OFFICE OF
THE INSPECTOR GENERAL

SOCIAL SECURITY ADMINISTRATION

DIRECT DEPOSITS FOR
MULTIPLE TITLE XVI RECIPIENTS
INTO THE SAME BANK ACCOUNT

March 2007

A-02-06-25141

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: March 23, 2007

To: The Commissioner

From: Inspector General

Subject: Direct Deposits for Multiple Title XVI Recipients into the Same Bank Account (A-02-06-25141)

OBJECTIVE

Our objective was to determine whether individuals were improperly receiving Supplemental Security Income (SSI) payments through multiple direct deposits to the same bank account.

BACKGROUND

Individuals who are age 65 or older, are blind or disabled, and have limited income may be eligible for SSI. In Fiscal Year 2006, the Social Security Administration (SSA) paid approximately $41 billion to about 7.2 million SSI recipients. Over half of that amount was direct deposited into recipients' bank accounts. Per SSA's Program Operations Manual System (POMS), SSI recipients who are their own payees may have their payments deposited to single or joint ownership accounts.

To administer SSI payments, SSA maintains a Supplemental Security Income Record, which includes the recipient's name, Social Security number, address, bank account information, representative payee information, and payment history. SSA designed the Supplemental Security Income Duplicate Payment Project (SSIDPP) to preclude an individual from receiving duplicate payments due to multiple SSI records. The Agency runs SSIDPP annually, and cases that meet the matching criteria are transmitted to the appropriate SSA office to resolve the discrepancies.

The SSIDPP does not address the potential risk of individuals diverting funds using multiple direct deposits since it neither matches bank account information nor identifies unrelated individuals depositing payments into the same bank account. As such, we were concerned that recipients who appeared to be unrelated yet shared bank accounts may have been an indication the intended recipient was not receiving the full benefit and use of their payments.

We identified 1,205 recipients who were in current pay status as of May 2006 and whose SSI payments were direct deposited into 504 bank accounts (each bank account received at least 2 SSI payments). These individuals had their SSI payments direct deposited into the same bank account even though the recipients had no apparent relationship and were not assigned a representative payee. We provided our data to SSA, and its field office staff contacted the recipients to determine the nature of the relationship between SSI recipients sharing bank accounts. SSA staff completed reviews for 1,203 of the 1,205 individuals and the results of our review are described below.

RESULTS OF REVIEW

The individuals we reviewed were eligible for SSI payments and knowingly sharing bank accounts with other SSI recipients, but some received the wrong payment amounts. In almost every case, the recipients were entitled to the SSI payments they received and were sharing accounts with other recipients they knew and/or resided with (see Appendix C). However, some of the recipients' living arrangements were unknown to SSA, which led to improper payments. Also, SSA staff did not fully develop some of the cases, which also led to improper payments. In total, we identified $406,500 in overpayments over a 2-year period. In that same period, the 1,205 recipients received approximately $12 million in SSI payments. In addition, we found the controls over identifying jointly owned bank accounts could be improved. Lastly, SSA referred 10 recipients to our Office of Investigations (OI) for further review.

IMPROPER PAYMENTS

We found that 148 (12 percent) of the 1,203 individuals reviewed were overpaid approximately $406,500 because either they did not properly report their living arrangements or SSA staff did not fully develop their records to ensure the proper payment amount.

Of the 148 inaccurately paid recipients, 25 were receiving a payment because they reported their marital status as single, even though they were married or met SSA's criteria for being married and were therefore subject to a lower monthly payment. One couple had reported their marriage to SSA, but their records were not properly updated, so they received inaccurate payments.

Of the 148 recipients with overpayments, 106 were members of a religious order that had taken a vow of poverty and resided in housing provided by the order. The income based on in-kind support and maintenance (ISM) for these recipients was either not counted or not fully charged. This occurred because the religious order provided its members full support and maintenance and therefore the food and shelter was countable as ISM. However, we found SSA staff did not properly account for this income.

For those cases where ISM was not fully charged, claims were generally not developed in the Modernized Supplemental Security Income Claims System (MSSICS). Consequently, the ISM was not automatically updated and was therefore understated, which resulted in overpayments. Per SSA guidance, MSSICS is the preferred mechanism for establishing initial claims, and it is important to retain a case in MSSICS whenever possible.

