits of Representative Payees for the Social Security
Administration—We plan
to begin six reviews in this area
Convicted Felons Serving as Representative Payees
Effectiveness of the Social Security Administration’s Supplemental Security
Income Referral Process
Follow up on Waivers Granted for Title II Overpayments
Internal Controls over Software Developed by Components Other Than the Office
of Systems
Parents Receiving Benefits for Children in Foster Care
Planning, Designing and Validating Web-based Applications
The Social Security Administration’s Office of Systems’ Efforts
to Address Its Future Workforce Needs
The Social Security Administration’s Procedures for Addressing Employee-Related
Allegations—We plan to begin five reviews in this area
The Social Security Administration’s Project to Improve its Work Measurement
Systems
The Social Security Adminitration's Workers' Compensation Data Match with the
State of Texas
Title II Beneficiaries with Overpayment Write-offs
Unofficial Representative Payees Receiving Benefit Payments Belonging to Beneficiaries
ASSESSING THE EFFECTIVENESS
OF THE SOCIAL SECURITY ADMINISTRATION’S NEW SOFTWARE TESTING
Planned Start
1st Quarter FY 2004
Objective
To determine whether SSA is sufficiently validating and testing its software
before placing these projects into production.
Background
In preliminary tests, we found several instances where SSA has released software
to its end users without sufficient validation and testing, including the following.
• The Disability Control File was released without validation. End users
found the software had about 50 errors and numerous inefficiencies. End users
also found the software’s functionality was not as expected.
• There were 5,000 duplicate Accelerated Electronic Disability cases.
• Claims taken for Title XVI disabled individuals in the Modernized Supplemental
Security Income Claims System were recorded in the
Electronic Disability Collect System as disabled children.
The premature release of software is time-consuming for individuals processing
claims and is expensive for the Agency. For example, the cost of repairing software
defects after the software is operational is about 500 to 900 times more costly
than when the error is repaired in the requirements phase.
This review will determine whether SSA finds and repairs software errors at
the earliest practical stage in its systems development life-cycle.
AUDITS OF REPRESENTATIVE PAYEES FOR THE SOCIAL SECURITY ADMINISTRATION
We will be conducting reviews in the following SSA Regions.
REGION III
REGION IV (TWO AUDITS)
REGION V
REGION VIII
REGION IX
REGION X
Objective
To determine whether the representative payee
1. has effective safeguards over the receipt and disbursement of Social Security
benefits and
2. uses and accounts for Social Security benefits in accordance with SSA’s
policies and procedures.
Background
SSA provides benefits to the most vulnerable members of society—the young,
the elderly, and the disabled. Congress granted SSA the authority to appoint
representative payees for those beneficiaries judged incapable of managing or
directing the management of their benefits. Representative payees (organizations
or individuals) receive and manage payments on behalf of these beneficiaries.
Given the risk a representative payee may misuse funds and the vulnerability
of the beneficiaries, it is imperative that SSA have appropriate safeguards
to ensure representative payees meet their responsibilities.
BEST PRACTICES FOR ELECTRONIC RECORDS AUTHENTICATION
Planned Start
Carry Over
Objective
To identify leading public and private entities that successfully employ electronic
records management techniques for authenticating electronic records.
Background
This review will present information on the following methods for authenticating
electronic records.
1. Public Key Infrastructure—A trusted third party provides identity assurance
by issuing a public key certificate to the sender. This identity assurance facilitates
electronic transactions between entities.
2. Knowledge-based—A user answers (via computer) a set of questions that,
if answered correctly, authenticates their identity.
3. Captured Electronic Signatures—Users sign a signature key pad, and
the signature is stored electronically. In some applications, the signature
is authenticated.
CONSERVED FUNDS FOR DECEASED BENEFICIARIES WITH NON-RELATED REPRESENTATIVE PAYEES
Planned Start
Carry Over
Objective
To assess the effectiveness of SSA’s oversight of non-related representative
payees’ disposition of conserved funds for deceased beneficiaries.
Background
SSA provides benefits to the most vulnerable members of society—the young,
the elderly, and the disabled. Congress granted SSA the authority to appoint
representative payees for those beneficiaries judged incapable of managing or
directing the management of their benefits. Representative payees (organizations
or individuals) receive and manage payments on behalf of these beneficiaries.
Specifically, representative payees use Old-Age, Survivors and Disability Insurance
and Supplemental Security Income benefits for the beneficiary’s immediate
or reasonably foreseeable needs.
