MANAGEMENT OF THE DISABILITY PROCESS
SSA needs to continue to improve critical parts of the disability process, such
as making timely disability decisions and safeguarding the integrity of its
disability programs. Modernizing Federal Disability Programs has been on GAO's
high-risk list since 2003 due, in part, to outmoded concepts of disability,
lengthy processing times, and inconsistencies in disability decisions across
adjudicative levels and locations. The Federal Disability Programs include SSA's
disability programs as well as the Veterans Administration's disability program.
At the forefront of congressional and Agency concern is the timeliness of SSA's
disability decisions at the hearings adjudicative level. The average processing
time at the hearings level continues to increase-from 293 days in FY 2001 to
an estimated 512 days in FY 2007. Additionally, the hearings pending workload
continues to increase. At the end of FY 2007, the preliminary pending workload
was 746,744 cases-up from 392,387 cases in FY 2001.
As of May 2007, all State Disability Determination Services (DDS) and Offices
of Disability Adjudication and Review (ODAR) are processing disability claims
using the electronic folder. Processing disability claims electronically should
reduce processing delays caused by organizing, mailing, locating, and reconstructing
paper folders.
In August 2006, SSA implemented the Disability Service Improvement initiative
in the Boston region-making significant changes in the Agency's disability programs,
such as:
A Quick Disability Determination process for individuals who are obviously disabled;
A Medical-Vocational Expert System to enhance the quality and availability of
the expertise needed to make accurate and timely decisions at all adjudicative
levels;
A Federal Reviewing Official to review initial level decisions upon the request
of the claimant;
Closing the record after the Administrative Law Judge (ALJ) issues a decision-
allowing for the consideration of new and material evidence only under very
limited circumstances; and
A Decision Review Board to review ALJ decisions and policies and procedures
throughout the disability adjudication process.
The Quick Disability Determination process has shown success. By using a computer
model, cases are identified where the individuals are obviously disabled and
are likely to be allowed. The DDSs issued decisions on 97 percent of the Quick
Disability Determination cases within the required 20 days with a mean decision
time of 11 days. However, there are areas of Disability Service Improvement
that have been identified as not performing as expected. SSA has taken steps
to make corrections in these areas. In light of the growing backlog of disability
cases at SSA, the Commissioner of Social Security recently announced additional
initiatives in an effort to reduce the hearings backlog by FY 2012. Many of
these initiatives are either ongoing or anticipated to begin within the next
few months. The Commissioner's initiatives focus on four main areas:
Compassionate allowances where SSA plans to build on the success of the Quick
Disability Determination by increasing allowances on cases where disability
is obvious.
Improved hearing office procedures focused on accelerated and expanded efforts
to address cases that have been waiting 1,000 days or more for a hearing - with
the goal of having these cases to a negligible level by the end of FY 2007.
Increased adjudicatory capacity which includes filling hearing dockets of current
ALJs to capacity by increasing staff overtime, hiring approximately 150 ALJs
and 600 to 700 additional support staff, streamlining folder assembly, and using
personnel from other SSA components to assist the most affected hearing offices.
Using automation and business processes such as the installation of video equipment
in all hearings offices to improve case processing at all adjudicative levels.
The Commissioner has proposed to amend SSA's regulations to (1) extend the Quick
Disability Determination process to all DDSs and to remove the requirement that
each case referred under Quick Disability Determination be adjudicated within
20 days and (2) suspend the review of new claims to the Federal Reviewing Official
level and to remove the Medical Vocational Expert System/Office of Medical and
Vocation Expertise from the disability adjudication process for new claims.
Disability Fraud
Fraud is an inherent risk in SSA's disability programs. Some unscrupulous people
view SSA's disability benefits as money waiting to be taken. A key risk factor
is individuals who feign or exaggerate symptoms to become eligible for disability
benefits. Another key risk factor is the monitoring of medical improvements
for disabled individuals to ensure those individuals who are no longer disabled
are removed from the disability rolls.
