Problems With Payees are
Less Extreme Than Anecdotal Stories Would Suggest
The Accounting Review Process
Places an Undue Administrative Burden on SSA
The Accounting Review Process
Produces Limited Results
The Accounting Review Process
Fails to Meet Mandated Minimum Requirements
The System Relies on Incomplete
and Inaccurate Data
RECOMMENDATIONS
1. SSA Should Develop a System
to Continuously Educate Payees Concerning Their Responsibilities
2. SSA Should Conduct More
Thorough Screenings of Potential Representative Payees
3. SSA Should Revise Its "Preference
Lists" for Payees to Place Greater Emphasis on Custody Arrangements
4. SSA Should Develop a Comprehensive
Automated Representative Payee System
5. SSA Should Not Require Annual
Reports From All Representative Payees
6. SSA Should Tailor Forms
to Address Variations Among Payees and Differences in Relationships
Between Payees and Beneficiaries
7. SSA Should Conduct Periodic
Reviews of Selected Payees
8. SSA Should Change the Focus
of the Current Process From Accounting to Monitoring and Compliance
9. SSA Should Develop a Payee
Coding Scheme That Reflects the Agency`s Needs for Administering
the Process
10. SSA Should Review Previous
HHS/OIG and SSA/OIG Recommendations Related to Representative
Payment to Determine if Additional Benefit Could be Gained From
These Recommendations
This roll-up report provides
comprehensive recommendations for increasing the efficiency and
effectiveness of the Social Security Administration`s (SSA)
representative payee monitoring process. This report summarizes
the findings and recommendations of 16 audit and evaluation
reports concerning representative payee issues. These reports,
issued by the Department of Health and Human Services` Office
of Inspector General (HHS/OIG) and SSA`s Office of the Inspector
General (SSA/OIG) during the 1990`s, provided findings and
recommendations concerning: (1) SSA`s accounting review
process; (2) assessment of risk by various types and categories
of representative payees; and (3) the demographics of representative
payees and beneficiaries.
BACKGROUND
SSA administers two programs
under The Social Security Act--title II (Old-Age, Survivors,
and Disability Insurance (OASDI)) and title XVI (Supplemental Security
Income (SSI)). These two programs provide monthly benefits to approximately
49.2 million beneficiaries and recipients (collectively called
beneficiaries) who are aged, disabled, or survivors.
If beneficiaries cannot manage
their own finances, Congress has authorized SSA to pay their benefits
to other individuals or organizations on their behalf. SSA calls
these individuals and organizations representative payees (hereinafter
called payees). As of December 1994, approximately 6.6 million
SSA beneficiaries had payees. Payee responsibilities include, but
are not limited to, frequently monitoring the beneficiary’s
current well-being for food, shelter, clothing, medical care, and
personal needs; informing SSA of changes in the payee’s own
circumstances that would affect the payee’s performance; reporting
events to SSA that may affect the beneficiary’s entitlement
or amount of benefits; and submitting an annual accounting to SSA
reporting about benefits received, used, and conserved.
SSA has undertaken initiatives
to strengthen the entire annual accounting process. To assist in
this effort, SSA requested that we conduct a series of inspections
to review and recommend improvements to the annual accounting process.
For this report, we reviewed previous HHS/OIG and SSA/OIG reports
concerning representative payment to identify common issues. Based
on these common issues, we developed summary findings and comprehensive
recommendations for improving the accounting review process.
SUMMARY FINDINGS
The HHS/OIG and SSA/OIG produced
16 reports in the 1990`s specifically addressing payee issues
(see Appendix A). Most of these reports focused specifically on,
or grew out of concerns about, the current accounting review process.
In summarizing these reports, five general findings emerge.
Problems With Payees
are Less Extreme Than Anecdotal Stories Would Suggest
The Accounting Review
Process Produces Limited Results
The Accounting Review
Process Places an Undue Administrative Burden on SSA
The Accounting Review
Process Fails to Meet Mandated Minimum Requirements
The System Relies on
Incomplete and Inaccurate Data
RECOMMENDATIONS
Our collective findings suggest
that SSA needs to make fundamental changes to the current accounting
review process. Therefore, SSA should:
develop a system
of continuous training for payees;
conduct more
thorough screenings of potential representative payees;
revise its "preference
lists" for payees to place greater emphasis on custody
arrangements;
develop a comprehensive
automated representative payee system;
not require annual
reports from all representative payees;
tailor forms
to address variations among payees and differences in relationships
between
payees and beneficiaries;
conduct periodic
reviews of selected payees;
change the focus
of the current process from accounting to monitoring and compliance;
develop a payee coding
scheme that reflects the Agency`s needs for administering
the process; and
review previous
HHS/OIG and SSA/OIG recommendations related to representative
payment
to determine if additional benefit could be gained from these
recommendations.
AGENCY COMMENTS
SSA is in general agreement with
our recommendations. SSA identified areas where it is planning
to revise procedures, conduct pilot studies, seek approval for
form revision, and explore obtaining legislative relief to implement
our recommendations. The areas where SSA did not agree with our
recommendations are discussed in the Recommendations section of
the report. The full text of the Agency comments are in Appendix
B of the report.
This roll-up report provides
comprehensive recommendations for increasing the efficiency and
effectiveness of SSA’s representative payee monitoring process.
This report summarizes the findings and recommendations of 16 audit
and evaluation reports concerning representative payee issues.
These reports, issued by HHS/OIG and SSA/OIG during the 1990`s,
provide findings and recommendations concerning: (1) SSA`s
accounting review process; (2) assessment of risk by various
types and categories of representative payees; and (3) the
demographics of representative payees and beneficiaries.
BACKGROUND
SSA administers two programs
under The Social Security Act--title II (OASDI) and title XVI
(SSI). These two programs provide monthly benefit payments of about
$25 billion to approximately 49.2 million beneficiaries and recipients
who are aged, disabled, or survivors. Concurrently entitled beneficiaries
receive benefit payments from both programs based on their entitlement
to title II and eligibility for title XVI.
SSA collects and maintains data
on all beneficiaries in two computerized data bases--title II
data are maintained in the Master Beneficiary Record (MBR), and
title XVI data are maintained in the Supplemental Security
Record (SSR). The data bases contain descriptive information about
the beneficiary, such as date of birth and amount of benefits.
Overview of the Representative
Payee Program
Approximately 6.6 million beneficiaries,
or slightly more than 13 percent, cannot manage their own finances.
If beneficiaries cannot manage their own finances, Congress has
authorized SSA to pay the benefits to other individuals or organizations
on their behalf. The law requires payees for disability beneficiaries
who have an alcoholism or drug addiction condition and are incapable
of managing their benefits. SSA calls these individuals and organizations
representative payees (hereinafter called payees).
SSA determines if beneficiaries
need payees using medical and Agency guidelines. Such beneficiaries
may include the mentally or physically impaired and persons incapable
of exercising good financial judgment. The law includes a list
of preferred payees for disability beneficiaries with an alcoholism
or drug addiction condition who are incapable of managing their
benefits. In addition, SSA requires a payee for some individuals,
including legally incompetent adults and most minor children under
age 18.
The Social Security Act authorizes
the Commissioner of SSA to appoint payees. Payees may include,
but are not limited to, parents with or without custody of children,
spouses, other relatives, legal guardians, friends who show strong
concern for the beneficiary`s welfare, and institutions with
or without custody of the beneficiary. (Concurrently entitled beneficiaries
may have a payee for only one program, the same payee for both
programs, or a different payee for each program.)