Additionally, the representative payee is responsible for conserving benefit
payments not needed to meet the beneficiary’s current needs. Upon the
beneficiary’s death, the Agency informs the representative payee that
the conserved benefits belong to the deceased beneficiary’s estate, and
those conserved funds should be turned over to the legal representative of the
beneficiary’s estate for disposition under State law.
CONTROLS FOR CONCURRENTLY ENTITLED SOCIAL SECURITY ADMINISTRATION BENEFICIARIES
WITH REPRESENTATIVE PAYEES
Planned Start
1st Quarter FY 2004
Objective
To determine and evaluate the effectiveness of SSA’s controls to prevent
different payees for concurrently entitled SSA beneficiaries.
Background
Each year, SSA pays benefits to beneficiaries under the Title II and Title XVI
programs. Most beneficiaries receive benefits from only one program. Concurrently
entitled beneficiaries, however, receive benefits from both programs.
SSA policy requires that personnel appoint one payee for all benefits to which
the beneficiary is entitled unless there is some compelling reason to do otherwise.
SSA policy also requires that each claims file be documented with the reason
for naming different payees in those rare instances where different payees will
be appointed for a beneficiary who is entitled to more than one benefit. Where
different payees are appointed, field offices should prepare a diary for a manual
accounting report to be obtained on the Title II claim, when appropriate, because
the system only sends an accounting report to the Title XVI representative payee.
CONTROLS OVER THE SOCIAL SECURITY ADMINISTRATION’S PROCESSING CENTER ACTION
CONTROL SYSTEM
Planned Start
Carry Over
Objective
To determine whether Processing Center Action Control System (PCACS) transactions
are properly controlled and resolved in accordance with established SSA business
priorities and standards and are accurately reported to SSA management.
Background
PCACS distributes workload items to appropriate program service center (PSC)
personnel for control and resolution. PCACS receives workload items through
mail, fax, and electronic data transmission. The bulk of each PSC’s annual
workload is formed by a multitude of electronically generated items from more
than 40 different computer processing sources, such as Benefit Rate Increases,
Returned Check Action Program, Critical Payment System, and Automated Earnings
Reappraisal Operation. PCACS receives these items electronically via batch processing
and then electronically distributes the items to the PSCs based on SSN jurisdiction.
Additionally, PCACS tracks the age and status of each item, and these data items
are used to calculate workload and productivity reports for management reporting
purposes.
During its FY 2002 and 2003 financial statement audits, PricewaterhouseCoopers
LLP noted
• alert suppression was not consistent between PSCs and was not independently
reviewed to determine the correctness of the suppression;
• complaints regarding the handling of transactions were not clearly tracked
to provide information on their resolution or trends; and
• standard management reports did not always reflect the true aging of
items and did not reflect the amount of time items spent in hold categories.
Additionally, previous OIG audits determined that not all alerts were sent to
the PSCs for resolution, and PSCs did not resolve all alerts sent to them.
EFFICIENCY OF THE SOCIAL SECURITY ADMINISTRATION’S ACCELERATED ELECTRONIC
DISABILITY SCANNING PROCESS
Planned Start
1st Quarter FY 2004
Objective
To identify improvements and cost savings in the planned scanning process of
disability documents into the Accelerated Electronic Disability (AeDib) electronic
folder.
Background
The AeDib system’s electronic folder includes two types of data: structured
and unstructured. Structured data include information keyed into the Electronic
Disability Collect System or SSA’s mainframe. Unstructured data include
images of documents that have been scanned into the Document Management Architecture.
This audit will focus on the unstructured data resulting from the document scanning
process.
We believe there may be substantial cost savings in the planned scanning process
of disability documents. A contractor estimated that SSA will spend $375 million
over a 10-year period to scan disability documents into the AeDib electronic
folder. One element that resulted in this high estimate was the size of the
disability case folders. The contractor determined that disability case folders
average 250 pages per case file when hearings are needed for the final adjudication.
SSA is planning an in-line rather than an end-of-line scanning process. SSA’s
in-line scanning process will be achieved by having evidence from medical providers
sent directly to a contractor for scanning into the Document Management Architecture.
We expect to achieve cost savings in this process by identifying improvements
in the process and reducing the number of documents scanned into the electronic
disability folder.
EVALUATION OF THE SOCIAL SECURITY ADMINISTRATION’S ACCELERATED ELECTRONIC
DISABILITY SYSTEM—FIFTH ASSESSMENT
Planned Start
1st Quarter FY 2004
Objective
To determine whether SSA’s project management of its Accelerated Electronic
Disability (AeDib) System will enable the Agency to meet the project’s
expected functionality, including systems security, while complying with laws
and regulations pertaining to system development efforts.
