MEMORANDUM

Attached is a copy of our final report. Our objective was to evaluate the effectiveness of the Social Security Administration's decentralized correspondence process, in terms of both the number of wage items reinstated under the process and the timeliness of these reinstatements.

Please comment within 60 days from the date of this memorandum on corrective action taken or planned on each recommendation. If you wish to discuss the final report, please call me or have your staff contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410) 965-9700.

James G. Huse, Jr.

AUDIT REPORT

Mission

Executive Summary

Our objective was to evaluate the effectiveness of the Social Security Administration's (SSA) decentralized correspondence (DECOR) process, in terms of both the percentage of wage items reinstated under the process and the timeliness of these reinstatements.

Title II of the Social Security Act requires that SSA maintain the reported earnings records of individuals. SSA uses these reported earnings to determine whether an individual is entitled to receive retirement, survivors, disability and health insurance benefits and to calculate benefit payment amounts. The earnings records show the amount of earnings reported by the worker’s employer (or the self-employed person) and the periods for which the earnings were reported. However, each year SSA processes millions of earnings items that cannot be posted to wage earners' records because the earnings lack a valid Social Security number (SSN) and/or name. These unmatched records accumulate in SSA's Earnings Suspense File (ESF).

The purpose of the DECOR process is to contact individuals to resolve SSN and/or name discrepancies on reported earnings. The correspondence provides the wage earner with information about the reported name/SSN and wage amount, and requests that the reported information be reviewed, verified or corrected where possible, and returned. While SSA sends most of the DECOR notices to employees, SSA sends a notice to the employer when an employee's address is unavailable.

Returned notices containing a reply are matched against SSA's internal records and the ESF. If the resubmitted name/SSN information matches SSA's records, the wage item is reinstated from the ESF to the earner's record. If the provided information is still invalid, no further correspondence is sent and items remain in the suspense file awaiting additional edit processes.

While only 9.5 percent of our sample of Tax Year (TY) 1998 suspended wage items were reinstated through all reinstatement processes at the time of our audit, the DECOR process was one of the more effective means for identifying the owners of these suspended wage items. While our audit found that the DECOR process reinstated only 3.5 percent of the suspended items in our sample, it was the third most effective method for reinstating our sample items of SSA’s seven primary manual and automated reinstatement processes. SSA data on reinstatement activity indicated that the DECOR process was the second most effective process for reinstating wage items during TYs 1994 through 1998. The overall effectiveness of the DECOR process increases to 10 percent when based upon reinstated wages in our sample rather than reinstated wage items. Our review also indicated that it can take as long as 1 year to resolve suspended wages through the DECOR process.

We also found that the DECOR process currently overlaps with other validation processes, such as educational correspondence to employers. In addition, the DECOR process fails to follow-up on incomplete returned notices by informing individuals that their earnings issue remains unresolved. As a result, these individuals may erroneously infer that SSA has corrected the problem.

SSA could further improve the effectiveness of the DECOR process by minimizing duplication with other validation techniques and following up with the earners on unresolved DECOR responses. If SSA eliminates the DECOR notices going to employers and, instead, utilizes these resources to follow up on incomplete or incorrect responses, the Agency could improve the overall effectiveness of the DECOR process. SSA could also monitor the continued effectiveness of the DECOR process by reviewing the annual DECOR reinstatements in relation to other reinstatement processes.

To improve the effectiveness of the DECOR process, we recommend that SSA:

• Remove employer notices from the DECOR process once the employer educational correspondence process has been fully implemented so employers are informed of all wage items with name/SSN mismatches.

• Improve follow-up on unresolved DECOR responses, such as sending a second notice requesting that individuals visit their local SSA field office to discuss the outstanding earnings issue. This would alert the individual that his or her wages remain in suspense and provide one more avenue for resolution of the suspended earnings.

• Periodically analyze annual reinstatement rates and volumes to assess the overall effectiveness of the DECOR process and its effectiveness in relation to other reinstatement processes. This information should be maintained for management information purposes.

Regarding Recommendation 1, SSA believes a more in-depth analysis should be conducted before the Agency stops sending DECOR notices to employers. Over the past several years, SSA has implemented a number of initiatives to enhance the earnings posting process, and beginning with TY 2001, SSA sent educational correspondence notices to all employers with name/SSN mismatches. SSA will evaluate this recommendation in conjunction with their ongoing efforts to improve the earnings posting process and expects to make a final decision by the end of this calendar year.

