EYE on OIG - March 7, 2007

Contents:

• OI Case Highlights
• OCCIG Activities
• Office of Audit (OA) Activities
• Around OIG
• SSA OIG Fraud Hotline Stats

The SSA OIG Fraud Hotline received an anonymous telephone call on June 29, 2004, alleging that a Fort Lauderdale man was continuing to receive his decased father's Social Security benefits. The anonymous caller stated that the benefits were being directly deposited into a joint account even though the man's father had died almost 5 years earlier.

Our investigation revealed that the father had, in fact, died in December 1999, and that the son had told others that he was continuing to receive his father's benefits illegally, and that he feared being caught. When the son became aware that he was under investigation, he repaid $79,194 to SSA, which represented the total amount of benefits paid since his father's death. However, our investigation continued, and in December 2006, the son was sentenced to 3 years' probation. At the sentencing, the judge stated that he was imposing probation rather than imprisonment only because the man had already made full restitution.

Father Conceals Child's Living Arrangements, Misuses $188,556 in Benefits

In June 2004, an SSA employee reported to OIG that a South Carolina man was receiving child-in-care benefits on behalf of a disabled adult child, and was also acting as the representative payee for a child's own benefits. According to the SSA employee, the man had not had the adult child in his care for more than a decade.

Our investigation confirmed that the child had not lived with the man since 1991, during which time the man received more than $109,000 in child-in-care benefits, and almost $108,000 as representative payee. Although he was able to establish that some of these funds were provided to the child's actual caretaker, a Federal Grand Jury indicted the man on multiple charges. He entered a guilty plea, and in November 2006, was sentenced to 1 year of incarceration and 3 years' probation, and was ordered to pay restitution of $188,556 to SSA.

Disability Beneficiary Claims Deceased Twin Sister Used Her SSN to Work

Our Chicago Cooperative Disability Investigations (CDI) unit received an allegation from the Hillside, Illinois SSA office concerning alleged work activity by a Title II disability beneficiary. Our investigation revealed that although the subject became disabled in May 1997, wages were routinely posted to her SSA earnings record, showing steady employment. When questioned, the subject informed SSA that she was still disabled and unable to work. One of the statements provided by the woman was an assertion that her twin sister was using her Social Security number (SSN) to work.

CDI investigators found that the subject's twin sister died more than 50 years ago. Further investigation revealed that the subject had worked for a health care organization for the last 6 years. She was confronted at her place of employment and admitted to providing false information to SSA.

After pleading guilty to theft of Government funds, the beneficiary was sentenced in February 2007 to 2 years' probation, 5 months' home detention, and 200 hours of community service, and was ordered to pay restitution of $89,314 to SSA.

Representative Payee Provides False Information on SSA Application

Our Norfolk, Virginia office investigated a representative payee and her mother for concealment of information. The representative payee was receiving Supplemental Security Income (SSI) disability payments for her mother, brother, and daughter, but our investigation revealed that she had lied about the family's living arrangements on their SSI applications. In addition, the payee did not notify SSA of her father's income or the fact that he was living in the household.

After pleading guilty to obtaining SSI under false pretenses, the woman was sentenced in January 2007 to 3 years' incarceration (which was suspended), 10 years' supervised probation, and 200 hours of community service. She was also ordered (jointly and severally with her mother) to pay restitution of $134,314 to SSA. The woman's mother is awaiting sentencing.

Mother Fails to Notify SSA of Her Children's Living Arrangements

This case was based on a referral from the Rock Springs, Wyoming SSA office to our Salt Lake City, Utah office. Our investigation revealed that a mother receiving Title II survivors benefits for her two children had failed to notify SSA that the children were no longer in her care. One of the children left her care in December 2004 and the other in March 2005. The woman did not provide for the children's needs; instead, she used the monies for her own personal expenses.

In January 2007, after pleading guilty to misuse of Social Security benefits and falsifying, concealing, or covering up a material fact, she was sentenced to 6 months' imprisonment and 1 year of probation, and was ordered to pay restitution of $10,863 to SSA.

