SOCIAL SECURITY ADMINISTRATION

SOCIAL SECURITY ADMINISTRATION
FIELD OFFICES' MANAGEMENT OF
ALLEGATIONS

September 2008

A-13-08-18030

AUDIT REPORT

Mission

By conducting independent and objective audits, evaluations and investigations, we inspire public confidence in the integrity and security of SSA's programs and operations and protect them against fraud, waste and abuse. We provide timely, useful and reliable information and advice to Administration officials, Congress and the public.

Authority

The Inspector General Act created independent audit and investigative units, called the Office of Inspector General (OIG). The mission of the OIG, as spelled out in the Act, is to:

Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.

To ensure objectivity, the IG Act empowers the IG with:

Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.

Vision

We strive for continual improvement in SSA's programs, operations and management by proactively seeking new ways to prevent and deter fraud, waste and abuse. We commit to integrity and excellence by supporting an environment that provides a valuable public service while encouraging employee development and retention and fostering diversity and innovation.

MEMORANDUM

Date: September 15, 2008

To: The Commissioner

From: Inspector General

Subject: Social Security Administration Field Offices' Management of Allegations (A-13-08-18030)

OBJECTIVE

Our objective was to assess the Social Security Administration's (SSA) management of allegations we referred to its field offices (FO) for review. Specifically, we evaluated the sufficiency and reliability of documentation supporting the FO's conclusions, recommendations, and/or decisions concerning the allegations.

BACKGROUND

We conduct and coordinate investigations related to SSA programs and operations. Allegations concerning fraud or abuse are frequently made to our Allegation Management Division (AMD) using various methods. For example, the Agency's toll-free "hotline" telephone service, mail, and Internet/email are used to report alleged fraud or abuse directly to AMD.

AMD determines an appropriate course of action to resolve the allegation, including referring the allegation to one of the Agency's FOs for further development. Development includes, but is not limited to, actions to determine whether allegations can be substantiated. SSA policies and procedures provide guidance for the appropriate development activities to complete.

Examples of the types of allegations AMD forwards to the FOs include concealment of work, assets, living arrangements, and resources; representative payee misuse; and fraudulent Social Security number applications. After reviewing and developing the allegation, the FOs are required to respond to AMD with a disposition indicating the allegation was substantiated, unsubstantiated or referred to a different FO for development.

We obtained an electronic data extract of FO dispositions. The dispositions pertained to allegations AMD received from the public from January 1 through May 31, 2007 that were referred to FOs for further development. For these allegations, the FOs returned 1,572 dispositions to AMD. Dispositions that involved allegations transferred from one FO to another were not included. Of theses dispositions, 1,042 were unsubstantiated and 530 were substantiated. We randomly selected and examined 100 dispositions: 50 unsubstantiated and 50 substantiated. We requested the FOs provide us documentation pertaining to the conclusions, recommendations, and/or decisions concerning the associated allegations. See Appendix B for our scope and methodology and Appendix C for our sampling methodology.

RESULTS OF REVIEW

Of 100 items reviewed, we found FOs did not provide sufficient and reliable documentation to support 36 percent of the dispositions examined. For 64 of the 100 items sampled, we found sufficient and reliable documentation to support the FOs' conclusions, recommendations, and/or decisions concerning the allegations. However, for those 36 items for which documentation did not exist, we received written explanation for 31 dispositions. Of these 31 items, we were able to perform additional analysis of SSA records to substantiate the disposition of 13. For the remaining 18 items, we could not independently substantiate the disposition for 15 items, and we questioned the disposition of 3. Furthermore, since the Agency did not provide documentation or explanations for 5 of the sample items we also question these dispositions. See Table 1.