Background
The AeDib project is the Agency’s technological approach to automating
the disability claims process. AeDib is expected to assist the Agency in finding
innovative ways of meeting the challenge of increasing workloads in the future.
The AeDib initiative will replace the paper claims folder with an electronic
record that can be accessed by all case processing components. For example,
AeDib is expected to
1. eliminate the need to print, mail, store and reconstruct the paper claims
folder;
2. stop keying the same information at multiple case processing locations;
3. control and assign work from electronic queues rather than paper folders;
and
4. ensure disability files are available when an appeal is filed or a continuing
disability review is due.
We have completed four assessments in our ongoing evaluation of the AeDib project.
As part of our fourth assessment, we had concerns involving (1) the AeDib sponsors’
participation in the project; (2) the process used in validating the system;
(3) data security at the State DDSs; (3) the cost of scanning paper disability
documents into the AeDib system; and (4) the reduction in the functionality
of AeDib.
INVENTORY REVIEW AT THE NATIONAL RECORDS CENTER
Planned Start
Carry Over
Objective
To determine the accuracy and condition of the physical and computerized inventories.
Background
SSA uses historical information from case folders for a variety of reasons,
such as new claims, appeals, attorney reviews and litigation, and continuing
disability reviews. SSA’s ability to promptly react to the needs of its
customers is often directly dependent on retrieving historical information from
case folders. SSA stores case folders at three major folder storage locations:
the Rolling Heights Megasite, Wilkes-Barre Folder Servicing Operation, and National
Records Center.
SSA stores about 24 million Title II case folders at the National Records Center.
An SSA contractor files, retrieves, and maintains case folders and updates the
electronic inventory system.
MANAGEMENT ADVISORY REPORT—FISCAL YEAR 2003 QUICK RESPONSE ACTIVITIES
SUMMARY REPORT
Planned Start
1st Quarter FY 2004
Objective
To summarize the results of our responses to special inquiries received in FY
2003.
Background
In addition to conducting audits and evaluations, we respond to special inquiries.
These efforts are short-duration, time-sensitive projects that address requests
from Congress, senior SSA officials, other Federal agencies, beneficiaries,
union leaders, and others.
MANAGEMENT OF ALLEGATIONS BY THE SOCIAL SECURITY ADMINISTRATION’S OFFICE
OF SYSTEMS
Planned Start
1st Quarter FY 2004
Objective
To evaluate SSA’s Office of Systems’ (OS) management of allegations
and determine whether all allegations that should have been referred to the
OIG were referred.
Background
SSA receives various types of allegations related to its programs, its employees,
and the misuse of Social Security numbers. While SSA may receive allegations
directly, the OIG also refers allegations it receives through its Hotline to
SSA.
SSA has policies and procedures for handling allegations. For example, allegations
concerning potential criminal violations by SSA employees and non-employees
are generally referred to OIG. Allegations concerning other types of potential
violations, such as potential violations, concerning ethics or equal employment
opportunity issues are generally referred elsewhere.
OS manages the development, acquisition, and use of SSA's information technology
resources that support the Agency's program and business functions. Allegations
concerning OS employees or functions detected in or received by OS are significant
because of the potential impact on SSA’s information system infrastructure
and programs. Our review will focus on how OS manages allegations and whether
all allegations that should have been referred to OIG were referred.
OFFICE OF INVESTIGATIONS ASSISTANCE—REVIEWS OF REPRESENTATIVE PAYEES’
OPERATIONS
Planned Start
Carry Over
Objective
To provide assistance to the Office of Investigations and U.S. Attorney’s
Office in determining whether representative payees properly accounted for the
Social Security benefits received on behalf of the individuals in their care.
Background
The OIG’s Office of Investigations periodically opens investigations of
representative payees and requests that we review bank records to determine
whether the representative payees may have used Social Security benefits for
purposes other than for the individuals in their care.
OPERATIONS OF THE OFFICE OF HEARINGS AND APPEALS MEGASITE
Planned Start
Carry Over
Objective
To review the operations of the Megasite, including its case folder inventory
system.
Background
The Office of Hearings and Appeals’ Appeals Council reviews administrative
law judge decisions appealed by claimants and on its own motion. The Council
decides approximately 100,000 cases per year. Hearing offices send case folders
with unfavorable or partially favorable decisions to a Megasite in Springfield,
Virginia, where they are stored from 6 months up to 2 years. Approximately 200,000
case folders are stored at this site. Folders are shipped between the Office
of Hearings and Appeals in Falls Church and the Megasite. The ability of the
Megasite’s physical and computer inventory tracking system to accurately
and quickly identify and locate the claimant’s folder and shelf position
is critical to find folders and ensure effective, equitable, and timely processing
of appealed claims.