When SSA appoints payees, it
updates beneficiaries` MBR and/or SSR files with information
about the payees. This information includes, but is not limited
to, the payees` names and addresses, the type of payee code,
and the custody arrangements.
Payee Responsibilities
A payee`s responsibilities
include:
frequently monitoring
the beneficiary`s current well-being for food, shelter, clothing,
medical care, and personal needs;
acting for the beneficiary
on matters relating to the beneficiary`s claim with SSA;
informing SSA of changes
in the payee`s own circumstances that would affect the payee`s
performance;
returning benefits to
which the beneficiary is not entitled, such as when the beneficiary
is incarcerated or dies;
reporting events to
SSA that may affect the beneficiary`s entitlement or amount
of benefits, such as work, marriage, and changes in address or
custody; and
submitting an annual
accounting to SSA reporting on benefits received, used, and conserved.
Payees receive the booklet, A
Guide For Representative Payees, during the application interview
which describes these responsibilities and the appropriate use
of benefits. The booklet includes a worksheet to record the use
of benefits and a sample accounting form.
The Jordan Court and the
Beginnings of the Accounting Review Process
Prior to 1983, SSA did not have
a mandate to conduct accountings of funds that payees received
on behalf of beneficiaries. The Agency relied on its own initiative
to create an accounting system. In 1979, Ms. Jeanne Jordan brought
a class action suit against SSA challenging how it monitored payees.
(Ms. Jordan alleged that her payee was not using her SSA benefits
properly to meet her needs.) In its 1983 decision, the Jordan Court
decided that payees should be required to give a full accounting
of how they spend and save title II and title XVI benefits on behalf
of beneficiaries. Subsequently, Congress amended The Social
Security Act to require annual accounting of all payees except
State mental institutions participating in the on-site review program.
SSA designed an annual accounting
process to gather data from the payee about various situations
involving the beneficiary. The data is intended to help SSA determine:
1. the continuing suitability
of the payee;
2. the continuing need for
representative payment; and
3. whether the payee used benefits
properly during the 12-month report period.
Selecting Payees for Accounting
Review
Each month, SSA uses its computerized
data bases (the MBR and the SSR) to identify payees who are to
receive annual accounting forms. SSA usually schedules payees to
receive forms on the anniversary of the month they were selected
to be the payee, although SSA and/or payees may designate an alternate
report period. As a result of this selection process, SSA sends
initial accounting forms to approximately one-twelfth of all payees
each month. SSA uses a contractor to mail accounting forms to payees.
SSA’s policies are designed
to prevent selection of a payee who should not receive accounting
forms. Circumstances in which a payee should not receive an accounting
form include when the payee: (1) has received the beneficiary’s
benefits for less than 1 year; (2) is covered under the on-site
review program; or (3) lives in a foreign country.
Certain payees for concurrently
entitled beneficiaries also should not be selected. SSA’s
policies for concurrently entitled beneficiaries are designed to
prevent the same payee from receiving two accounting forms on behalf
of the same beneficiary. It is likely that this would occur if
SSA selected information from both the MBR and SSR. Therefore,
SSA selects information from the SSR only. As a result, however:
SSA will select information
necessary to mail accounting forms to payees managing both benefits
for beneficiaries;
SSA will select information
necessary to mail accounting forms to payees managing the title
XVI benefits but will not select information necessary to mail
accounting forms for payees managing the title II benefits for
beneficiaries with different payees; and
SSA will not select
information necessary to mail any accounting forms for beneficiaries
who have payees for their title II benefits but receive their
title XVI benefits directly.
When the contractor mails accounting
forms to payees, SSA establishes a centralized computer systems
diary to control the forms` return. When a payee returns the
form, SSA clears the systems diary to acknowledge receipt. If a
payee does not return the accounting form to the Wilkes-Barre Data
Operations Center (WBDOC) in Pennsylvania within 3 months,
the contractor mails a second copy of the accounting form. If a
payee returns the form as a result of the second request, SSA clears
the systems diary.
If payees have not returned either
form within 6 months of the first mailing, SSA, through the National
Computer Center in Baltimore, Maryland, produces lists of payees
from the systems diary who have not returned the forms. The lists
(called "nonresponder alerts" or "listings")
are sent to SSA field offices and processing centers for follow-up
by telephone or mail. The field offices contact nonresponding payees
for title XVI beneficiaries. The processing centers contact nonresponding
payees for title II beneficiaries. If the processing centers are
unsuccessful, they send development requests to the appropriate
SSA field offices. The processing centers retain control of development
requests for nonresponding payees and follow up with field offices
for status reports.
Processing Returned Accounting Forms
The WBDOC in Pennsylvania completes the initial
screening, data verification, and review of all returned
forms. The staff use a computer program to review the accounting
forms and determine whether further contact with payees is necessary.
Contact is usually by telephone and may include completing unanswered
questions, clearing up misunderstandings, counseling on proper
use of benefits, and investigation for alleged misuse or fraud.
Depending on the nature of the contact, the WBDOC, processing centers,
and/or field offices may become involved.
Once no further action is necessary relative
to a form (i.e., the form did not require further contact with
the payee or all issues have been resolved), SSA stores it for
a period of 2 years. Due to the volume of forms, SSA does
not store them in an easily retrievable format. SSA generally groups
them by the report period date.
The Increasing Costs of Annual Accounting
The cost of annual accounting has almost doubled
over the last 5 years as indicated in the graph below. In Fiscal
Year (FY) 1991, SSA spent approximately $33.2 million to administer
annual accounting. For FY 1996, SSA estimated that it would spend
$66.0 million for annual accounting.
SSA Initiatives and Changes in Annual
Accounting
SSA has instituted various means to help address
rising costs and reduce administrative burdens. Five initiatives
are listed below.
To handle a high volume of annual
accounting, SSA originally developed the standardized accounting
form SSA-623. This form asks how payees used the funds for:
1.
food and shelter; 2. other items such as clothing, education,
personal items, and medical and dental expenses; and (3)
3. savings.
The form also asks payees about:
1. changes
in the beneficiary`s
custody; 2. whether the payee or another person controlled
the SSA benefits; and (3) 3. their own felony convictions during
the previous 12 months. SSA sends all payees an
SSA-623 for each beneficiary that a payee represents
(except those
who
are covered by the on-site review process or complete
the SSA-6230).
In July 1990, SSA introduced the
SSA-6230 accounting form for parents and, later, stepparents
and grandparents with custody of minor children who receive title
II benefits. These payees may report their use of benefits for
up to four children on the same form. Since parents, stepparents,
and grandparents represent the largest type of payee category,
most title II payees now receive the SSA-6230.
SSA asked OIG to conduct a series
of inspections that would review and recommend improvements to
the annual accounting process.
Independent of the OIG`s work,
SSA appointed an internal Quality Improvement Team to analyze
various parts of the accounting process. The team recommended
changes in the accounting forms and processes to reduce manual
workloads and streamline the process.
n June 1995, SSA appointed an external
Representative Payee Advisory Committee to study all aspects
of the accounting process from payee selection through monitoring
payee performance. The Committee reported its findings and recommendations
to the Commissioner of SSA in November 1996.
METHODOLOGY
We reviewed previous HHS/OIG and SSA/OIG reports
concerning representative payment to identify common issues. Based
on these common issues, we developed summary findings and comprehensive
recommendations for improving the accounting review process.
This inspection was conducted in accordance
with the Quality Standards for Inspections issued
by the President`s Council on Integrity and Efficiency.
HS/OIG and SSA/OIG have produced 16 reports
in the 1990`s specifically addressing payee issues (see Appendix
A). Most of these reports focused specifically on, or grew out
of concerns about, the current accounting review process. In summarizing
these reports, five general findings emerge.