OCCIG Activities

Woman Agrees to $32,430 Civil Monetary Penalty (CMP) Settlement After Full-Time Job Revealed

A 32-year-old woman began receiving Title II disability benefits in 1997 due to depression, sleep apnea, and fibromyalgia. However, in October 2003, she started working full-time as a tax preparer. While still continuing to work, the woman reported on an SSA form in October 2004 that she was not working at substantial levels. The SSA field office was alerted to the woman's substantial earnings, and SSA field office employees interviewed the woman. After the woman confessed that she had been working as a tax preparer as well as assisting with her husband's businesses, SSA referred the case to OIG. After proposing a Civil Monetary Penalty, OCCIG accepted an agreement whereby the woman agreed to pay SSA $32,430.

Woman Agrees to $53,120 CMP and Assessment After Concealing Mother-in-Law's Death for 3 Years

A 55-year-old Texas woman who served as representative payee for her mother-in-law continued to collect SSI for 3 years after her mother-in-law's death. During this time, she made four misrepresentations on Representative Payee Reports. The Chief Counsel to the Inspector General proposed a Civil Monetary Penalty, and ultimately entered into a Settlement Agreement with the woman under which she agreed to pay a penalty and assessment totaling $53,120.

OA Activities

On April 7, 2006, the House of Representatives' Committee on Ways and Means, Subcommittee on Social Security, requested information from OIG regarding SSA's employer verification programs as well as the accuracy of the SSA data used to verify employment eligibility. We recently issued the following two reports related to these requests.

Congressional Response Report: Employer Feedback on the Social Security Administration's Verification Programs (View Report A-03-06-26106)

The Subcommittee on Social Security asked us to provide information on the experiences of employers who have used employee verification programs administered by the Social Security Administration (SSA) and the Department of Homeland Security (DHS). We looked at two such programs, which use SSA data to allow employers to verify the identity and/or employment eligibility of their employees. These programs include 1) SSA's Social Security Number Verification System (SSNVS), an on-line employee verification program; and 2) Basic Pilot, a Department of Homeland Security (DHS) program in which SSA participates.

We found that many of the employers using SSNVS verified their entire payroll, which SSA encourages to ensure accurate wage reporting. However, of the employers using Basic Pilot, we found that about 42 percent were not using the program as intended.

We also found that most employers took appropriate actions when they received unverified responses from SSNVS or nonconfirmation responses from the Basic Pilot program. The employers notified affected employees about the unverified results, and terminated employees when they declined to contest the nonconfirmation responses.

While some employers reported problems in using each of the programs, SSA and DHS were generally able to resolve these issues timely. At least 98 percent of both programs' users indicated that they were likely to continue using the programs.

Congressional Response Report: Accuracy of the Social Security Administration's Numident File (View Report A-08-06-26100)

SSA's Numident file contains relevant information about Social Security numberholders, and is used in verification programs such as the Basic Pilot. The Subcommittee on Social Security asked us to assess the reliability of Numident data used in these programs. In particular, the Chairman asked that we assess the accuracy of SSA Numident fields that are relied on by the Basic Pilot, for each of the following U.S. populations: (1) native-born citizens, (2) foreign-born citizens, and (3) non-citizens.

We reviewed 810 randomly-selected Numident records in each of the three populations for a total of 2,430 records. We reviewed the records for accuracy, and to determine whether the records that contained data discrepancies would result in inaccurate feedback from the Basic Pilot program to the employer.

Given the scope of information held in SSA's Numident file, we applaud the Agency on the accuracy of the data we tested. However, we estimate that approximately 17.8 million (4.1%) Numident records contain discrepancies that may result in incorrect Basic Pilot feedback to employers. Because our sample included SSNs that were assigned decades ago, we recognize that some records are too old to be corrected. However, if even a portion of the estimated individuals whose Numident records contained discrepancies were required to visit an SSA office to correct their information, the Agency's workload may significantly increase until such time as the affected records were corrected.