Table 1: FO Dispositions

Type of Support Provided for 100 Dispositions Analysis of the 100 Dispositions

Sufficient and Reliable2
Analysis Substantiate3 Could Not Independently Substantiate4
We Questioned
Total
Documentation 64 64
No Documentation1
Written Explanation 13 15 3 31
No Support 5 5
Total 64 13 15 8 100
Note 1: Of the 36 "No Documentation" dispositions, we either could not independently substantiate the dispositions or questioned the dispositions made by the FOs for 23.
Note 2: The FOs provided various copies of signed forms, written statements, etc., to support the dispositions.
Note 3: The FOs provided written explanations to support the dispositions made for the associated allegations. Based on these explanations, we were able to identify actions SSA needed to take regarding the dispositions. We reviewed information recorded in SSA's Master Beneficiary Records, Supplemental Security Record, and/or Representative Payee System pertaining to these actions. We verified actions were taken as reported (for example, benefits were suspended, overpayments were recorded, etc.).
Note 4: Written explanations from the FOs were the only information available. These dispositions did not require that SSA take actions that would be reflected in its records and systems.

SUFFICIENT AND RELIABLE DOCUMENTATION SUPPORTING FO DISPOSITIONS WAS NOT ALWAYS PROVIDED

Sufficient and reliable documentation was not always provided to support dispositions made by FOs. We found FOs did not provide sufficient and reliable documentation to support 36 dispositions. FOs were inconsistent in providing us documentation to indicate actions taken by its staff to develop the allegations, including those actions taken to determine whether allegations could be substantiated.

Of the 100 dispositions reviewed, we found FOs had sufficient and reliable documentation to support 64. For example, we reviewed a disposition for an allegation involving a Supplemental Security Income (SSI) recipient's work concealment. The FO provided a copy of a signed statement from the employer that verified the recipient's concealed wages. In addition, documentation was provided that indicated the recipient told FO staff he was not aware of the requirement to report the wages to SSA. Based on this information, the FO determined the allegation was substantiated and posted a $4,293 overpayment on the recipient's record. As of April 8, 2008, SSA had recovered approximately $1,260 of the overpayment.

For the remaining 36 dispositions, FOs did not provide sufficient and reliable documentation on the actions its staff took to develop the allegations. Of the 36, FOs provided written explanations to support the conclusions, recommendations, and/or decisions concerning 31 dispositions. For the remaining five items, SSA provided neither documentation nor written explanations. Of the 31, we determined there was adequate information in SSA's records to support 13 dispositions. For the remaining 18 dispositions, we could not independently substantiate the dispositions because of a lack of sufficient, reliable documentation and/or corroborating evidence in SSA's records. Based on our review, we estimate there are approximately 1,052 allegation dispositions each year that cannot be independently substantiated (see Appendix C).

During our review, FOs did not consistently provide documentation to indicate the actions taken to develop the allegations. In response to our request, FOs provided various explanations for not providing us documentation supporting their dispositions. For example, staff at one FO reported documentation was not created in the development of the allegation; another FO employee explained documentation could not be located; and staff at several FOs reported documentation was forwarded to another location and was no longer available at the FOs.

We were unable to locate SSA policy that required that FO staff retain documentation supporting dispositions. Agency staff confirmed there was no policy. However, SSA policy does provide guidance for FOs when obtaining documentation in developing allegations. For example, in situations involving concealed work activity, policy states, "It is best to obtain the claimant's signature on a form such as the SSA-795 (Statement of Claimant or Other Person) when taking a statement in this situation…other evidence may include statements provided by co-workers, employers, or bills and receipts provided by customers or suppliers."

We believe SSA management should be able to verify whether FO staff complied with policies and procedures for the development and disposition of AMD-referred allegations. Further, Standards for Internal Control in the Federal Government, states "Transactions should be promptly recorded to maintain their relevance and value to management in controlling operations and making decisions." The guidance also states, "Internal control and all transactions and other significant events need to be clearly documented, and the documentation should be readily available for examination." The lack of documentation limits management's ability to determine whether appropriate actions were taken to resolve the allegation.

WE QUESTION SOME OF THE FOS' DISPOSITIONS

In addition to the five dispositions for which no documentation or explanation was provided, we also question the disposition of three of the items for which SSA provided explanations. As previously mentioned, the Agency provided written explanations for 31 items. Of this number, 13 dispositions were substantiated by analyzing data in SSA records. Of the remaining 18 items, we question the Agency's disposition of 3 because we believe additional actions could have been taken when SSA was developing these dispositions.