Stories in the media frequently highlight
cases in which payees have acted inappropriately. While these
cases are often severe, they do not represent the millions
of payees who serve willingly and act appropriately. The problem
cases that we identified: (1) often were the result of payees
failing to fully understand their responsibilities; and (2) could
have been prevented had SSA conducted more thorough suitability
checks prior to payee selection.
Staff throughout SSA expressed frustrations
related to the amount of time and effort needed to address the
ever growing payee workload. Our own independent analysis supports
these concerns. We found that SSA staff expend vast effort following
up reported changes or potential problems as identified by the
accounting forms. In many cases, these "changes" or "problems" were
the result of payee confusion rather than actual events. (It
is important to note that our findings focused on the process
from SSA`s perspective. We did not address what burden this
process places on payees, especially payees serving multiple
beneficiaries.)
Although problems may be limited, they are
real. Our findings support SSA staff`s belief that the accounting
review process rarely detects misuse of benefits. In addition,
we found that the current accounting review process rarely detects
problems of any kind. Reasons for this include, but are not limited
to: (1) SSA’s resources being used to clear up payee confusion
rather than identify real problems; (2) limited follow-up of
nonresponding and/or high-risk payees; (3) questions either
do not focus on real problems or are not phrased in a manner
that quickly identify problems; and (4) the process essentially
treats all payees the same.
Congress and the courts require that SSA
obtain completed accounting forms from virtually all payees annually.
Our findings suggest that some payees never receive forms, and
many more do not return forms. These findings do not address
whether it is appropriate for all payees to complete annual accounting
forms, but rather SSA`s ability to administer the process
effectively and completely.
Currently,
SSA selects beneficiary records for payee accounting
based on coding in SSA`s computerized
data bases (the MBR and the SSR). Our findings demonstrate
that these data are, in many cases, incomplete or inaccurate.
As a
result, payees may receive incorrect accounting forms or beneficiary
records may either be selected or not selected (improperly)
for annual accounting purposes.
Although a variety of less significant findings
were previously reported in the 16 reports, we will concentrate
our recommendations on these five main findings. We believe that,
in addressing these five findings, many of the less significant
findings will be addressed.
Our collective findings suggest that SSA needs
to make fundamental changes to the current accounting review process.
The "shotgun" approach--asking payees to complete the
same form at the same interval--ignores the various relationships
between payees and beneficiaries. Even worse, the current process
produces only limited results for the amount of effort SSA expends.
While we agree with the need for some process to oversee payees` efforts,
we do not believe that the current process is the only means to
achieve this goal. Therefore, we recommend that SSA:
Problems that we identified often were the
result of payees failing to understand their responsibilities.
The payees either forgot their responsibilities or did not recall
having received instruction when SSA appointed them payee.
1.A. SSA should consider having payees
periodically sign statements (which clearly state payees` responsibilities)
to certify that they understand and agree to fulfill their
responsibilities. This would help re-educate them about their
responsibilities.
We found high staff turnover at some agencies,
institutions, and other volume payees. The result is that staff
with no knowledge of SSA may be directing the use of benefits.
1.B. SSA should develop methods to
periodically train the staff at these volume payees.
Problems that we identified often were not
new and, in many cases, existed from the time SSA appointed the
payees. For example, many potential misuse cases were the result
of parents falsely claiming to have custody of their children.
(Overall, we found that problem payees often were coded incorrectly
as having custody of the beneficiaries.) A simple custody check
could have prevented years of misuse or questionable use of benefits.
2.A. During custody checks, SSA should
verify payees` statements made on the application and during
the interview.
2.B. For agencies, institutions, or
other volume payees, SSA should determine whether the potential
payees` record keeping systems are sufficient to ensure
that beneficiaries` needs will be adequately met.
2.C. SSA should conduct suitability
checks only for payees it intends to select. We do not believe
that SSA needs to conduct checks for all payee applicants.
SSA COMMENT
Recommendation 2.C. -– SSA believes
that suitability checks are necessary for all applicants in order
to select the best possible payee.
OIG RESPONSE
We continue to believe that the most efficient
use of resources is to conduct a suitability check only for the
payee highest on the preference list, continuing down the list
only if the most preferred payee is found to be unsuitable. A
policy of conducting suitability checks for all applicants would
seem to be unnecessary, burdensome, and of questionable benefit.
SSA`s current "preference lists" are
weighted towards relationships between payees and beneficiaries.
Our findings suggest that, in many cases, custody is a more important
factor affecting payee performance than relationship. For example,
a nonparent relative with custody may, in some respects,
be a better choice than a parent without custody.
Although the current process allows SSA
to manage the return of millions of forms each year, we believe
that the process could be improved through automation. SSA is
working to make the Representative Payee Master File fully operational.
At a minimum, we believe that the following could be added to
this file as part of the fully automated system:
4.A.Tracking system for payees` return
of accounting forms -- This would prevent information
about unreturned forms from being overwritten as well as
provide SSA staff with a performance measure to use in
the payee selection process.
4.B.On-line exception processing --
The current process for reviewing forms is primarily manual.
When an exception occurs--a payee answers a question in a manner
which requires direct contact--the form may be mailed from
one office to another until the exception is resolved. Each
office must do its own review to determine what follow-ups
are required. This manual processing reduces the timeliness
of SSA`s actions. For example, if a payee reports excessive
resources for a title XVI beneficiary, it may take days or
weeks for the form to be mailed to the appropriate office.
An overpayment is the likely result of these delays. An automated
system could send a message to the appropriate office as soon
as the form is recorded into the system.
4.C. On-line copies
of completed forms -- Once SSA has processed the forms,
it stores them in a manner that does not allow easy retrieval.
This
reduces the forms` usefulness for trend analysis or
criminal investigations. Having on-line access to responses
would allow SSA to review questions to determine the forms` effectiveness
and adequacy in identifying problem payees.
The comprehensive automated system would
allow SSA to close "gaps" in the current process.
These gaps result in:
1. payees not receiving forms
when they should
(i.e., title II payees for concurrently entitled
beneficiaries); and 2. inadequate systematic controls over
the return of forms.
Our findings suggest that some payee types
demonstrate low risk of misuse or poor performance. The risk
associated with some payee types (e.g., parents and relatives with
custody) is sufficiently low as to warrant other than
annual reporting.
5.A. SSA should consider sending
forms to payees at 3-year intervals where statements concerning
relationship, custody, and record keeping have been verified
(see recommendation 2). We also found that problems associated
with some payee types could be reduced if SSA screened payees
more thoroughly and re-educated payees periodically. Therefore,
other payee types could be included under the 3-year cycle
if these efforts could reduce their risk category sufficiently.
5.B. SSA should exempt from annual
reporting those payees who complete extensive reporting for
an official or an external organization (e.g., legal guardians).
SSA COMMENT
Recommendation 5.B. – SSA does not
agree that payees who are required to complete extensive reporting
for officials or external organizations (e.g., legal guardians)
should be exempted from annual reporting because they may have
creditor relationships, and few have custody.
OIG RESPONSE
We agree that some of these payees may have
creditor relationships. However, our rationale for exemption
from annual accounting is based on the premise that such payees
have apparently demonstrated the responsibility necessary for
their selection to a position of fiduciary responsibility (e.g.,
legal guardian). The financial accountability requirements required
for such positions would usually be more extensive than required
by SSA for a representative payee.
5.C. SSA should also periodically
certify that these payees still complete the alternate reporting.
5.D. SSA should, in order to implement
the above recommendations, seek legislative relief from The
Social Security Act and the Jordan Court order concerning
the requirement to obtain an annual accounting of benefits
from all payees.