SUITABILITY OF INDIVIDUALS SERVING AS REPRESENTATIVE PAYEES
Planned Start
Carry Over
Objective
To determine whether SSA had adequate controls to identify and prevent individuals
who had Representative Payees from serving as payees for other beneficiaries.
Background
Congress granted SSA the authority to appoint representative payees to receive
and manage beneficiaries’ payments if the beneficiary cannot manage or
direct the management of their benefits because of their youth or mental and/or
physical impairments. Payees can be appointed for Old-Age, Survivors and Disability
Insurance (OASDI) or Supplemental Security Income (SSI) beneficiaries and may
be an individual or an organization.
About 7.6 million individuals have payees—approximately 4.5 million are
OASDI beneficiaries, 2.3 million are SSI recipients, and 800,000 are entitled
to both OASDI benefits and SSI payments.
We have previously reported that beneficiaries who had payees themselves were
serving as representative payees, despite SSA’s policy prohibiting this
practice. In response to a November 17, 2001 report, SSA implemented a control
in the representative payee System to produce an alert when a representative
payee application is completed if the payee applicant has an assigned payee.
This alert was designed to prevent the completion of such a representative payee
application. Additionally, SSA initiated a review of over 4,600 potential instances
of beneficiaries with Payees who were also serving as represetative payees.
This work was performed in two phases. Phase I started September 24, 2001 and
identified 3,809 cases. Phase II started June 24, 2002 and identified 835 cases.
SUMMARY OF FISCAL YEAR 2002 OFFICE OF THE INSPECTOR GENERAL AUDITS OF REPRESENTATIVE
PAYEES
Planned Start
Carry Over
Objective
To identify and summarize common findings and recommendations from the OIG’s
audits of representative payees.
Background
Some individuals cannot manage or direct the management of their finances because
of their youth or mental and/or physical impairments. Congress granted SSA the
authority to appoint representative payees to receive and manage these beneficiaries’
payments. A representative payee may be an individual or an organization. SSA
selects representative payees for Old-Age, Survivors and Disability Insurance
beneficiaries or Supplemental Security Income recipients when representative
payments would serve the individual’s interests. Representative payees
are responsible for using benefits in the beneficiary’s best interests.
In FY 2002, we conducted audits of seven representative payees. These audits
found similar conditions at the representative payees, which we will summarize
and report to SSA.
SUMMARY OF FISCAL YEAR 2003 OFFICE OF THE INSPECTOR GENERAL AUDITS OF REPRESENTATIVE
PAYEES
Planned Start
1st Quarter FY 2004
Objective
To identify and summarize common findings and recommendations from the OIG’s
audits of representative payees.
Background
Some individuals cannot manage or direct the management of their finances because
of their youth or mental and/or physical impairments. Congress granted SSA the
authority to appoint representative payees to receive and manage these beneficiaries’
payments. A representative payee may be an individual or an organization. SSA
selects representative payees for Old-Age, Survivors and Disability Insurance
beneficiaries or Supplemental Security Income recipients when representative
payments would serve the individual’s interests. Representative payees
are responsible for using benefits in the beneficiary’s best interests.
In FY 2003, we conducted audits of six representative payees. These audits found
similar conditions at the representative payees, which we will summarize and
report to SSA.
THE SOCIAL SECURITY ADMINISTRATION’S
COLLECTION OF TITLE II OVERPAYMENTS MADE TO REPRESENTATIVE PAYEES AFTER THE
BENEFICIARY’S DEATH
Planned Start
Carry Over
Objective
To assess the effectiveness of SSA’s Old-Age, Survivors and Disability
Insurance (OASDI) overpayment collection efforts for payments issued to representative
payees for deceased beneficiaries.
Background
SSA administers the OASDI program under Title II of the Social Security Act.
The OASDI program provides protection against the loss of earnings as a result
of retirement, death or disability. According to SSA’s 2001 Supplemental
Statistical Analysis, in 2000, the Agency paid over $400 billion to more than
45 million Title II beneficiaries, and more than 10 percent of the beneficiaries
had representative payees.
SSA relies on the representative payees to report events to SSA that may affect
the individual’s entitlement or benefit payment amount. These events can
include marriage, change in living arrangements, death or incarceration. If
a representative payee fails to notify SSA of such an event, the beneficiary
may be issued an overpayment. It is SSA’s responsibility to identify and
pursue recovery of the overpayment. This recovery process becomes more difficult
when the beneficiary receives benefits through a representative payee.