For example, one SSI recipient was allegedly concealing her living arrangements. The FO provided a written explanation stating the recipient neither showed up for any scheduled appointments nor returned any of the forms the Agency requested. Despite the recipient's noncompliance, the FO's disposition was that the allegation was "unsubstantiated - no action taken." Relying on the written explanation provided, we agree the FO followed Agency policy by attempting to contact the recipient. However, policy also states the FO could have suspended the SSI payments because the recipient failed to provide information.

We informed FO staff we believed the recipient's SSI payments could have been suspended because the recipient failed to provide information, and they agreed. The recipient's payments were suspended on March 7, 2008 pending an assessment to determine the recipient's continued eligibility for SSI payments. Subsequently, information was provided to the Agency and the suspension of payments ended.

The remaining two dispositions we questioned pertained to allegations involving either work concealment or concealment of financial resources. Regarding one disposition, FO staff could have contacted a third party to determine whether payment was made to the Title II beneficiary who was allegedly self-employed. Lastly, Agency staff could have attempted to contact other individuals mentioned in the allegation to determine whether the SSI recipient was married. Although the FOs provided us written explanations that indicated the two allegations were unsubstantiated, the explanations did not state how the FOs made these decisions. We believe if additional information had been obtained, it could have caused the FOs to reach different dispositions for the allegations. Staff agreed with our observations.

RECORDING ERRORS RESULTED IN MISCLASSIFICATION OF DISPOSITIONS

During our review, we identified two instances where recording errors occurred and therefore resulted in the misclassification of dispositions. However, we do not question the Agency's dispositions in these instances. Of the 100 dispositions reviewed, we found 2 recording errors that resulted in the FO misclassifying dispositions on the AMD allegation referral form. One of the dispositions was returned to AMD as unsubstantiated. However, the documentation provided by the FOs for this disposition indicated the allegation was substantiated. The remaining disposition was classified as substantiated; however, it should have been classified as unsubstantiated.

The disposition misclassified as unsubstantiated pertained to incarceration and work concealment allegations. During our review, the FO provided a written explanation indicating the allegation of incarceration was substantiated, and the claimant's benefits were suspended as a result. FO staff also explained "…employers denied the fact that … had ever worked for them." Based on the incarceration allegation results, the disposition should have been classified as substantiated.

The other disposition that was misclassified involved an allegation of work concealment. During our review, the FO was unable to provide any supporting documentation for the disposition. However, upon review of the claimant's record, we determined that the FO had in fact, found the allegation to be unsubstantiated. A remark on the beneficiary's record indicated the FO sent a Work Activity Report, Form SSA-820 to the beneficiary. The report was completed and returned to SSA. In the report the beneficiary indicated he was not working, and his fiancée owned the business in question. In addition, we did not find any evidence that additional actions were taken regarding the beneficiary.

CONCLUSION AND RECOMMENDATIONS

Of the 100 dispositions we reviewed, SSA did not provide sufficient and reliable documentation for 36 dispositions, and we performed additional analysis to substantiate 13. For the remaining 23, we could not independently substantiate 15; we questioned the disposition of 3 others; and there was no supporting documentation for 5.

There were also erroneous disposition codes for two other dispositions that we did not question. We recommend SSA:

1. Determine whether additional guidance is needed for FOs to consistently document activities and actions taken to develop allegations, and retain such documentation.

2. Record the appropriate disposition code on the AMD allegation referral form.

AGENCY COMMENTS

SSA agreed with our recommendations. See Appendix D for the full text of SSA's comments.

Patrick P. O'Carroll, Jr.

Appendices
APPENDIX A - Acronyms
APPENDIX B - Scope and Methodology
APPENDIX C - Sampling Methodology
APPENDIX D - Agency Comments
APPENDIX E - OIG Contacts and Staff Acknowledgments

Appendix A
Acronyms
AMD Allegation Management Division
FO Field Office
NICMS National Investigative Case Management System
POMS Program Operations Manual System
SSA Social Security Administration
SSI Supplemental Security Income


Appendix B
Scope and Methodology

To accomplish our objective, we:

Identified and reviewed applicable laws and regulations.
Identified and reviewed Social Security Administration (SSA) policies and procedures related to the management of allegations.
Reviewed prior Office of the Inspector General reports.
Coordinated with SSA personnel familiar with the allegation management process.
Reviewed allegation disposition-related information in SSA's Master Beneficiary Record, Supplemental Security Record, and Representative Payee System.
Obtained and analyzed an electronic data extract from the Office of Investigations' National Investigative Case Management System (NICMS). The data extract consisted of dispositions. The dispositions pertained to allegations received by our Allegation Management Division (AMD) from the public from January 1 through
May 31, 2007 that were referred to SSA's field offices (FO) for further development. For the allegations referred, the FOs submitted 1,572 dispositions to AMD.
Reviewed a random sample of 100 dispositions: 50 substantiated and
50 unsubstantiated. (See Appendix C for our Sampling Methodology.)
Requested the FOs provide us documentation pertaining to the conclusions, recommendations, and/or decisions concerning the dispositions being reviewed.

We determined the data used in this report were sufficiently reliable given our review objectives and intended use of the data. The electronic data used in our review were extracted from NICMS. We assessed the reliability of the electronic data by reviewing allegations in NICMS for all the data elements needed to meet our objective. We also traced information from the data extract to information recorded in the Master Beneficiary Record, Supplemental Security Record, and/or Representative Payee System. Finally, we conducted a trend analysis on additional months of NICMS data to verify the reasonableness of our data.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. We conducted our review between October 2007 and February 2008. The entity reviewed was the Office of the Deputy Commissioner for Operations.

Appendix C
Sampling Methodology
We obtained a data extract from the Office of Investigations' National Investigative Case Management System. The data extract consisted of dispositions. The dispositions pertained to allegations received by our Allegation Management Division (AMD) from the public from January 1 to May 31, 2007 that were referred to Social Security Administration (SSA) field offices (FO) for further development. Dispositions that involved allegations transferred from one FO to another were not included. Our population consisted of 1,572 dispositions.

From the population of dispositions, we identified two sampling frames: (1) dispositions returned as unsubstantiated and (2) those returned as substantiated. We identified 1,042 unsubstantiated dispositions and 530 substantiated dispositions. We randomly selected 100 dispositions: 50 from each sampling frame.

The 100 sample dispositions were sorted according to region and FO code and forwarded to the Office of the Deputy Commissioner for Operations for distribution to the appropriate FO. We requested copies of the documentation used to support each of the dispositions being examined. We reviewed the documentation provided by the FOs, and determined whether the documentation was sufficient and reliable to support the field offices' conclusions, recommendations, and/or decisions concerning the allegations. For dispositions that documentation was not provided, we also performed analysis to independently substantiate the written explanations provided by the FOs. For these dispositions, we reviewed information recorded in SSA's Master Beneficiary Record, Supplemental Security Record, and/or Representative Payee System pertaining to these actions. We determined whether actions were taken as reported. For example, benefits were suspended, overpayments were recorded, etc.

Based on our sample of 100 dispositions, we could not independently substantiate 23 dispositions because of a lack of sufficient, reliable documentation and/or corroborating evidence in SSA's records. Projecting these results to the population of dispositions returned to AMD for the 5-month period, we estimate there were approximately 438 FO dispositions that could not be independently substantiated.

We projected our results of 438 for the 5 month period and annualized it. We estimated for the calendar year, there were about 1,052 FO dispositions that could not be independently substantiated. We annualized our results because our 5-month period represented historical trends in monthly dispositions. The following table provides the details of our sample results, statistical projections and annual estimates.

Sample Results Where Dispositions Not Independently Substantiated For The 5-Month Period: Jan 1- May 31, 2007
Unsubstantiated Allegations Substantiated Allegations
Totals
Population Size 1, 042 530 1,572
Sample Size 50 50 100
Number of allegations where documentation was not retained
19 4 23
Attribute Projections for Dispositions Not Independently Substantiated
Point Estimate 396 42 438
Lower Limit 278 15
Upper Limit 525 90
Projections are made at the 90-percent confidence level.

Based on our projections during this 5-month period, we estimate FO dispositions could not be independently substantiated or the dispositions questioned for approximately 951 unsubstantiated dispositions, and 101 substantiated dispositions, during a given
12-month period.