For the remaining 17 of the 148 recipients, 10 were either friends or family members who were overpaid for a variety of circumstances. Some were incarcerated or a fugitive felon, residing outside the United States, receiving pension income, in living arrangements that paid lower monthly payments than the arrangements known to SSA, or voluntarily terminated their SSI payments. A determination could not be made for seven recipients because they either could not be located or did not show up for their appointment with SSA staff.

IMPACT OF IMPROPER PAYMENTS

To determine the resulting improper payments for the 148 recipients, we calculated overpayment amounts using two methodologies. The first methodology applied administrative finality rules, while the second methodology excluded administrative finality. SSA can only collect overpayments to the point of administrative finality, which is a period of 2 years from the date the overpayment is discovered. While administrative finality may limit what SSA may collect, the events that led to some of the overpayments discovered began before the point of administrative finality. Additionally, we estimated the amount of the overpayments forward 12 months from the time the overpayment was identified. The results are displayed in the following table.

Description
Number of Individuals Unrecoverable
Overpayments Due to
Administrative
Finality
Recoverable
Overpayments
12-Month
Estimation
Total
Member of Religious Order 106 $708,301 $305,552 $177,104 $1,190,957
Legally Married 17 $18,785 $47,955 $33,231 $99,972
Married Per SSI Criteria 8 $19,955 $25,697 $21,278 $66,930
Friends or Roommates 6 $96 $5,362 $5,856 $11,314
Family Member 4 $6,240 $7,293 $10,474 $24,006
Suspended - SSA Could Not Locate Recipient 6 $66,371 $14,455 $16,446 $97,272
Unknown 1 $64 $193 $0 $257
Total 148 $819,812 $406,506 $264,390 $1,490,708

BANK ACCOUNT OWNERSHIP

Recipients who have their SSI payments deposited into accounts with multiple SSI deposits should inform SSA. The ownership, or titling, of accounts is important when considering the resources available for SSI eligibility. If there is more than one owner of an account, SSA assumes that funds in the account belong to all owners equally, unless they can show SSA otherwise. If a shared account is only titled in the name of one SSI recipient, the owner in the account title is assumed to own all the funds in the account.

SSA did not identify issues concerning incorrect bank account titling for 928 of the 1,203 recipients reviewed. However, we identified 194 (16 percent) recipients who did not have properly titled bank accounts. Specifically, we found that 112 recipients had accounts that were owned by only 1 of the recipients, and the recipients sharing the accounts were not related. The remaining 82 recipients were sharing bank accounts with family members. In addition, we found that SSA staff could not determine the ownership of the bank accounts for 81 (6 percent) of the 1,203 recipients because they did not provide proof of ownership when meeting with SSA staff or they did not keep their interview appointments with SSA staff. From these 81 recipients, SSA referred
5 recipients to OI because of potential fraud.

OI REFERRALS

In addition to the 5 recipients discussed above, SSA staff referred another 5 recipients to OI. The 10 recipients equated to 5 allegations sent to OI, since each allegation involved 2 recipients. Of the five allegations, three allegations were opened and closed and two allegations were opened as cases. For the allegations that were opened and closed, OI determined that no further investigation was needed after its initial review and they were referred to SSA for any administrative action. For one of the allegations that was opened as a case, it was determined that the case did not meet prosecutorial guidelines, but a restitution agreement was executed for the $1,800 overpayment. In the other allegation opened as a case, OI has presented the case for prosecution. Five of the 10 recipients referred to OI were part of the 148 recipients who were overpaid by SSA. No overpayment was identified for the other five recipients.

CONCLUSION AND RECOMMENDATIONS

Based on the results of our review, we conclude that the SSI recipients reviewed were generally eligible for SSI payments, but some received the wrong payment amounts. We further conclude that opportunities exist for SSA to ensure the accuracy and integrity of SSI payments, and recommend that SSA:
1. Remind its employees of the importance of establishing and retaining cases in MSSICS, which will help ensure the proper processing of cases with ISM type income.
2. Pursue recovery efforts, as warranted, for overpayments identified in this report.
3. Contact the recipients with improperly titled joint accounts to advise them to adhere to SSA policies for direct deposits.

AGENCY COMMENTS

SSA agreed with our recommendations (see Appendix D).

Patrick P. O'Carroll, Jr.