THE SOCIAL SECURITY ADMINISTRATION’S
EFFORTS TO ADDRESS FUTURE WORKFORCE NEEDS
Planned Start
Carry Over
Objective
To assess SSA’s plans to address its future workforce needs to manage
workloads and continue to provide quality customer service.
Background
Strategic Management of Human Capital is a Government-wide initiative and is
included in the President’s Management Agenda. Moreover, the General Accounting
Office has designated strategic human capital management as a high-risk area.
The Agency faces its own internal “retirement wave,” with the projected
loss of over 38,000 SSA employees to retirement and attrition over the next
decade. At the same time, SSA expects to face explosive workload growth as the
baby boom generation ages and becomes more prone to disabilities.
Based on the results of its analysis of its employee base and the individuals
it serves, SSA has established a multi-faceted response to meet its human capital
challenge. SSA has identified those staff positions that will incur the most
serious losses due to retirement. To reduce the impact caused by these losses,
SSA has implemented various career development programs and developed its succession
plan. Additionally, the Agency has established a 5-year Future Workforce Transition
Plan to help guide SSA from the workforce of today to the workforce needed for
the future. To provide the kind of service that has been the Agency’s
hallmark, SSA recognizes it must maintain a highly skilled, high-performing,
and highly motivated workforce. Although SSA has taken many steps to meet its
human capital challenge, SSA needs to ensure it meets its service delivery goals.
THE SOCIAL SECURITY ADMINISTRATION’S PROCEDURES FOR ADDRESSING EMPLOYEE-RELATED
ALLEGATIONS
We will be conducting reviews in the following Regions.
REGION II
REGION III
REGION IV
REGION VI
REGION IX
Objective
To evaluate the adequacy of SSA’s policies and procedures for addressing
employee-related allegations, determine how well SSA complied with those policies
and procedures, and determine whether SSA actually referred all employee-related
allegations that should have been referred to the OIG.
Background
Every year, SSA receives various types of allegations related to its programs
and the misuse of SSNs. While SSA may receive allegations directly, the OIG
also refers allegations to SSA that it receives through its Hotline. For FYs
2000 through 2002, the OIG referred 876 employee-related allegations to SSA.
Of this number, 665 were sent to SSA’s regional offices.
Allegations concerning employees are significant because of the potential losses
to SSA’s programs and the corresponding negative public impact such issues
can have. Our review will focus on the development and resolution of OIG referrals
of employee-related allegations received during FYs 2001 through 2002 and on
allegations or instances of employee misconduct brought to the attention of
the Regional Offices through other sources.
THE SOCIAL SECURITY ADMINISTRATION’S PROCEDURES TO IDENTIFY INCARCERATED
REPRESENTATIVE PAYEES
Planned Start
1st Quarter FY 2004
Objective
To ensure SSA has adequate procedures to identify when representative payees
are incarcerated so new representative payees can be selected.
Background
Congress granted SSA the authority to appoint representative payees to receive
and manage beneficiaries’ payments if the beneficiary cannot manage or
direct the management of their benefits because of their youth or mental and/or
physical impairments. Payees can be appointed for Old-Age, Survivors and Disability
Insurance (OASDI) or Supplemental Security Income (SSI) beneficiaries and may
be an individual or an organization.
About 7.6 million individuals have payees—approximately 4.5 million are
OASDI beneficiaries, 2.3 million are SSI recipients, and 800,000 are entitled
to both OASDI benefits and SSI payments.
We have previously identified representative payees who were allowed to continue
to manage beneficiaries’ funds despite being incarcerated. To address
this issue, SSA implemented policies prohibiting prisoners from serving as representative
payees. SSA also implemented procedures to identify representative payees when
they become prisoners. If a prisoner is found to be a representative payee,
a new payee should be selected.
THE SOCIAL SECURITY ADMINISTRATION’S REPRESENTATIVE PAYEE SELECTION PROCESS
Planned Start
Carry Over
Objective
To determine whether SSA field office (FO) personnel are adequately determining
whether a representative payee is needed.
Background
Some individuals cannot manage or direct the management of their finances because
of their youth or physical and/or mental impairments. For such people, Congress
provides that payments be made through a representative payee, who receives
and manages the beneficiary’s payments.
SSA has a legal obligation to make proper determinations concerning beneficiaries’ capability of managing their own funds. The decision to make payment through a representative payee is serious since it deprives the beneficiary of direct control over his or her finances and may affect his or her manner of living. SSA is to be alert to evidence indicating the need for representative payment because the beneficiary is incapable of managing his or her own funds.