Appendix D
Agency Comments

MEMORANDUM

Date: August 29, 2008

To: Patrick P. O'Carroll, Jr.
Inspector General

From: David V. Foster
Executive Counselor to the Commissioner

Subject: Office of the Inspector General (OIG) Draft Report, "Social Security Administration Field Offices' Management of Allegations" (A-13-08-18030)-- INFORMATION

We appreciate OIG's efforts in conducting this review. Attached is our response to the recommendations.

Please let me know if we can be of further assistance. Please direct staff inquiries to Ms. Candace Skurnik, Director, Audit Management and Liaison Staff, at (410) 965-4636.

COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL'S DRAFT REPORT, "SOCIAL SECURITY ADMINISTRATION FIELD OFFICES' MANAGEMENT OF ALLEGATIONS" (A-13-08-18030)

Thank you for the opportunity to review and provide comments on this draft report.

Recommendation 1

Determine whether additional guidance is needed for field offices (FOs) to consistently document activities and actions taken to develop allegations, and retain such documentation.

Comment

We agree. We are updating our Program Operations Manual System (POMS) section GN 04110.015, Developing Allegation Management Division (AMD) Referrals, to instruct employees on the proper procedures to develop allegations and document actions taken. We expect to release the revised section of POMS by October 31, 2008.

Additionally, in October 2007, we produced (with AMD) an Interactive Video Teletraining session on the AMD referral process. We have a planned training session to take place in fiscal year 2009.

Recommendation 2

Record the appropriate disposition code on the AMD allegation referral form.

Comment

We agree. As stated in our response to recommendation 1, we will release our revised POMS by October 31, 2008, and it will include instructions on how to document the AMD allegation referral form. We will also continue to issue reminders as opportunities arise.

Appendix E
OIG Contacts and Staff Acknowledgments
OIG Contacts
Shirley E. Todd, Director, Evaluation Division, (410) 966-9365
Randy Townsley, Audit Manager, Evaluation Division, (410) 966-1039
Acknowledgments
In addition to those named above:
Nicole Gordon, Auditor

For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig or contact the Office of the Inspector General's Public Affairs Staff Assistant at (410) 965-4518. Refer to Common Identification Number A-13-08-18030.

Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit (OA), Office of Investigations (OI), Office of the Counsel to the Inspector General (OCIG), Office of External Relations (OER), and Office of Technology and Resource Management (OTRM). To ensure compliance with policies and procedures, internal controls, and professional standards, the OIG also has a comprehensive Professional Responsibility and Quality Assurance program.

Office of Audit
OA conducts financial and performance audits of the Social Security Administration's (SSA) programs and operations and makes recommendations to ensure program objectives are achieved effectively and efficiently. Financial audits assess whether SSA's financial statements fairly present SSA's financial position, results of operations, and cash flow. Performance audits review the economy, efficiency, and effectiveness of SSA's programs and operations. OA also conducts short-term management reviews and program evaluations on issues of concern to SSA, Congress, and the general public.

Office of Investigations
OI conducts investigations related to fraud, waste, abuse, and mismanagement in SSA programs and operations. This includes wrongdoing by applicants, beneficiaries, contractors, third parties, or SSA employees performing their official duties. This office serves as liaison to the Department of Justice on all matters relating to the investigation of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.

Office of the Counsel to the Inspector General
OCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCIG also advises the IG on investigative procedures and techniques, as well as on legal implications and conclusions to be drawn from audit and investigative material. Also, OCIG administers the Civil Monetary Penalty program.

Office of External Relations
OER manages OIG's external and public affairs programs, and serves as the principal advisor on news releases and in providing information to the various news reporting services. OER develops OIG's media and public information policies, directs OIG's external and public affairs programs, and serves as the primary contact for those seeking information about OIG. OER prepares OIG publications, speeches, and presentations to internal and external organizations, and responds to Congressional correspondence.

Office of Technology and Resource Management
OTRM supports OIG by providing information management and systems security. OTRM also coordinates OIG's budget, procurement, telecommunications, facilities, and human resources. In addition, OTRM is the focal point for OIG's strategic planning function, and the development and monitoring of performance measures. In addition, OTRM receives and assigns for action allegations of criminal and administrative violations of Social Security laws, identifies fugitives receiving benefit payments from SSA, and provides technological assistance to investigations.