Regarding Recommendation 2, SSA does not believe additional follow-up efforts are warranted at this time. The Agency’s opinion is based on its experience with the follow-up efforts related to (1) thousands of letters sent to people whose DECOR responses provided the same information as the original reports and (2) attempts to call a sample of employees who had given telephone numbers on their DECOR responses. SSA considered both projects to be unproductive.

SSA agreed with Recommendation 3, and stated that the Agency should maintain DECOR reinstatement management information.

While we understand SSA plans to conduct more in-depth analysis of DECOR notices to employers, our recommendation related to these notices is consistent with previous reviews of the DECOR notices as well as SSA's own prior studies. We provide details related to these reviews in the body of the report. In addition, greater name/SSN mismatch reporting under educational correspondence to employers should further reduce the need for separate DECOR mailings to this same group. We look forward to receiving SSA's final decision in this area.

We continue to believe our recommendation related to additional follow-up efforts could assist SSA in resolving suspended wages. Although SSA has previously studied follow-up contacts with wage earners—and noted they were unproductive—it is unclear whether SSA actually determined if the letters led to later field office visits to correct the wage items. Furthermore, although SSA states its telephone calls led to a "small reinstatement rate," the sample was limited to individuals who provided their telephone numbers. We continue to believe a second notice requesting that the individual visit his or her local SSA field office to discuss the earnings issue would alert the individual that the wages remain suspended and provide one more avenue for resolution of the earnings.

Table of Contents

APPENDIX A – Decentralized Correspondence Notice

APPENDIX B – Decentralized Correspondence Flowchart

APPENDIX C – Agency Comments

APPENDIX D – OIG Contacts and Staff Acknowledgments

Acronyms

Introduction

Our objective was to evaluate the effectiveness of the Social Security Administration's (SSA) decentralized correspondence (DECOR) process, in terms of both the percentage of wage items reinstated under the process and the timeliness of these reinstatements.

Title II of the Social Security Act requires that SSA maintain the reported earnings records of individuals. SSA uses these reported earnings to determine whether an individual is entitled to receive retirement, survivors, disability and health insurance benefits and to calculate cash benefit rates. The earnings records show the amount of earnings reported by the worker’s employer or the self-employed person and the periods for which they were reported. However, each year SSA processes millions of earnings items that cannot be posted to wage earners' records in the Master Earnings File (MEF) because the earnings lack a valid Social Security number (SSN) and/or name. These unmatched records accumulate in SSA's Earnings Suspense File (ESF).

The purpose of the DECOR process is to contact individuals to resolve SSN and/or name discrepancies on reported earnings. The correspondence provides the wage earner information about the reported name/SSN and wage amount and requests that the reported information be reviewed, verified or corrected where possible, and returned. While SSA sends most of the DECOR notices to employees, SSA sends a notice to the employer when an employee's address is unavailable. (See Appendix A for an example of a DECOR employee notice.)

Returned notices containing a reply are processed in the Wilkes-Barre Data Operations Center (WBDOC) and reviewed to determine whether the wage item can be removed from the ESF and reinstated to the appropriate earner's account on the MEF. If the provided information is still invalid, no further correspondence is sent and items remain in the suspense file awaiting additional edit processes. (See Appendix B for a flowchart of the DECOR process.)

The ESF contains over 227 million Wage and Tax Statements (W-2) and $328 billion in wages accrued between Tax Years (TY) 1937 and 1999 that could not be matched to individuals' earnings records. During TY 1999 alone, the ESF grew by 8.3 million W-2s and $39.4 billion in wages. Approximately 96 percent of the ESF wages relate to TYs 1970 through 1999. Suspended wages can affect an individual’s eligibility for retirement and disability benefits.

We analyzed several prior reports and management letters involving the DECOR process. These reports and letters contained specific recommendations that are listed below.

A contractor hired by SSA to review the ESF issued its final report on July 18, 2001. The purpose of the contractor’s review was to determine whether SSA should modify its existing practices in managing the ESF. Among a number of recommendations related to the ESF, the report recommended that SSA should redesign its DECOR notice and send the notice after employers are given an opportunity to fix wage errors.