Focusing strictly on parents and relatives
with custody, we believe that SSA could save $34.7 million of
the $66 million estimated cost for annual accounting--$173.4 million
over 5 years--by implementing a 3-year cycle. (These savings
would be somewhat reduced by the initial face-to-face checks
required to screen potential payees.) If SSA exempted the 6.7
percent of payees who are legal guardians, it could save $4.4
million annually or $22.1 million over 5 years.
SSA COMMENT
Recommendation 5 -- SSA agrees that significant
savings are possible by moving away from an annual payment cycle,
but believes that the OIG savings estimates are overstated because
we did not consider that parents with custody can report compliance
on up to four children on one accounting form.
OIG RESPONSE
We did consider that multiple children can
be reported on a single accounting form in determining the amount
of savings that could be achieved by implementing a 3-year rather
than a 1-year accounting cycle. Our calculations were based on
the number of forms, not the number of beneficiaries, that would
be affected by this change.
6.
Tailor Forms to Address Variations Among Payees and Differences
in Relationships
Between Payees and Beneficiaries
The current forms treat all payees virtually
the same. One form, the SSA-6230, is for parents, stepparents,
and grandparents with custody of minor children receiving title
II benefits, while the other form, the SSA-623, is for all other
payees. This reduces the effectiveness of the process and requires
payees to answer questions which are not appropriate for their
particular situation.
6.A. SSA should, at a minimum, create
forms which differentiate individual payees from agencies,
institutions, and other volume payees.
For individual payees (e.g., parents, friends,
etc.) we recommend that:
6.B. Payees` responsibilities should
be clearly stated on the application form. If, at a later
date, it is shown that a payee did not fulfill his or her responsibilities,
this signed document will provide SSA with evidence that
the
payee understood and agreed to the responsibilities.
6.C. Questions should be more specific
to the payee`s and/or beneficiary`s situation. For
example, if a beneficiary is coded as being in the payee`s
custody, ask "Did the beneficiary live with you the
entire report period?" If the beneficiary is in his
or her own custody, ask "Is the beneficiary still in
his (or her) own custody?" If
the beneficiary was in an institution`s custody, ask "Did
the beneficiary live in the same institution during the entire
report period?"
6.D. Questions should focus on events
that payees commonly fail to report. Although payees certify
that they will fulfill their responsibilities, including
reporting significant events to SSA, our findings suggest that
this does
not always occur. Many problems we identified resulted from
payees failing to inform SSA of significant events (e.g., beneficiaries
in prison). Using the form to collect this information could
significantly reduce overpayments to payees, and allow SSA
to
maintain the most up-to-date information in its data bases.
SSA COMMENT
Recommendation 6.D. -- SSA does not agree
that it should tailor the accounting forms so that questions focus
on events that payees commonly fail to report. SSA believes that
events affecting eligibility/entitlement should be reported as
they occur. There are programs in place which are designed to identify
individuals who are no longer eligible/entitled to receive payments.
Moreover, SSA’s use of questions designed to capture specific
reporting events confused payees, causing forms to be rejected
from automated processing.
OIG RESPONSE
We believe that it is appropriate to tailor
the accounting forms to focus on specific events. The inclusion
of such questions on the form could significantly reduce many
problems we identified, including reducing overpayments that
result from failure to report events that affect eligibility.
Including questions to capture specific reporting events would
enhance SSA’s ability to identify such events by reaching
individuals who might otherwise be missed by SSA’s recontact
programs. We believe that payees would not be confused by such
questions if they were properly worded.
For agencies, institutions, and volume payees,
we recommend that:
6.E. SSA should send a single request
to each payee for all beneficiaries that SSA wishes to
receive information. Instead of processing thousands of forms
for a
specific organization, SSA would need to process no more
than 12--1 per month--each year.
6.F. For each beneficiary, SSA should
request the amount of benefits received, the conserved
funds balance, and whether the beneficiary`s custody has
changed. Our findings suggest that inadequate record keeping
often is
an initial indicator of greater problems. SSA could compare
responses regarding funds received to amounts SSA disbursed.
6.F.1. If these amounts do not
coincide, SSA should review the organization on-site.
6.G. SSA should allow payees to submit
responses electronically. Many payees representing multiple
beneficiaries have sophisticated computerized financial
management systems. These systems could transmit information
to SSA directly.
We identified problems mainly through the
use of in-person interviews and found that the current process
could not have identified many of these problems. For example,
we identified cases where payees did not have custody of the
beneficiary but reported that they did on the accounting form.
7.A. Therefore, SSA should review
both suspect cases and randomly selected cases from high-risk
payee categories (e.g., payees coded "other")
and determine if any action is necessary on the case.
SSA`s policies and procedures commonly
refer to this process as "representative payee accounting." However,
SSA freely acknowledges that the process is not, nor is it intended
to be, an accounting process. The result is that payees, beneficiaries,
advocacy groups, and even SSA staff are confused about the objectives
of the process. Although this change may seem minor, we believe
that it will fundamentally change perceptions of the process
from financial reporting to payee oversight.
We question the coding that SSA uses for
payees. In some cases (e.g., payees coded "other")
the coding is too general. In other cases (e.g., the various
types of institutions) the coding is too specific.
9.A. SSA should institute a workgroup
to explore if certain coding breakdowns are still necessary,
and what the appropriate coding should be.
9.B-D. At a minimum, we believe that
SSA should:
-- split the "other" coding
category to distinguish friends or other nonprofessional
individuals from lawyers and payees with professional relationships
with beneficiaries;
-- group some of the institution coding--the
number of possible codes tends to confuse rather than provide
meaningful distinctions between the various institutions;
and
-- differentiate between agencies that
may or may not have custody (e.g., social service agencies)
from agencies that have legal but not physical custody (e.g.,
foster care agencies).
10.
Review Previous HHS/OIG and SSA/OIG Recommendations Related to
Representative
Payment to Determine if Additional Benefit Could be Gained
From These Recommendations
In our early reviews of the process, we
made several recommendations intended to improve overall efficiency
and effectiveness. Although SSA did take steps to implement many
of these recommendations, we believe that, in the process of
redesigning aspects of the process, some further attention should
be given these recommendations. Some recommendations that we
believe SSA may want to revisit include:
10.A. SSA should have WBDOC share
more information on systems exceptions with processing
centers and field offices;
10.B. WBDOC should manage the entire
accounting review process and refer to field offices only
those cases that require face-to-face contact with payees; and
10.C. SSA should resolve the incorrect
coding of payee type highlighted in this and previous reports.
(We believe that our findings and recommendations, in total,
provide substantiation for complete, accurate, and consistent
information for all payees.
10.D. We also believe that SSA should
include system improvements in its automated systems designed
to cross-check data in order to increase its accuracy.)
These recommendations provide a "blueprint" for
improving the annual review process. We remain committed
to improving this process and are willing to work with SSA in
its efforts to develop the specifics necessary to carry out
these recommendations.
DEPARTMENT OF HEALTH AND HUMAN
SERVICES`
OFFICE OF THE INSPECTOR GENERAL
AND
SOCIAL SECURITY ADMINISTRATION`s
OFFICE OF THE INSPECTOR GENERAL
REPRESENTATIVE PAYMENT REPORTS:
EXECUTIVE SUMMARIES
The following pages contain the purpose, findings,
conclusion, and/or recommendations for the key representative payee
reports the Department of Health and Human Services` Office
of Inspector General and Social Security Administration`s (SSA)
Office of the Inspector General produced during the 1990`s.