Appendices

APPENDIX A - Acronyms
APPENDIX B - Scope and Methodology
APPENDIX C - Reasons for Multiple Direct Deposits
APPENDIX D - Agency Comments
APPENDIX E - OIG Contacts and Staff Acknowledgments

Appendix A
Acronyms

ISM In-kind Support and Maintenance
MSSICS Modernized Supplemental Security Income Claims System
OI Office of Investigations
OIG Office of the Inspector General
POMS Program Operations Manual System
SSA Social Security Administration
SSI Supplemental Security Income
SSIDPP Supplemental Security Income Duplicate Payment Project

Appendix B
Scope and Methodology

In April 2005, we obtained a database of 1,018,885 records for Supplemental Security Income (SSI) recipients in current pay status receiving direct deposits that contained at least 2 records with matching Routing Transit and Account Numbers. From this database, we removed records for individuals where there was a legitimate reason for multiple direct deposits to the same bank account, such as accounts shared by recipients with the same representative payee; spouses, children or family members; and recipients residing in nursing and retirement homes, or receiving services from a charitable organization.

At the end of November 2005, we eliminated those recipients who were no longer in current pay status, had died, or were not receiving direct deposits, or whose accounts were no longer receiving multiple direct deposits. At that time, we identified
2,419 recipients with 762 different bank accounts in 625 different District Offices.

We sent the file of 2,419 records to the Social Security Administration (SSA) in March 2006 for preliminary review. Based on concerns raised by SSA staff reviewing the records, we further eliminated certain cases, such as cases with "Rush" cards (SSA-approved debit cards) and Title VIII payments. We also attempted to eliminate religious orders but were unable to exclude all religious orders since the data were inconsistent regarding their living arrangements and in-kind support and maintenance (ISM). Additionally, we updated the file in May 2006 to eliminate cases that were no longer in current pay or multiple direct deposits. The remaining file included 1,205 individuals whose SSI payments were direct deposited into 504 bank accounts (each bank account received at least 2 SSI payments). These recipients had no apparent familial relationship.

We provided our data to SSA along with a checklist/questionnaire and a request that SSA staff contact the recipients and conduct face to face reviews to ascertain the reason(s) for multiple SSI recipients receiving benefits in a single account. SSA completed the reviews in July 2006 and delivered its results to us in late August 2006. SSA did not provide a response for 2 of the 1,205 cases we had provided, nor did SSA explain why the 2 cases were omitted from the Agency's response to our request.

We used the following Program Operations Manual System sections to define the related criteria.

GN 02402.050 Account Titles
GN 02402.055 Representative Payee Cases-Direct Deposit
SI 00835.300 Presumed Maximum Value Rule
SI 00810.005 What is Income
SI 00835.710 ISM Provided Residents of Private Nonprofit Residential Care Institutions
SI 00835.713 Determining ISM for a Member of a Religious Order Who Moves into a Private Nonprofit Residential Care Institution
SI 01110.000 Resources, General
SI 01140.000 Types of Countable Resources
SI 01140.200 Checking and Savings Accounts
SI 01140.205 Joint Checking and Savings
SI 02310.100 SSI Duplicate Payment Project
SI 04070.030 Development Required When a Prior SSI Determination or Decision is Reopened

The results of our analysis were provided to the Customer Service Branch staff in the Division of Operations Analysis and Customer Service-a component of the Office of Public Service and Operations Support-which is under the Deputy Commissioner for Operations.

We performed our audit in the New York Office of Audit from February through October 2006. We found the data used for this audit were sufficiently reliable to meet our objective. The entities audited were SSA's field offices, under the Deputy Commissioner for Operations. Our audit was performed in accordance with generally accepted government auditing standards.

Appendix C
Reasons for Multiple Direct Deposits

As stated earlier, in almost every case, the recipients were entitled to the Supplemental Security Income (SSI) payments they received and were sharing bank accounts with other recipients they knew. The reasons for multiple direct deposits varied and are summarized in the table below.

Reasons for
Multiple Direct Deposits
Individuals
Percent
Friends or Roommates 445 37.0
Religious Order 249 20.7
Family 203 16.9
Pre-Approved by a District Office 82 6.8
Married or Separated 75 6.2
Organizational Representative Payee 44 3.7
Married per SSI Criteria 22 1.8
Suspended-Could Not Locate 14 1.2
Other 69 5.7
Total 1,203 100

Recipients categorized as "other" included multiple direct deposit situations such as check cashing facilities, credit union accounts, social service agencies or adult living facilities.