The Annual Wage Reporting (AWR) Error Notices Workgroup—an inter-component team—was chartered by SSA to review and improve notices to employers and employees about wage reporting problems. The workgroup was responsible for reviewing all name/SSN-related notices currently sent to employers and employees for their completeness, efficiency and effectiveness. This effort included a review of both content and language changes to the notices, the need for additional notices, and the possible need to discontinue notices. On December 30, 1999, the workgroup issued its report containing the following DECOR-related recommendations:

• Prepare a DECOR database after all other reinstatement activities and after the recommended 90 days that allows for the employer to respond to the educational correspondence has elapsed;

• Send DECOR notices to employees only; and

• Add language to the notice directing the employee to contact the employer regarding corrected name/SSN information.

An earlier Office of the Inspector General (OIG) audit commented on the DECOR process. This review reported that DECOR was only marginally effective in correcting the name and SSN errors that prevented the earnings from being credited to the individual's earnings record. The 1991 OIG report made a number of recommendations, including:

• Screen undeliverable mail and remail notices with forwarding addresses;

• Design postcards or form letters with several different statements to follow up on incorrect employer and employee responses;

• Revise the DECOR forms, including adding instructions to the employee to notify the employer of the discrepancy and to request the employer make the necessary corrections; and

• Initiate an educational program to acquaint employers and the public about proper name reporting standards.

To accomplish our objective, we:

• Visited WBDOC to perform a walk-through of the DECOR process and review available workload data to determine the overall effectiveness of the DECOR process.

• Visited two SSA field offices and the Philadelphia tele-service center to determine their involvement in the receipt and timeliness of DECOR earnings corrections input.

• Obtained a copy of the 1998 DECOR file from SSA, which contained 7,280,415 wage items, with a corresponding value of $36.1 billion dollars. This file contains correspondence that was mailed to employees and employers related to wage reports submitted during the TY 1998 reporting period. Earnings items identified as self employment income for TY 1998 were not included in this population since self employment data were contained in a separate file, and the data provided was determined to be incomplete.

• Selected a random sample from a population of 7,280,415 wage items, totaling over $36.1 billion. Our sample consisted of 200 wage items with an associated dollar value of $1,072,300.

• Determined for each sampled item whether the wages remained in suspense and, if reinstated, verified the amount and timing of any reinstated wages.

• Requested DECOR production statistics from the WBDOC staff to include: (1) correspondence generated and mailed; (2) processed receipts; (3) undeliverables; and (4) remailables.

• Requested an extract from SSA's ESF Reinstates File for TYs 1994 through 1998 showing earnings corrections due to the DECOR process. This file contains only the most recent reinstatement when multiple records are reinstated for the same Employer Identification Number, name and SSN. However, in this report we are using the most recent reinstatement activity, which tends to be more accurate than older reinstatements.

• Obtained an Epoxy Accounting Statistics Report showing summary DECOR reinstatement activity for TYs 1994 through 1998. Epoxy is a system designed to provide management information on the Earnings Record Maintenance System.

• Reviewed pertinent sections of SSA's Program Operations Manual System.

• Requested data on contractor expenses and other DECOR processing expenses.

• Requested prior studies or audits that have reviewed the DECOR process.

• Interviewed SSA staff to gain an understanding of the DECOR process.

Our audit did not include a test of information systems to verify the completeness and accuracy of the DECOR or Reinstates File data provided by SSA. However, we expanded our analytical procedures to assess the reasonableness of the data presented in TY 1998. Our review of DECOR timeliness was limited since the process was modified after TY 1998. Our work was conducted at SSA's Data Operations Center in Wilkes-Barre, Pennsylvania and at SSA Headquarters in Baltimore, Maryland. The fieldwork was conducted between March 2001 and December 2001. The SSA entity responsible for the maintenance of the ESF is the Office of Central Operations within the Office of the Deputy Commissioner of Operations. Our review was conducted in accordance with generally accepted government auditing standards.

Results of Review

While only 9.5 percent of our sample of TY 1998 suspended wage items were reinstated through all reinstatement processes at the time of our audit, the DECOR process was one of the more effective means for identifying the owners of these suspended wage items. Approximately 3.5 percent of the items and 10 percent of the associated wages in our sample were reinstated through the DECOR process. Our review also demonstrated that it can take as long as 1 year for SSA to resolve suspended wages through the DECOR process. Both the results of our sample and our review of previous year reinstatements indicated that the DECOR process remains one of the most effective processes SSA has for reinstating wages. However, we found that the DECOR process currently overlaps with other validation processes and fails to follow-up on incomplete returned notices.