Our earlier reports are based on the data contained in SSA`s
data bases. Our later reports are based on our data.
REVIEW
OF PROCEDURES RELATING TO REPRESENTATIVE PAYEES (A-07-90-00266/FEBRUARY
1991)
PURPOSE
To determine whether SSA`s procedures
provide adequate assurance that representative payees properly
use Social Security benefits on behalf of beneficiaries.
CONCLUSION
Our review showed that representative payee
reports are administratively burdensome to SSA, the financial data
on the reports is of little value in detecting misuse of benefits,
procedures do not ensure selection of qualified payees, and a system
deficiency causes some payees to be omitted from the report mailing
lists. Specifically we found:
1. The annual accountability report format
is overly complex, causing payees to provide answers which are
excepted by the optical scanner. Excepted reports require burdensome
manual processing.
2. While financial data on the accountability
reports can indicate situations of potential misuse, SSA does
not perform sufficient analysis to identify suspicious reports
for additional review. Further, information is accepted as reported.
There is no verification of the reported data.
3. Amount of funds conserved from the prior
accounting period was not being imprinted on the accountability
report, thereby preventing SSA from monitoring conserved funds
balances from potential misuse. The cause was a computer system
deficiency.
4. The basis for selecting a representative
payee is the information supplied by a prospective payee on the
application form. The servicing office evaluation of that information
and the selection decisions are not documented in the claims
folder. Without documentation, there is no assurance that selection
was based on adequate evaluation of qualifications.
5. Representative payee coding was not always
annotated on the Master Beneficiary Records (MBR) of certain
beneficiaries over the age 18. As a result, representative payees
for these beneficiaries did not report as required because they
were omitted from the mailing of accountability report forms.
RECOMMENDATIONS
Review the accountability report to identify
areas where it can be simplified to reduce errors by representative
payees and facilitate processing.
Review accountability reports to identify
aberrant or high risk representative payees and verify the information
reported. In addition, a randomly selected number of all accountability
reports could be selected for verification.
Record the amount of conserved funds reported
by representative payees on the subsequent accountability reports.
This information is necessary to assure that conserved funds
are transferred to either the new payee or beneficiary`s
estate when appropriate, and to help evaluate whether funds were
properly used.
Review the procedures used by field offices
to evaluate the qualifications of prospective representative
payees to ensure they are adequate. The procedures should include
documented interviews with prospective payees.
Enter representative payee coding on the
MBR for all beneficiaries over age 18 when benefit payments are
paid to another person. This coding would provide assurance that
the representative payees are receiving accountability reports
for title II benefits.
To describe representative payees serving
multiple Social Security beneficiaries.
FINDINGS
"Other" Payees Serving Multiple
Beneficiaries are Few in Number
Only 2.4 percent of payees coded "other" serve
more than two beneficiaries. Payees serving very large numbers
of beneficiaries are concentrated in Michigan.
Most are Professionals Serving in an
Official Capacity
Payees coded "other" are mostly
guardians, attorneys, licensed residential facilities, and agencies.
Most are miscoded or inappropriately coded "other." Most
are monitored by courts and other agencies. Most report they contact
beneficiaries regularly. Most payees report they communicate effectively
with other professionals and with SSA on the beneficiaries` behalf.
Problem Payees Were Identified, But
Are Small in Number
RECOMMENDATIONS
SSA should resolve the incorrect coding
of payee type highlighted in this and previous reports.
SSA should develop a coding scheme for
type of payee that is more useful in monitoring payees.
SSA should contact the payees who did
not respond to this survey to determine their continued suitability.
MONITORING
REPRESENTATIVE PAYEE PERFORMANCE: EFFECTIVENESS AND EFFICIENCY
OF THE ACCOUNTING REVIEW PROCESS (OEI-09-92-00851/JUNE 1994)
PURPOSE
The inspection analyzed the effectiveness
and efficiency of SSA`s representative payee accounting review
process.
FINDINGS
The Accounting Review Process May Deter,
But Rarely Detects, Misuse of SSA Benefits
The current process cannot be relied upon
to detect misuse or questionable performance because data on the
accounting forms are self-reported by payees. Although a more labor-intensive
process may be needed to detect misuse, the administrative costs
would far outweigh the results.
Duplication of Staff Effort is Inherent
in the Current Accounting Review Process
The Wilkes-Barre Data Operations Center (WBDOC)
staff initially call payees to complete any blank responses. The
processing centers and field offices also contact payees by telephone
or mail to verify and correct inaccurate responses.
SSA Staff are Frustrated by Large Workloads
and the Time Needed to Resolve Questionable Accounting Forms
Workloads for payee accounting are large,
and they increase each year. In Fiscal Year (FY) 1993, WBDOC
received and processed approximately 4.2 million forms, a
13.5 percent increase over FY 1992. Staff also are frustrated
with the time needed to clear both systems and unresolved exceptions
and contact nonresponders. Often, it takes more than a year to
resolve exceptions.
Some Processing Centers and Field Offices
Have Developed Creative Ways to Eliminate Duplication and Streamline
the Process
Some processing centers and field offices
have streamlined the paper flow and decreased the processing time
by: (1) mailing call-in cards to payees; (2) standardizing form
letters, such as close-out letters that mention possible suspension
of benefits; and (3) developing a regional operations bulletin
to supplement SSA policy.
Despite Improvements, the Accounting
Forms are Still Difficult to Understand, Cause Exceptions,
and are Not Appropriate for Some Institutionalized Beneficiaries
While SSA has improved the accounting forms,
the questions still may be too difficult for most payees to understand.
RECOMMENDATIONS
The findings in this report reaffirm the need
to conduct the additional inspections on assessment of risk, payee
programs of other Federal and State agencies, and best practices
of advocacy groups and private organizations. However, prior to
the completion of such studies, SSA should consider the following
short-term recommendations:
Ø SSA should have WBDOC share more information
on systems exceptions with processing centers and field offices
If WBDOC shared the initial computer analysis,
the processing centers and field offices could access the data
to identify systems exceptions quickly and decide what actions
should be taken.
SSA should revise the SSA-623 accounting
forms to:
make its language comparable to the
SSA-6230, the form used by payees for child beneficiaries;
include the total yearly benefits clearly
on the form; and
tailor a different form for some types
of payees, especially those who are payees for institutionalized
beneficiaries.
Ø SSA should share information with WBDOC,
processing centers, and field offices on the duties and responsibilities
of all components involved in the accounting review process
By sharing information, staff involved in
accounting review will better understand each component`s responsibilities.
DEMOGRAPHICS
OF BENEFICIARIES WITH REPRESENTATIVE PAYEES: ADULT BENEFICIARIES
(OEI-09-92-00855/MARCH 1994)
PURPOSE
This inspection analyzes the demographics
of adults with representative payees.
FINDINGS
More Than Two-thirds of Adults With
Payees are Under the Age of 65
Younger adults (ages 18 to 64) are more likely
to have payees than older adults (age 65 or older) because most
younger adults` entitlement is based on disability rather than
retirement.
Adult Supplemental Security Income (SSI)
Beneficiaries are Six Times More Likely to Have Payees Than
Adult Old-Age, Survivors and Disability Insurance (OASDI) Beneficiaries
This is because a much greater portion of
adult SSI beneficiaries are disabled.
One-fifth of Younger Adults With Payees
Receive Both OASDI and SSI Benefits
More than half of beneficiaries who receive
both OASDI and SSI are adults who were disabled as children.
One-tenth of SSI Younger Adults Receive
Less Than $200 Per Month in Benefit Payments
In the extreme case, 6.2 percent of younger
adults with only SSI receive $30 or less per month.