Section GN 00501.015 of SSA’s Program Operations Manual System (POMS) states that FO personnel are responsible for (1) deciding the capability of individuals to manage their benefits and (2) appointing representative payees (when incapability is found). When deciding the capability of a beneficiary, staff should weigh all the medical, legal and lay evidence obtained during the disability determination process. Further, POMS, section GN 00502.020, states that whenever “…a question of capability is raised, the capability decision must be documented.”
Alphabetical Index
A
Administrative Costs Claimed by State Disability Determination Services 4-1
Appeals Council Process Improvement Action Plan 2-1
Assessing the Effectiveness of the Social Security Administration’s New
Software Testing 6-1
Audits of Representative Payees for the Social Security Administration 6-2
B
Best Practices for Electronic Records Authentication 6-3
C
Comparison of Suspension and Termination Codes Among Social Security Administration
Databases 2-2
Conserved Funds for Deceased Beneficiaries with Non-related Representative Payees
6-4
Controls for Concurrently Entitled Social Security Administration Beneficiaries
with Representative Payees 6-5
Controls over Badge Entry to Social Security Administration Facilities 5-1
Controls over the Social Security Administration’s Processing Center Action
Control System 6-6
D
Death Underpayments Without an Associated Social Security Number 3-1
Disability Determination Services’ Claims Processing Performance 2-3
Disability Insurance Beneficiaries with Earnings Reported on the Master Earnings
File 3-2
E
Efficiency of the Social Security Administration’s Accelerated Electronic
Disability Scanning Process 6-7
Employee Potential System Security Violations 5-2
Enumeration of Children Under Age 1 1-1
Evaluation of the Social Security Administration’s Accelerated Electronic
Disability System—Fifth Assessment 6-8
F
Fiscal Year 2003 Financial Statement Audit Oversight 4-2
Fiscal Year 2003 Inspector General Statement on the Social Security Administration’s
Major Management Challenges 4-3
Fiscal Year 2004 Federal Information Security Management Act Audit 5-3
Florida Universities’ Issuance of “Temporary” Social Security
Numbers to Foreign Students 1-2
Follow up of the Employers with the Most Suspended Wage Items 1-3
Follow up on Potential Indirect Cost Rate Increases at Connecticut Disability
Determination Services 4-4
Follow up of School Attendance by Child Beneficiaries over Age 18 3-3
I
Impact of Unauthorized Employment on Social Security Benefits 1-4
Impact on Network Security of the Social Security Administration’s Conversion
to Windows 2000 5-4
Impact on the Social Security Administration’s Programs When Auxiliary
Beneficiaries Have Incorrect Social Security Numbers 3-4
Indirect Costs Claimed by the Arizona Disability Determination Services 4-5
Indirect Costs Claimed by the New York Disability Determination Services 4-6
Indirect Costs Claimed by the West Virginia Disability Determination Services
4-7
Interim Assistance Reimbursement to Los Angeles County, California, Under the
Supplemental Security Income Program 3-5
Internal Control Review of the Award Process at the Office of Acquisition and
Grants 4-8
Internal Control Review of the Processing of Social Security Number Cards 1-5
Inventory Review at the National Records Center 6-9
M
Management Advisory Report—Fiscal Year 2003 Quick Response Activities
Summary Report 6-10
Management of Allegations by the Social Security Administration’s Office
of Systems 6-11
Military Wage Items in the Earnings Suspense File 1-6
O
Office of Hearings and Appeals Performance to Identify Best Practices 2-4
Office of Hearings and Appeals Pre-effectuation Review Process 2-5
Office of Investigations Assistance— Reviews of Representative Payees’
Operations 6-12
Old-Age, Survivors and Disability Insurance Overpayments 3-6
Operations of the Office of Hearings and Appeals Megasite 6-13
P
Payments to Student Beneficiaries Beyond the Maximum Age of Entitlement 3-7
Performance Audit of the Social Security Administration’s Main Complex
Guard Contract 4-9
Performance Measure Reviews: Audits of the Social Security Administration’s
Performance Data 4-10
President’s Council on Integrity and Efficiency Phase IV 5-5
Project Matrix Step 2—Review of Physical Security for Critical Assets
5-6
Puerto Rico Disability Determination Program Indirect Costs 4-11
R
Reported Earnings Before the Issuance of a Social Security Number 1-7
Representative Payee Reports Indicating Excess Conserved Funds for Supplemental
Security Income Recipients 3-8
S
Social Security Funds Held in Dormant Bank Accounts 3-9
Social Security Number Cards Issued After Death 1-8
Social Security Numbers with More than One Owner 1-9
Suitability of Individuals Serving as Representative Payees 6-14