EFFECTIVENESS OF The DECOR Process

Our review of 200 suspended wage items in the TY 1998 DECOR file found 19 wage items (9.5 percent) were reinstated through SSA's validation techniques (see figure 1), including:

• 7 items (3.5 percent) reinstated through the DECOR process, representing $105,070 in wages; and

• 12 items (6 percent) reinstated though processes other than DECOR, representing $181,141 in wages.

We also found the average wage reinstated through DECOR was almost 3 times greater than the average wage in our sample. While DECOR reinstatements averaged $15,010 in wages, the 200 items in our sample averaged $5,362 in wages. As a result, while the 7 DECOR reinstatements represented 3.5 percent of the wage items in our sample, they represented 10 percent of the wages. Hence, for our sample, DECOR was more effective in reinstating wages (i.e., dollars) than in reinstating wage items.

During Fiscal Years (FY) 1995 through 1999, SSA mailed over 32 million DECOR notices to the public. Of the mailed DECOR notices, SSA reported:

• the WBDOC received and processed responses on approximately 5 million notices (15 percent);

• approximately 8 million notices (25 percent) were deemed "undeliverable" due to an incomplete address or no forwarding address;

• about 230,000 notices (1 percent) were re-mailed based on a new forwarding address from the United States Postal Service (USPS); and

• approximately 19 million notices (59 percent) were never returned to SSA (see figure 2 below).

Although SSA was unable to provide similar statistics for the reinstated items by FY, we reviewed the last 5 years of DECOR reinstatements on SSA's Reinstates File to determine whether the volume of reinstates was consistent with previous years. For TYs 1994 through 1998, the DECOR process was able to reinstate an average of 346,000 wage items annually (see figure 3). The DECOR process was more successful in associating earners with suspended wages in earlier years. In TY 1998, DECOR reinstatements were below the 5-year average. SSA staff was unable to determine why TY 1998 reinstatements were below the 5-year average.

Although our sample results showed a 3.5 percent reinstatement rate for the items we examined in the TY 1998 DECOR file, SSA's Reinstates File indicates the average reinstatement rate over the past 5 years has been 5 percent. SSA records also indicate that of the approximately 32 million DECOR notices for TYs 1994 through 1998, about 1.7 million (5 percent) resulted in a reinstatement of wages. A summary of SSA's reported results for 5 years of reinstatement efforts is included in figure 4 below.

Our review indicated that SSA required as long as 1 year to resolve TY 1998 suspended wages through the DECOR process. Our analysis of the DECOR reinstatements in our sample indicated that five of the TY 1998 wage items were posted between September 1999 and January 2000. Two additional items were not posted until August 2001, but it is unclear whether this reinstatement was due to a DECOR notice sent in TY 1998 or TY 1999. Assuming the employers reported their wages to SSA by February 1999 and most of the wages were posted by September 1999, it took anywhere from 5 months to 1 year to post all of the DECOR reinstatements in our sample. We performed a limited review of DECOR timeliness since the process has been modified since TY 1998, as we explain below.

The timeliness and effectiveness of DECOR notices may increase due to recent changes in the overall process. In 2000, SSA hired a contractor to assist the Agency in improving the overall timeliness of the DECOR notices. Up until TY 1999, DECOR notices (including those in our audit) were printed in large runs and mailed by SSA staff located in the WBDOC. However, SSA hired a contractor to perform the printing and mailing process beginning in TY 2000 (see table 1 for estimated contract volume). Although the transition to the new contractor actually delayed TY 1999 DECOR mailings, SSA staff noted that the new process is working well and DECOR notices are now going out on a weekly basis. We did not verify an improvement in timeliness since this change in SSA’s process occurred after the period we reviewed. In addition, while more timely notices may improve the overall DECOR process, a direct correlation with increased reinstatements may be hard to prove. Nonetheless, additional earners may respond to the DECOR notices if they are received earlier. For example, since earners may move over time, an earlier notice may locate more individuals and lead to fewer notices coming back as undeliverable.