The Percent of Disabled Adults Who Have
Payees Varies by Disabling Condition
Beneficiaries with mental disorders, especially
mental retardation, are more likely to have payees than all other
disabled beneficiaries combined.
Living Situations Differ Between Younger
Adults and Older Adults With Payees
While younger adults are more likely to live
with relatives, older adults are more likely to live in institutions.
The OASDI Older Adults are Much Less
Likely to Have Payees Than OASDI Younger Adults
Approximately 1.8 percent of OASDI older adults
have payees compared to 11.6 percent of younger adults.
DEMOGRAPHICS
OF BENEFICIARIES WITH REPRESENTATIVE PAYEES: CHILD BENEFICIARIES
(OEI-09-92-00856/MARCH 1994)
PURPOSE
This inspection analyzes the demographics
of children with representative payees.
FINDINGS
Two-thirds of OASDI Beneficiaries With
Payees and One-third of SSI Beneficiaries With Payees are Under
Age 18
This is because more than 99 percent of children
have payees, compared with 4 percent of OASDI adults and 22 percent
of SSI adults.
The Number of SSI Children With Payees
Has Nearly Tripled in 4 Years
In contrast, the number of OASDI children
with payees increased only 11.6 percent between December 1989 and
January 1994. The dramatic increase in the number of SSI children
appears to be due to the 1990 U.S. Supreme Court decision, Sullivan
v. Zebley, 493 U.S. 521, and the resulting regulations.
Parents are Payees for More Than 80
Percent of Children
Parents and other relatives serve as payee
for, and have custody of, almost all OASDI and SSI children.
One-fifth of OASDI Children With Payees
Receive Less Than $100 Per Month in Benefit Payments
In the extreme case, 1.4 percent of OASDI
children receive less than $10 per month.
DEMOGRAPHICS
OF BENEFICIARIES WITH REPRESENTATIVE PAYEES: SSI DRUG ADDICTS
AND ALCOHOLICS (OEI-09-92-00857/JUNE 1994)
PURPOSE
This inspection analyzes the demographics
of SSI drug addicts and alcoholics (DA&A) with representative
payees.
FINDINGS
The Number of SSI DA&As Has Increased
Dramatically During the Past Decade
The number of DA&As increased from 4,021
beneficiaries in December 1984 to 78,310 beneficiaries in
December 1993. Furthermore, almost one-half of all DA&As live
in two states: California and Illinois.
One-third of Payees for SSI DA&As
are Coded "Other"
Payees coded "other" include, but
are not limited to, friends, acquaintances, and professionals such
as attorneys. These payees may be at higher risk of misusing benefits
than parents, other relatives, or institutions. In contrast to
SSI DA&As, only one-tenth of all SSI younger adults (ages 18
to 64) have payees that are coded "other."
One-fifth of SSI DA&As are Concurrently
Entitled to SSI and OASDI
Approximately 16,810 DA&As are concurrently
entitled, receiving both SSI and OASDI benefits.
Nearly One-half of Concurrently Entitled
DA&As Receive OASDI Directly Rather Than Through Payees
Of the 7,460 DA&As, 2,940 receive OASDI
payments directly that are at least 4 times the SSI payments that
are made on their behalf to payees. On average, these DA&As
receive $467 per month to spend as they wish. Overall, 82.3 percent
of DA&As (6,140) who receive OASDI directly receive larger
OASDI payments than SSI payments.
CONCLUSION
The dramatic increase in the number of DA&As,
the payees that are coded "other," and the direct OASDI
payments to DA&As present serious challenges to SSA`s representative
payee program. We will continue to work with SSA on various studies
that should provide useful information and present options for
addressing the problems specific to the DA&A populations.
MONITORING
REPRESENTATIVE PAYEE PERFORMANCE: ACCOUNTING REVIEW PROCESS AT
THE WILKES-BARRE DATA OPERATIONS CENTER (OEI-09-92-00858/JUNE
1994)
PURPOSE
This inspection analyzed SSA`s representative
payee program accounting review process at WBDOC.
FINDING
Some Aspects of the Current Accounting
Review Process are Duplicative, Inefficient, and Costly
The processing centers and field offices duplicate
the WBDOC process by reviewing and analyzing the accounting forms
before contacting payees to resolve exceptions.
For FY 1993, field offices cost 60.7 percent
more and program service centers, which are part of the processing
centers, cost 17.1 percent more than WBDOC. WBDOC averaged $27,942
per workyear, while field offices averaged $44,900 and the program
service centers averaged $32,716.
RECOMMENDATIONS
WBDOC should manage the entire accounting
review process and refer to field offices only those cases that
require face-to-face contact with payees
SSA would save as much as $5.7 million annually
by transferring most of the routine functions from the processing
centers and field offices to WBDOC. The processing centers` role
would be reduced to processing actions such as suspensions, reinstatements,
and adjudicative decisions.
SSA should examine the cost-effectiveness
of optical scanning technology for the accounting review process
Although the use of a more sophisticated scanner
may improve the recognition of handwritten characters, WBDOC staff
may still need to manually review accounting forms.
CONCURRENTLY
ENTITLED SSA BENEFICIARIES WITH REPRESENTATIVE PAYEES (OEI-09-92-00859/JUNE
1995)
PURPOSE
This report reviews SSA`s accounting and
data collection efforts for beneficiaries who: (1) have representative
payees; and (2) are concurrently entitled to SSI and OASDI benefits.
FINDINGS
More Than 50,000 Concurrently Entitled
Beneficiaries With Payees Have Differing Payee Arrangements
Approximately 10 percent (more than 50,000)
of concurrently entitled beneficiaries with payees have payees
for only one program or different payees for both programs. These
arrangements are of special concern to SSA because they may impact
the accounting system`s effectiveness and increase administrative
burdens.
SSA Does Not Account for $57 Million
in Annual OASDI Benefits Managed by Payees
Because of SSA`s current procedures, many
payees do not receive annual accounting forms. If beneficiaries
do not have payees for their SSI benefits, SSA does not send an
accounting form to their OASDI payees. These beneficiaries receive
$42.6 million in annual OASDI benefits. If beneficiaries have different
payees for OASDI and SSI, the SSI payees cannot account for the
OASDI benefits and the OASDI payees do not receive accounting forms.
These beneficiaries receive $14.5 million in annual OASDI benefits.
SSA Staff Initiate More Than 32,000
Extra Mail, Telephone, and In-person Contacts Each Year
SSA procedures require that payees account
for at least 90 percent of the total amount paid on behalf of the
beneficiaries. If payees are unaware of how other payees or the
beneficiaries spend the remaining benefits--which is the case for
32,640 beneficiaries--payees fail to meet the 90 percent threshold.
SSA must contact these payees for additional information.
SSA Data Bases Contain Inaccurate Type
of Payee and Custody Coding
One-fifth of concurrently entitled beneficiaries
have an inaccurate type of payee code and one-third have an inaccurate
custody code in the MBR and/or Supplemental Security Record (SSR).
Accurate data are essential if SSA chooses to develop an accounting
system based on relative payee risk.
RECOMMENDATIONS
SSA should assure that the same payee
is selected for both programs unless the case meets the compelling
reasons test.
We suggest a couple of options SSA can pursue
to assure the selection of the same payee:
Apply the "compelling reason" test
during SSI redeterminations.
Replicate the methods we used in this
inspection to identify the remaining beneficiaries with differing
payee arrangements.
SSA should send an accounting form to
all payees
In those cases where SSA finds compelling
reasons to select two different payees or a payee for only
one program, it should send an accounting form to all payees
managing
benefits.