Summary of Fiscal Year 2002 Office of the Inspector General Audits of Representative
Payees 6-15
Summary of Fiscal Year 2003 Office of the Inspector General Audits of Representative
Payees 6-16
Summary of State Disability Determination Services Administrative Cost Audits
Completed in Fiscal Years 2000 Through 2003 4-12
Summary Report of Single Audit Oversight Activities for Fiscal Year 2003 2-6
Supplemental Security Income Overpayments 3-10
T
The Social Security Administration’s Ability to Offset Special Disability
Workload Underpayments 2-7
The Social Security Administration’s Administrative Finality Rules 3-11
The Social Security Administration’s Brooklyn Social Security Card Center
1-10
The Social Security Administration’s Clean Up of Title II Disability Insurance
Benefit Cases with Workers’ Compensation Offset 3-12
The Social Security Administration’s Collection of Title II Overpayments
Made to Representative Payees After the Beneficiary’s Death 6-17
The Social Security Administration’s Compliance with Policies and Procedures
for Enumerating Noncitizens 1-11
The Social Security Administration’s Compliance with Policies and Procedures
for Enumerating Noncitizens at Overseas Posts 1-12
The Social Security Administration’s Controls over the Title XVI Waiver
Process 3-13
The Social Security Administration’s Controls over Withholding Taxes and
Suspending Benefits to Certain Foreign Beneficiaries 3-14
The Social Security Administration’s Determination of a High Average Current
Earnings For Disability Insurance Benefits Involving Workers’ Compensation
3-15
The Social Security Administration’s Efforts to Address Future Workforce
Needs 6-18
The Social Security Administration’s Internal Use of Employee Social Security
Numbers 1-13
The Social Security Administration’s Oversight of Indirect Costs Claimed
by State Disability Determination Services 2-8
The Social Security Administration’s Procedures for Addressing Employee-related
Allegations 6-19
The Social Security Administration’s Procedures for Enumerating Foreign
Students 1-14
The Social Security Administration’s Procedures to Identify Incarcerated
Representative Payees 6-20
The Social Security Administration’s Representative Payee Selection Process
6-21
The Social Security Administration’s Ticket to Work Program 2-9
Title II Beneficiaries with Military Earnings 1-15
Title XVI Overpayment Write-Offs when Beneficiaries are Unwilling or Unable
to Pay, Cannot Be Located or are Out of the Country 3-16
U
Utility of Earnings Wage Records in the Earnings Suspense File 1-16
Management Challenge Index
Social Security Number Integrity and Protection
Enumeration of Children Under Age 1 1-1
Florida Universities’ Issuance of “Temporary” Social Security
Numbers to Foreign Students 1-2
Follow up of the Employers with the Most Suspended Wage Items 1-3
Impact of Unauthorized Employment on Social Security Benefits 1-4
Internal Control Review of the Processing of Social Security Number Cards 1-5
Military Wage Items in the Earnings Suspense File 1-6
Reported Earnings Before the Issuance of a Social Security Number 1-7
Social Security Number Cards Issued After Death 1-8
Social Security Numbers with More than One Owner 1-9
The Social Security Administration’s Brooklyn Social Security Card Center
1-10
The Social Security Administration’s Compliance with Policies and Procedures
for Enumerating Noncitizens 1-11
The Social Security Administration’s Compliance with Policies and Procedures
for Enumerating Noncitizens at Overseas Posts 1-12
The Social Security Administration’s Internal Use of Employee Social Security
Numbers 1-13
The Social Security Administration’s Procedures for Enumerating Foreign
Students 1-14
Title II Beneficiaries with Military Earnings 1-15
Utility of Earnings Wage Records in the Earnings Suspense File 1-16
Management of the Disability Process
Appeals Council Process Improvement Action Plan 2-1
Comparison of Suspension and Termination Codes Among Social Security Administration
Databases 2-2
Disability Determination Services’ Claims Processing Performance 2-3
Office of Hearings and Appeals Performance to Identify Best Practices 2-4
Office of Hearings and Appeals Pre-effectuation Review Process 2-5
Summary Report of Single Audit Oversight Activities for Fiscal Year 2003 2-6
The Social Security Administration’s Ability to Offset Special Disability
Workload Underpayments 2-7
The Social Security Administration’s Oversight of Indirect Costs Claimed
by State Disability Determination Services 2-8
The Social Security Administration’s Ticket to Work Program 2-9
Improper Payments
Death Underpayments Without an Associated Social Security Number 3-1
Disability Insurance Beneficiaries with Earnings Reported on the Master Earnings
File 3-2
Follow up of School Attendance by Child Beneficiaries over Age 18 3-3