Our sample showed that the DECOR process was the third most effective for reinstating wages in TY 1998, while SSA's records indicate DECOR was the second most effective over the 5-year period from TY 1994 through TY 1998 when compared to SSA’s seven primary manual and automated reinstatement processes. Based on SSA's Reinstates File data for TYs 1994 through 1998, Single Select validation appears to be the most successful reinstatement process. Single Select is the first process performed on wage items after they go into the ESF. While DECOR was able to resolve about 1.7 million wage items over the 5-year period, Single Select was able to reinstate approximately 9.3 million items. In TY 1998 both Single Select and the

Internal Revenue Service (IRS) Reconciliation process surpassed DECOR. In the next section we note the role of DECOR versus validation techniques in the TY 1998 sample.

By analyzing the order of reinstatement in our TY 1998 sample items, we found that the DECOR process was able to resolve suspended items not corrected through other validation techniques. For example, of the seven items reinstated through the DECOR process, five (71 percent) were reinstated after SSA had performed annual edit processes such as reconciliation with the IRS data (see table 2). It is possible that the IRS Reconciliation process resolved some items that would have otherwise been resolved through DECOR. Hence, the order of SSA's edits in relation to each other may impact each edit’s effectiveness.

We also found that while the IRS Reinstatement process was the second most effective process (after Single Select) for reinstating wage items in TY 1998, the DECOR process was the second most effective for reinstating wages during the same period. Figures 5 and 6 show the DECOR process relative to the other validation processes in terms of items and wages reinstated.

SSA has made improvements to the DECOR process over the years. In addition to hiring a new contractor to print and mail the notices, SSA has: (1) updated the language in the DECOR notices; (2) remailed undeliverable notices with new forwarding addresses; and (3) offered education programs to employers to emphasize the importance of proper name reporting standards. However, the DECOR process currently overlaps with other validation processes, such as educational correspondence with employers, and fails to follow-up on incomplete returned notices.

Earlier reviews of the DECOR process noted a need for more information to assist the employee in resolving name/SSN errors. For example, SSA's AWR Error Notices Workgroup recommended SSA add notice language directing the employee to contact the employer regarding corrected name/SSN information. SSA has since updated the DECOR notices. The notices now state "If you have been using an incorrect name or Social Security number, or your employer has been reporting earnings for you under an incorrect name or Social Security number, you must correct this information by contacting both your employer and your local Social Security office." (See Appendix A for a copy of the DECOR notice.)

The 1991 OIG audit also recommended that SSA remail all letters with forwarding addresses provided by the USPS. SSA now remails all undeliverable DECOR with a USPS forwarding address. Between 1995 and 1999, SSA remailed approximately 230,000 previously undeliverable DECOR notices.

Finally, the 1991 OIG report also recommended that SSA initiate an education program to acquaint employers and the public with proper name reporting standards. SSA provides a number of services to employers to educate them on the importance of the name/SSN combination in their wage reporting. SSA, in conjunction with the IRS, offers joint year-end training for employers. SSA also maintains an employer website with an interactive presentation explaining the correct name and SSN formats for the W-2. Furthermore, SSA maintains Employee Liaison Service Officers in each of its regions to answer employer questions on wage reporting and other issues.

SSA may be able to transfer 10 percent of its DECOR workload to the employer educational correspondence process, or about 720,000 notices for TY 1998. Currently, in addition to sending the employer a DECOR notice, SSA also sends educational correspondence to employers with name/SSN mismatches and asks them to correct the information. While in the past SSA provided only 250 name/SSN mismatches for the employer to correct, beginning in TY 2000, SSA increased the number of reported mismatches to 500 employees. SSA staff told us that, beginning in TY 2001, the Agency started (1) sending educational correspondence to all employers, regardless of the number of name/SSN mismatches, and (2) providing employers with an SSA contact where they can obtain an electronic file listing all name/SSN mismatches submitted. With greater reporting under its educational correspondence program, SSA may have an opportunity to eliminate the duplicative process of employer DECOR mailings. In 1999, the AWR Error Notices Workgroup concluded that SSA could avoid duplication by sending DECOR notices to employees only.

Our review of 200 sample items also indicated that employers are less likely to respond to DECOR notices than employees. Although employer notices tend to be about 22 percent of the notices mailed by SSA (and represented 10 percent of our 200 sample items), none of the seven reinstated items in our sample related to employer notices. As far back as 1989, SSA acknowledged that employer DECOR notices have been less productive than the employee notices. In response to the 1991 OIG report on DECOR, SSA noted that "[DECOR] responses from individuals have been noticeably better than those from employers."