Other matters of concern: data accuracy
Accurate data are essential if SSA chooses
to modify the accounting system based on the findings from our
inspection on risk assessment, which is now underway. We offer
the following options if SSA chooses to address the issue prior
to the completion of the risk inspection:
matching records between the MBR and
SSR to identify and eliminate inconsistencies;
asking payees to describe their relationships
to beneficiaries on all forms mailed to payees and compare
these responses to current data, or
verifying and updating all information
concerning payees whenever SSA staff make changes or additions
to beneficiaries` records.
MONITORING
REPRESENTATIVE PAYEE PERFORMANCE: MISUSE OF BENEFITS (A-09-96-64203/SEPTEMBER
1996)
PURPOSE
This inspection determined the relative risks
of misuse and/or questionable use of Social Security benefits by
category and type of representative payee.
FINDINGS
Misuse or Questionable Use of Benefits
Exists in 1.1 Percent of All Cases in Which Beneficiaries Have
Payees
We found that 1.1 percent of beneficiaries
have payees who misused benefits, used benefits in a questionable
manner, or gave indications that misuse or questionable use of
benefits occurred. These payees (hereinafter called potential misusers)
managed an average of $2,889 in benefits--$12.9 million total--during
the October 1993 to September 1994 report period.
The Number and Frequency of Misuse or
Questionable Use Cases Vary by Type of Payee
Parents, who represent the largest group of
payees (68.8 percent of the payee universe), are most likely to
be potential misusers based on volume (63.6 percent of all potential
misusers). Payees coded "other" are most likely to be
potential misusers based on frequency--1.1 percent of the
universe are potential misusers while 3.0 percent of payees coded "other" are
potential misusers.
Two Main Characteristics are Associated
With Potential Misusers
We found that two main characteristics--failing
to complete annual accounting forms and falsifying custody information--are
associated with potential misusers, while many characteristics
believed to be associated with potential misusers are not (e.g.,
payees with limited income).
CONCLUSION
From the 4,454 cases of misuse and/or questionable
use of benefits that interviewers identified, we found that certain
types of payees are more likely to be potential misusers. Two of
the stronger indications of misuse or questionable use of benefits
appear to be payees who: (1) do not complete accountings for
benefits received; and (2) falsify information about the custody
arrangement of beneficiaries.
MONITORING
REPRESENTATIVE PAYEE PERFORMANCE: THE ACCOUNTING FORM (A-09-96-64204/JANUARY
1997)
PURPOSE
This report identifies the types, frequencies,
and causes of representative payee generated exceptions to SSA`s
annual accounting forms.
FINDINGS
Approximately 86 Percent of Payees Responded
to Mailed Accounting Requests
While more than 75 percent of payees responded
to the first accounting request and 10 percent responded to
the second accounting request, more than 14 percent of payees had
to be contacted directly regarding completion of the accounting
forms.
More Than 35 Percent of Responders Completed
Accounting Forms in a Manner That Produced Exceptions
Common exceptions included: (1) failing to
account for 90 percent of the total accountable amount; (2) providing
relationship information that did not correspond to SSA`s data
bases or failing to answer the relationship question; (3) stating
that the beneficiary had changed custody during the report period;
and (4) payees stating that they did not decide how all benefits
were spent or saved.
Payees Expressed Difficulties in Completing
the Accounting Forms
Incorrect responses were often the result
of payees` confusion. This confusion may be the result of payees`:
(1) limited understanding of the accounting process and their responsibilities;
(2) difficulty understanding what specific questions are asking;
or (3) failure to maintain information necessary to complete
the accounting forms.
Exception Rates Vary by Accounting Form
Payees completing the SSA-6230 (parents, stepparents,
and grandparents with custody of title II child beneficiaries)
were less likely to produce exceptions than payees completing the
SSA-623.
CONCLUSION
Although the majority of payees respond to
mailed accounting requests, SSA still must contact a large number
of payees directly. Some contacts are to obtain missing or incomplete
responses, while others are to clarify payees` responses. Many
of the latter contacts are necessitated by payees` confusion
over completing the accounting forms. SSA`s efforts to make
the SSA-6230 a simpler and more direct form have proven successful,
with payees completing the SSA-6230 generating fewer exceptions
than payees completing the SSA-623.
This report describes the frequency and characteristics
of payees who exhibit poor performance.
FINDINGS
Poor Performance Exists in 2.9 Percent
of All Cases in Which Beneficiaries Have Payees
Examples of poor performance include, but
are not limited to, failure to perform payee duties and responsibilities,
acting merely as a conduit for benefits rather than overseeing
the use of benefits, and payees acting in an elusive, uncooperative,
or vague manner. We also found that 1.5 percent of beneficiaries
have payees who exhibit other forms of questionable performance,
but interviewers were unable to determine if poor performance exists
because they could not collect sufficient information to make a
determination.
Poor Performance Varies by Type of Payee
and Custody Arrangement
The frequency of poor performing payees varies
depending on the relationships between payees and beneficiaries.
For example, payees coded "other" account for 3.4 percent
of the universe but 13.4 percent of poor performing payees. Payees
without custody account for only 14.1 percent of the universe but
33.8 percent of poor performing payees.
Selected Characteristics Help Detect
Poor Performing Payees
Although many general characteristics of poor
performing payees largely reflect the payee universe, selected
characteristics vary between these two groups. For example, poor
performing payees are more likely to provide no accounting of benefits,
express that they would rather not remain payee, or have been convicted
of a felony.
CONCLUSION
Poor payee performance impacts the effectiveness
of the payee program. Payees who fail to fulfill their responsibilities
create overpayments or do not ensure that beneficiaries receive
proper care. Conduit payees eliminate the payee "safeguards" of
the program. Payees who act in a vague, uncooperative, and elusive
manner increase the burden on SSA to determine if beneficiaries
are receiving proper care. Our findings suggest that targeted reviews
of selected payees, especially those who do not respond to requests
for accountings, may identify poor performing payees.
MONITORING
REPRESENTATIVE PAYEE PERFORMANCE: DEMOGRAPHIC CHARACTERISTICS
OF PAYEES
(A-09-96-64206/SEPTEMBER 1996)
PURPOSE
This report describes the demographic characteristics
of representative payees who received initial accounting forms
in October 1994.
FINDINGS
Payees are Usually Unemployed, Moderately
Educated, Middle-aged Relatives
We found that most payees have custody of
beneficiaries, and payees have known their beneficiaries an average
of 18 years.
Few Payees Exhibit Characteristics That
Should Automatically Exclude Them From Serving as Payees
Although 1.0 percent of payees have been convicted
of a felony or a misdemeanor reduced from a felony, none of the
payees in our sample had been convicted of Social Security fraud.
Most Payees are Willing to Serve as
Payees
Most payees want to continue as payee for
their beneficiaries. Payees often stated their own advancing age,
poor health, or other personal commitments as reasons for not wanting
to continue as payees.
Almost One-half of Payees Have Served
as Payee for More Than One Beneficiary
We found that 46.9 percent of all payees had,
at one time, served as payees for beneficiaries other than those
in our sample. For payees who served more than one beneficiary
between October 1993 and September 1994, individuals averaged
2.0 beneficiaries, while institutions and agencies averaged
163.5 beneficiaries.
Interview Data Differed From Data Contained
in SSA`s Data Bases
We found that more than: (1) 223,000 beneficiary
records contain incorrect type of payee data; (2) 100,000 beneficiary
records for beneficiaries with the same payees have inconsistent
type of payee data; and (3) 422,000 beneficiary records contain
incorrect custody data.