The reasons for the multiple direct deposits varied. The most common link between recipients sharing the same bank account was friends or roommates with no marital relationship for SSI purposes followed by members of religious orders. We also found family and spousal relationships that were not easily identified, for example, family members with different surnames. Other reasons for the multiple direct deposits included: pre-approval by a District Office and documented in the Modernized Supplemental Security Income Claims System, accounts managed by organizational representative payees and recipients who were not legally married, but were considered married for SSI purposes.

Appendix D
Agency Comments

SOCIAL SECURITY

MEMORANDUM

Date: March 09, 2007

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

From: Larry W. Dye

Subject: Office of the Inspector General (OIG) Draft Report, "Direct Deposits for Multiple Title XVI Recipients into the Same Bank Account" (A-02-06-25141)--INFORMATION

We appreciate OIG's efforts in conducting this review. Our comments on the draft report's recommendations are attached.

Please let me know if you have any questions. Staff inquiries may be directed to Ms. Candace Skurnik, Director, Audit Management and Liaison Staff, at extension 54636.

SSA Response

COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL'S (OIG) DRAFT REPORT, "DIRECT DEPOSITS FOR MULTIPLE TITLE XVI RECIPIENTS INTO THE SAME BANK ACCOUNT" (A-02-06-25141)

Thank you for the opportunity to review and provide comments on this draft report. The objective of this audit was to determine whether individuals were improperly receiving Supplemental Security Income (SSI) payments through multiple direct deposits to the same bank account. One of the conclusions from this review was that, in practically every case, the recipients were entitled to the SSI payments they received. The audit did reveal that some of the recipients in this review were receiving incorrect SSI payments, but the audit does not correlate them to SSI payments being directly deposited into accounts with other SSI recipients. Most of the overpayments identified resulted from a failure on the part of the recipients to report changes to the Social Security Administration (SSA) that could affect their payment amounts. The main finding for an incorrect SSI payment was due to a change in living arrangements, not direct deposit. It is the Agency's goal to ensure that recipients receive the correct amount of benefits and to avoid overpayments.

Our response to the recommendations is provided below.

Recommendation 1

Correctly calculate SSI payment amounts through the proper development of claims in the Modernized Supplemental Security Income Claims System (MSSICS) for In-kind Support and Maintenance (ISM) type income.

Comment

We agree. We will issue a reminder to employees regarding the importance of retaining SSI cases in MSSICS to ensure the proper processing of those cases with ISM type income.

Recommendation 2

Pursue recovery efforts, as warranted, for overpayments identified in this report.

Comment

We agree. We will pursue recovery efforts for the identified recipients who received overpayments.

Recommendation 3

Contact the recipients with improperly titled joint accounts to advise them that they need to adhere to SSA policies for direct deposits.

Comment

We agree. In addition, we will determine the proper course of action for recipients who are using an agent to receive their benefit payments and a course of action for recipients who cannot provide SSA with a bank account that shows ownership.

Appendix E

OIG Contacts and Staff Acknowledgments
OIG Contacts
Tim Nee, Director, 212-264-5295
Victoria Abril, Audit Manager, 212-264-0504

Acknowledgments
In addition to those named above:
Robert Blake, Senior Auditor
James Kim, Program Analyst
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 Specialist at (410) 965-3218. Refer to Common Identification Number A-02-06-25141.

Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of our Office of Investigations (OI), Office of Audit (OA), Office of the Chief Counsel to the Inspector General (OCCIG), and Office of Resource Management (ORM). To ensure compliance with policies and procedures, internal controls, and professional standards, we also have a comprehensive Professional Responsibility and Quality Assurance program.

Office of Audit
OA conducts and/or supervises 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 and program evaluations and projects on issues of concern to SSA, Congress, and the general public.

Office of Investigations
OI conducts and coordinates investigative activity 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 OIG liaison to the Department of Justice on all matters relating to the investigations of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.

Office of the Chief Counsel to the Inspector General
OCCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCCIG 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. Finally, OCCIG administers the Civil Monetary Penalty program.

Office of Resource Management
ORM supports OIG by providing information resource management and systems security. ORM also coordinates OIG's budget, procurement, telecommunications, facilities, and human resources. In addition, ORM is the focal point for OIG's strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act of 1993.