Title II Disability Insurance Benefits with a Workers' Compensation Offset (View Report A-04-05-15133)

We recently conducted an audit to determine the accuracy of payments of Title II Disability Insurance (DI) claims with WC offsets. Workers injured on the job may qualify for State and Federal workers' compensation (WC) benefits in addition to SSA's Title II Disability Insurance (DI) benefits. To prevent workers from earning more in disability payments than their previous wages, Congress enacted the WC offset provision, which requires SSA to reduce DI payments by the amount of WC benefits.

We identified about 235,000 DI claims in which SSA records indicated that a WC offset began between 1998 and 2004, and reviewed a random sample of 250 claims. Of these 250 claims, 43 (17 percent) had payment errors. Of these errors, 27 were directly related to the WC offset calculation, and these errors totaled $158,590. Based on our sample results, we estimated that approximately 25,377 DI claims totaling about $149.1 million had payment errors related to the WC offset.

Though we found that most payment mistakes resulted from human error, we were encouraged by a software enhancement which automated some aspects of the process. However, accuracy still depends on SSA staff decisions and the data they record when processing claims. SSA agreed with all of our recommendations, including that SSA: support legislation requiring States to make standardized WC information available to SSA on a real-time basis; explore the feasibility of electronic data exchanges with States; and increase management oversight of the WC offset calculation.

Supplemental Security Income (SSI) Recipients Whose Medicare Benefits Were Terminated Due to Death (View Report A-01-06-26105)

We conducted this audit based on a suggestion from an SSA employee who had identified several cases in which Supplemental Security Income (SSI) payments continued even though the recipients' Medicare benefits were terminated for death.

Using Medicare benefit information supplied by SSA, we identified 251 individuals whose SSI payments continued even though their Medicare records indicated they were deceased. Of these, we found that 86 (34 percent) were actually deceased and should no longer be issued SSI payments. Although the Agency stopped payments timely for 19 of these individuals, the remaining 67 individuals received a total of $490,288 in incorrect payments. We estimated that SSA could save $237,103 over the next 12 months by stopping payments to the deceased recipients.

We also found that 165 of the 251 individuals in our audit were alive and their Medicare benefits were incorrectly terminated. Of these, SSA had terminated SSI payments to 85 individuals due to death, despite the fact that they were alive. Because the Privacy Act requires that SSA confirm information resulting from computer matches before taking action to stop benefit payments, SSA policy is to verify death reports received from third parties-including CMS-before stopping SSI payments. However, we found that the SSI payments to these 85 individuals were stopped without verification because of limitations in SSA's computer systems.

SSA agreed to our recommendations, including that SSA review the cases we identified in our audit and take appropriate action; and that SSA confirm deaths reported from CMS before terminating payments to SSI recipients.

Around OIG

Special Agent Gerald Maye received a Bronze Award Honorable Mention in the Outstanding Supervisor category for his contribution to the development of a robust electronic crimes program, and Jackie White from the Office of Audit received a Bronze Award Honorable Mention in the Outstanding Administrative Assistant/Management Assistant category. Congratulations to both Gerald and Jackie.

Brian Karpe, an Audit Manager in the Office of Audit's Financial Audit Division, recently began his detail in the Agency's Advanced Leadership Program. The Advanced Leadership Program (ALP) is an 18-month program designed to provide high-potential employees currently at the GS-13 and GS-14 levels with training and higher-level developmental experiences to prepare them to become future Agency leaders. Brian's first assignment is in the Office of Facilities Management. Congratulations to Brian on his selection into the program.

Deputy Assistant Inspector General for Resource Management Robert Meekins was recently detailed to act as Director of the Allegation Management Division, following the retirement of long-time Special Agent-in-Charge Monica Machovec. Joscelyn Funnie of the Office of Chief Counsel was selected to act as Deputy Assistant Inspector General for Resource Management during this time. Congratulations to both Robert and Joscelyn on their selection.

SSA OIG Fraud Hotline Stats

From February 26-March 2, 2007, the SSA OIG Fraud Hotline received 973 allegations.

For the fiscal year, through March 2, 2007, the Hotline has received a total of 18,662 allegations.

Our website provides guidelines for reporting fraud and a way to submit an allegation to our Fraud Hotline. For more information, visit www.socialsecurity.gov/oig.