CONCLUSION
Most payees are relatives willing to accept
the challenge of being payees and many represent more than one
beneficiary. Most payees also are willing to speak about their
experiences, and few exhibit characteristics that automatically
raise concern.
An area that continues to concern OIG is that
SSA’s data is incorrect and incomplete. We have recommended
previously that SSA improve its data related to payees and beneficiaries.
Since this report is one in a series of reports designed to improve
the entire accounting process, we have chosen to avoid further
recommendations about SSA’s data until we have completed the
series of reports. We will make comprehensive recommendations on
all areas related to the payee accounting process when we have
completed our work.
MONITORING
REPRESENTATIVE PAYEE PERFORMANCE: THE NEED FOR PAYEES--DEMOGRAPHIC
CHARACTERISTICS OF BENEFICIARIES (A-09-96-64207/SEPTEMBER 1996)
PURPOSE
This report describes the demographic characteristics
of beneficiaries with representative payees scheduled to receive
initial accounting forms in October 1994.
FINDINGS
Beneficiaries With Payees Need Assistance
Managing Their Financial Affairs
Payees and beneficiaries agree that beneficiaries
lack the capability to manage their own financial affairs. Approximately
82 percent of payees for beneficiaries over age 15 believe that
beneficiaries still needed payees. More than 65 percent of the
interviewed beneficiaries do not believe that they could manage
their own benefits.
Beneficiaries` Need for Payees Varies
by Type of Payee and Custody Arrangement
Beneficiaries` circumstances and the need
for payees varied among the beneficiaries. Parents with custody
primarily represent minor children whom SSA requires to have payees.
Parents without custody primarily represent adults who usually
require payees due to a disabling condition. Beneficiaries in the
custody of agencies are often children. Beneficiaries in
the custody of institutions are almost never children. More
than 60 percent of SSA`s institutionalized beneficiaries
are medically or physically incapacitated.
Payees Play an Essential Role in the
Lives of Beneficiaries
Payees play a larger role in the beneficiaries` lives
than merely managing title II and title XVI benefits. Payees
often manage other income or act as legal guardians. Many payees
mentioned that they include beneficiaries in the decision-making
process to give beneficiaries more control over their lives or
to assist them in becoming more independent.
Payees Mentioned Few Problems Presented
by Beneficiaries
More than 90 percent of beneficiaries do not
cause problems according to payees. Payees who mentioned problems
also stated that such behavior is expected due to beneficiaries’ conditions
or is not sufficient to make them wish to stop being payees for
the beneficiaries.
CONCLUSION
Our report affirms the belief that payees
play a vital role in the lives of beneficiaries. Almost 80 percent
of beneficiaries cannot manage their own financial affairs because
of their age or severe mental and/or physiological limitations.
Of the remaining 20 percent, few beneficiaries demonstrated the
skills necessary to manage their own financial affairs. Payees
not only fill this vital need, but many do far more. Approximately
28 percent of beneficiaries have no one other than the payees interested
in their well being or willing to act on their behalf.
This report identifies how many representative
payees did not respond to requests for an annual accounting of
benefits for the report period October 1993 through September 1994.
FINDINGS
SSA Does Not Receive an Accounting for
Approximately $1.2 Billion in Annual Benefits
We found that SSA had not received approximately
316,000 accounting forms from payees between October 1994 and October
1995. These payees receive approximately $1.2 billion in benefits
on behalf of beneficiaries. Annual benefits for nonresponding payees
averaged $3,934, with almost 74 percent managing between $1,200
and $7,200 during the report period.
SSA Does Not Maintain Systematic Information
About Nonresponding Payees
SSA`s present computerized file does not
retain any history of payees` return of accounting forms. Payees
who fail to respond to the accounting process receive no further
centralized systematic scrutiny after 1 year has elapsed. SSA overwrites
the computerized file of nonresponding payees when it mails accounting
forms for the following year.
Nonresponding Payees are Usually Relatives
With Custody
Approximately 76 percent of nonresponding
payees are parents and other relatives with custody of the beneficiaries.
We found that the greatest number of nonresponding payees live
in States with large general populations (California, New York,
Texas, and Florida), while Puerto Rico, with a relatively small
general population, also has a large number of unreturned accounting
forms.
Agencies and Institutions are the Most
Common High-Volume Nonresponding Payees
We found 12 instances in which agency or institutional
payees did not return 10 or more accounting forms. The number of
unreturned forms for each payee ranged from 10 to 56, with an average
of 18.2 forms. Approximately 74 percent of all nonresponding agency
or institutional payees have custody of beneficiaries.
RECOMMENDATION
SSA should develop an improved system
for tracking nonresponding payees
Since the present system does not have any
history of nonresponding payees, we suggest that SSA maintain
data on nonresponding payees that it currently overwrites. We
also suggest that, as a means to develop a more complete and
effective tracking system, SSA:
Determine why selected payees (e.g.,
high-volume agency or institutional payees and payees in Puerto
Rico) fail to complete accountings.
Determine whether field office or processing
center staff are properly processing the nonresponder alerts.
Develop a more immediate and appropriate
method (e.g., suspension of benefits, immediate change of payee
with final accounting by former payee) to be used in conjunction
with the tracking system to obtain accountings. Additionally,
SSA should annotate the Master Representative Payee File to
indicate that the payee failed to respond to a request for
accounting and should not be considered as payee for other
beneficiaries.
MONITORING
REPRESENTATIVE PAYEE PERFORMANCE: THE ACCOUNTING REVIEW PROCESS
(A-09-96-64209/JANUARY 1997)
PURPOSE
This report evaluates the effectiveness and
efficiency of SSA`s representative payee accounting review
process.
FINDINGS
The Accounting Review Process is Not
Effective or Efficient in Identifying Problems
The accounting review process rarely detects
poor performance or misuse and/or questionable use of benefits,
and the information that SSA does collect comes as the result of
extensive administrative effort.
The Felony Question Produces Limited
Results
The 703 payees who stated that they had been
convicted of a felony misunderstood the question or believed that
it referred to the beneficiary. Since few payees have ever been
convicted of a felony, it is unlikely that this question will produce
significant results.
The Accounting Review Process Does Not
Address Problems With Titles on Financial Accounts
Information collected during interviews with
payees suggests that many use improperly titled accounts to hold
beneficiaries` benefits, but SSA`s current procedures do
not attempt to identify this problem in most cases.
CONCLUSION
Problem cases often are not identified through
the accounting review process. SSA expends extensive administrative
effort to discover that many exceptions are the result of confusion
and misunderstanding rather than actual status changes. Some questions,
such as the felony question, produce virtually no results, while
other questions, such as those about financial account titles,
do not identify the true magnitude of the problem.
REPRESENTATIVE
PAYEE ACCOUNTING: SYSTEMS ISSUES (A-13-96-52002/SEPTEMBER 1996)
PURPOSE
This report describes deficiencies with SSA`s
computerized data systems used to select and produce representative
payee accounting forms.
FINDINGS
The Accounting System Generates Forms
Incorrectly
The Accounting System Fails to Properly
Adjust to Situations Involving Beneficiaries Concurrently Entitled
to Social Security and Supplemental Security Income Benefits
The Accounting System Generates Forms
With Incorrect or Incomplete Information
RECOMMENDATION
SSA should correct the deficiencies
in the automated data systems that it uses to select and produce
the representative payee accounting forms
If the identified deficiencies are not addressed,
the accounting system will continue to generate forms incorrectly,
fail to properly address concurrently entitled beneficiaries,
and generate forms with incorrect or incomplete information.
Therefore, we recommend that SSA make needed systems changes.
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