Impact on the Social Security Administration’s Programs When Auxiliary
Beneficiaries have Incorrect Social Security Numbers 3-4
Interim Assistance Reimbursement to Los Angeles County, California, Under the
Supplemental Security Income Program 3-5
Old-Age, Survivors and Disability Insurance Overpaymets 3-6
Payments to Student Beneficiaries Beyond the Maximum Age of Entitlement 3-7
Representative Payee Reports Indicating Excess Conserved Funds for Supplemental
Security Income Recipients 3-8
Social Security Funds Held in Dormant Bank Accounts 3-9
Supplemental Security Income Overpayments 3-10
The Social Security Administration’s Administrative Finality Rules 3-11
The Social Security Administration’s Clean up of Title II Disability Insurance
Benefit Cases with Workers’ Compensation Offset 3-12
The Social Security Administration’s Controls over the Title XVI Waiver
Process 3-13
The Social Security Administration’ Controls over Withholding Taxes and
Suspending Benefits to Certain Foreign Beneficiaries 3-14
The Social Security Administration’s Determination of a High Average Current
Earnings for Disability Insurance Benefits Involving Workers’ Compensation
3-15
Title XVI Overpayment Write-offs When Beneficiaries are Unwilling or Unable
to Pay, Cannot be Located or are Out of the Country 3-16
Budget and Performance Integration
Administrative Cost Audits of 14 State Disability Determinations Services 4-1
Fiscal Year 2003 Financial Statement Audit Oversight 4-2
Fiscal Year 2003 Inspector General Statement on the Social Security Administration’s
Major Management Challenges 4-3
Follow up on Potential Indirect Cost Rate Increases at Connecticut Disability
Determination Services 4-4
Indirect Costs Claimed by the Arizona Disability Determination Services 4-5
Indirect Costs Claimed by the New York Disability Determination Services 4-6
Indirect Costs Claimed by the West Virginia Disability Determination Services
4-7
Internal Control Review of the Award Process at the Office of Acquisition and
Grants 4-8
Performance Audit of the Social Security Administration’s Main Complex
Guard Contract 4-9
Performance Measure Reviews: Audits of the Social Security Administration’s
Performance Data 4-10
Puerto Rico Disability
Determination Program Indirect Costs 4-11
Summary of State Disability Determination Services Administrative Cost Audits
Completed in Fiscal Years 2000 Through 2003 4-12
Critical Infrastructure Protection and Systems Security
Controls over Badge Entry to Social Security Administration Facilities 5-1
Employee Potential System Security Violations 5-2
Fiscal Year 2004 Federal Information Security Management Act Audit 5-3
Impact on Network Security of the Social Security Administration’s Conversion
to Windows 2000 5-4
President’s Council on Integrity and Efficiency Phase IV 5-5
Project Matrix Step 2—Review of Physical Security for Critical Assets
5-6
Service Delivery
Assessing the Effectiveness of the Social Security Administration’s New
Software Testing 6-1
Audits of Representative Payees for the Social Security Administration—Seven
Reviews to be Conducted 6-2
Best Practices for Electronic Records Authentication 6-3
Conserved Funds for Deceased Beneficiaries with Non-related Representative Payees
6-4
Controls for Concurrently Entitled Social Security Administration Beneficiaries
with Representative Payees 6-5
Controls over the
Social Security Administration’s Processing Center Action Control System
6-6
Efficiency of the Social Security Administration’s Accelerated Electronic
Disability Scanning Process 6-7
Evaluation of the Social Security Administration’s Accelerated Electronic
Disability System—Fifth Assessment 6-8
Inventory Review at the National Records Center 6-9
Management Advisory Report—Fiscal Year 2003 Quick Response Activities
Summary Report 6-10
Management of Allegations by the Social Security Administration’s Office
of Systems 6-11
Office of Investigations Assistance—Reviews of Representative Payees’
Operations 6-12
Operations of the Office of Hearings and Appeals Megasite 6-13
Suitability of Individuals Serving as Representative Payees 6-14
Summary of Fiscal Year 2002 Office of the Inspector General Audits of Representative
Payees 6-15
Summary of Fiscal Year 2003 Office of the Inspector General Audits of Representative
Payees 6-16
The Social Security Administration’s Collection of Title II Overpayments
Made to Representative Payees After the Beneficiary’s Death 6-17
The Social Security Administration’s Efforts to Address Future Workforce
Needs 6-18
The Social Security Administration’s Procedures for Addressing Employee-related
Alegations: Five Reviews to be Conducted 6-19
The Social Security
Administration’s Procedures to Identify Incarcerated Representative Payees
6-20
The Social Security Administration’s Representative Payee Selection Process
6-21