In terms of the earlier recommendations to SSA that the Agency send DECOR notices after employers are given an opportunity to fix errors, such a change would combine the problem of duplication with additional delays in mailing the DECOR notices. As already noted, SSA hired a new contractor for the purpose of ending this delay in notices.

SSA has an opportunity to increase its efficiency by following up on unresolved DECOR responses. Over the past 5 years, approximately 650,000 DECOR notices (10 percent of the total notices mailed) were returned annually to WBDOC, but no reinstatement action was taken. Unlike the 59 percent of the notices never returned to WBDOC, these notices reached the intended parties but some of the reply information was either incomplete or incorrect. However, SSA made no attempt to inform these individuals that their earnings issue remained unresolved.

By failing to inform an individual that his or her wages remain in suspense, the individual may be under the assumption that their earnings record has been corrected. An additional step, such as a second notice requesting that the individual visit their local SSA field office to discuss the earnings issue, would alert the individual that the wages remain in suspense and provide one more avenue for resolution of the earnings.

The 1991 OIG audit made a similar observation, and recommended that SSA design a letter to follow up with the individual on incorrect employer and employee responses. In response, SSA noted that the DECOR notices had been redesigned to now request that the individual completing the notice provide a daytime telephone number to facilitate follow-up contact. However, when we discussed this issue with SSA staff, we were informed that current procedures do not include following up on incomplete and/or incorrect responses.

Conclusions and Recommendations

While the DECOR process reinstated only 3.5 percent of the suspended items in our sample, it was one of the more effective means for identifying the owners of these suspended wage items. In fact, its overall effectiveness increases to 10 percent when ranking by wages rather than wage items. The recent contract for printing and mailing DECOR notices, as well as changes in the process resulting from prior reviews, may improve its overall effectiveness and timeliness. However, SSA could further improve the effectiveness of the DECOR process by minimizing duplication with other validation techniques and following up with the unresolved responses. SSA could also monitor the continued effectiveness of the DECOR process by reviewing the annual DECOR reinstatements in relation to other reinstatement processes. If SSA were to eliminate the DECOR notices going to employers and, instead, utilize these resources to follow up on incomplete or incorrect responses, it appears likely that the Agency could improve the overall effectiveness of the DECOR process.

To improve the effectiveness of the DECOR process, we recommend SSA:

1. Remove employer notices from the DECOR process once the employer educational correspondence process has been fully implemented so employers receive notices of all wage items with name/SSN mismatches.
   
   
2. Improve follow-up on unresolved DECOR responses, such as sending a second notice requesting that individuals visit their local SSA field office to discuss the outstanding earnings issue. This would alert the individual that his or her wages remain in suspense and provide one more avenue for resolution of the suspended earnings.
   
   
3. Periodically analyze annual reinstatement rates and volumes to assess the overall effectiveness of the DECOR process and its effectiveness in relation to other reinstatement processes. This information should be maintained for management information purposes.

Regarding Recommendation 1, SSA believes a more in-depth analysis should be conducted before the Agency stops sending DECOR notices to employers. Over the past several years, SSA has implemented a number of initiatives to enhance the earnings posting process, and beginning with TY 2001, SSA sent educational correspondence notices to all employers with name/SSN mismatches. SSA will evaluate our recommendation in conjunction with their ongoing efforts to improve the earnings posting process and plans to make a final decision by the end of this calendar year.

Regarding Recommendation 2, SSA does not believe additional follow-up efforts are warranted at this time. The Agency’s opinion is based on its experience with the follow-up efforts related to (1) thousands of letters sent to people whose DECOR responses provided the same information as the original report and (2) attempts to call a sample of employees who had given telephone numbers on their DECOR responses. SSA considered both projects to be unproductive.

SSA agreed with Recommendation 3 that the Agency should maintain DECOR reinstatement management information. SSA will explore options to determine the best approach to implement this recommendation in conjunction with its ongoing efforts to improve the earnings posting process and expects to make a final decision by the end of this calendar year.

While we understand SSA plans to conduct more in-depth analysis of DECOR notices to employers, our recommendation related to these notices is consistent with previous reviews of the DECOR notices as well as SSA's own past comments. In addition, greater name/SSN mismatch reporting under educational correspondence to employers should further reduce the need for separate DECOR mailings to this same group. We look forward to receiving SSA's final decision in this area.

We continue to believe our recommendation related to additional follow-up efforts could assist SSA in resolving suspended wages. Although SSA has previously studied follow-up contacts with wage earners—and noted they were unproductive—it is unclear whether SSA actually determined if the thousands of letters led to later field office visits to correct the wage items. Furthermore, although SSA states its telephone calls led to a "small reinstatement rate," the sample was limited to individuals who provided their telephone numbers. We continue to believe a second notice requesting that the individual visit his or her local SSA field office to discuss the earnings issue would alert the individual that the wages remain suspended and provide one more avenue for resolution of the earnings.

Finally, SSA's response to our recommendation regarding DECOR reinstatement management information adequately addresses our concerns. Such a management information system should assist SSA in assessing the overall effectiveness of the DECOR process and its effectiveness in relation to other reinstatement processes.

Appendices

Appendix A

Decentralized Correspondence Notice
Form Approved OMB No. 0960-0508

Social Security Administration
Retirement, Survivors, and Disability Insurance
Request for Employee Information

We need more information about earnings reported for you by the company for the tax year shown below. Please complete the information on the back of this letter and return to us promptly. We can't put these earnings on your Social Security record until the name and Social Security number reported agree with our records.

This letter does not imply that you intentionally gave incorrect information about your name or Social Security number. It is not a basis, in and of itself, for your employer to change your job, lay you off, fire you or take other action against you.

Visit our website at www.socialsecurity.gov (Please See Reverse) Form SSA-L3365-C1 (2-00)

REQUEST FOR EMPLOYEE INFORMATION

3. Does the amount of reported earnings on the front of this letter match any W-2 you received for the Yes No (Explain) tax year shown?

4. Have you ever used another name? No No Yes (Give other names used)

5. Daytime phone number where you can be reached __ __ __ - __ __ __ - __ __ __ __

Penalty: Under the Internal Revenue code, the IRS may charge an employee a $50 penalty for each time the employee does not furnish his or her correct Social Security number to his or her employer. The IRS may impose this penalty unless you can show reasonable cause for not furnishing the correct number.

Section 205(a) and (c) of the Social Security Act allows us to ask for the information on this form. The information you give us will be used to give the employee credit for earnings reported. You do not have to give us this information. However, without the information we may not be able to give the employee credit for wages earned.

We may give this information to the Internal Revenue for tax purposes or to the Department of Justice for investigating and prosecuting violations of the Social Security Act. Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security offices. If you want to learn more about this, contact any Social Security office.

The Paperwork Reduction Act of 1995 requires us to notify you that this information collection is in accordance with the clearance requirements of section 3507 of the Paper work Reduction Act of 1995. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a valid OMB control number.

Time It Takes To Complete This Form

We estimate that it will take you about 10 minutes to complete this form. This includes the time it will take to read the instructions, gather the necessary facts and fill out the form. If you have comments or suggestions on this estimate write to the Social Security Administration, ATTN: Reports Clearance Officer, 1-A-21 Operations Bldg, Baltimore, MD 21235-0001. Send only comments relating to our "time it takes" estimate to the office listed above. All requests for Social Security cards and other claims-related information should be sent to your local Social Security office, whose address is listed under Social Security Administration in the U.S. Government section of your telephone director.

Visit our website at www.socialsecurity.gov Form SSA-L3365-C1 (2-00)

If you have any other questions, you may call us toll free at 1-800-772-1213. We can answer most questions over the phone. You can also write or visit any Social Security office. If you do call or visit an office, please have this letter with you. The office that serves your area is located at:

If you need an interpreter to conduct Social Security business, we will apply one on request, free of charge. If you want us to supply the interpreter, please call 1-800-772-1213 before you come to the office and tell us what language you prefer to speak.


W. Burnell Hurt
Associate Commissioner for
Central Operations

Enclosure:
Envelope

Visit our website at www.socialsecurity.gov Form SSA-L3365-C1 (2-00)

Agency Comments

OIG Contacts and Staff Acknowledgments

In addition to those named above:

Richard Devers, Auditor
Carol Ann Frost, Computer Specialist
Frank Trzaska, Auditor