We continue to work with SSA to address the integrity of the disability programs
through the Cooperative Disability Investigations program. The Cooperative Disability
Investigations program's mission is to obtain evidence that can resolve questions
of fraud in SSA's disability claims. The Cooperative Disability Investigations
program is managed in a cooperative effort between SSA's Offices of Operations,
Inspector General, and Disability Programs. Since the program's inception in
FY 1998 through May 2007, the 19 Cooperative Disability Investigations units,
operating in 17 States, have been responsible for over $813 million in projected
savings to SSA's disability programs and over $493 million in projected savings
to non-SSA programs.
In FY 2008, we plan to complete 17 reviews and begin 18 reviews in this area.
Accuracy of Disability Insurance Benefits Processed with Worker's Compensation
Settlements
Objective
To determine whether the "not proven" WC benefits (as indicated) on
the Master Beneficiary Record (MBR) have been verified and are accurate. If
not, determine whether DI payments are accurate.
Background
Workers injured on the job may qualify for DI benefits in addition to benefits
under Federal and State WC programs. However, combined DI and WC benefits could
result in workers receiving more in disability payments than they earned before
they became disabled. To prevent this, Congress enacted the WC offset provision
under section 224 of the Act, which requires that SSA reduce DI benefits by
the amount of any other disability benefit paid under any law or plan of the
United States, a State, or a political subdivision. SSA reduces the DI benefit,
unless the other disability payment originates from a State with a "reverse
offset" law.
For States with a recognized "reverse offset" law, the WC benefit
would be reduced.
Accuracy of Special Disability Workload Decisions
Objective
To determine whether SSA is accurately calculating windfall offset payments
pertaining to the Special Disability Workload.
Background
The OASDI program provides benefits to qualified retired and disabled workers
and their dependents as well as to survivors of insured workers. The SSI program
provides payment to individuals who have limited income and resources and who
are either age 65 or older, blind or disabled.
Section 1611 (e)(2) of the Act requires that SSI recipients who are eligible
for OASDI file for those benefits. In FY 2002, SSA identified approximately
251,000 SSI recipients who were eligible to receive Title II disability insurance
benefits. The Agency categorized these individuals as Special Disability Workload
cases. As of September 30, 2006, SSA reported potential Disability Insurance
(DI) entitlement with estimated liability due disabled beneficiaries totaling
$1.4 billion.
A windfall offset applies to people due both SSI and OASDI benefits. The windfall
offset prevents a person from receiving more benefits retroactively than would
have been received if all benefits were paid in the month they were due. Windfall
offsets are calculated automatically and manually by SSA. If the manual offsets
are not posted timely to SSA's systems, the windfall offset and retroactive
payments are incorrect.
Adjustment of Disabled Wage Earner Benefits at Full Retirement Age
Objective
To determine whether SSA accurately adjusts benefits of disabled wages earners
upon their attainment of full retirement age.
Background
Disabled wage earners may elect a reduced retirement benefit at age 62 to avoid
a WC offset or receive a higher total family benefit amount. In these instances,
the wage earner is simultaneously entitled to disability and reduced retirement
benefits. When the wage earner attains full retirement age, SSA must adjust
benefits to eliminate the reduction.
Administrative Law Judges' Caseload Performance
Objective
To evaluate the effect of varying levels of ALJ caseload performance on ODAR's
ability to process expected case receipts and address the growing backlog of
cases.
Background
Federal legislation prevents SSA from requiring that ALJs process a certain
number of cases. However, SSA may set reasonable production goals for ALJs as
long as the goals do not infringe on ALJs' independent decision-making processes.
Federal legislation also prevents SSA from establishing a performance appraisal
system for ALJs. However, disciplinary actions can be taken against ALJs if
the Merit Systems Protection Board finds good cause.
Aged Cases at the Hearing Level
Objective
To review the aged listing of cases, identify areas for improvement, and recommend
actions that can assist SSA in reducing the aged case backlog.
Background
Each year since FY 2001, hearing receipts have been increasing while the timeliness
of hearings processed has worsened, resulting in an increase in the number of
hearings pending. For example, there were 436,000 pending claims in FY 2001,
which increased to 716,000 in FY 2006. In addition, average processing time
was 307 days in FY 2001, but increased to 481 days in FY 2006. A review of the
hearing offices with older cases in their backlog, as well as the hearing offices
with fewer such cases, may identify potential problems in the overall process
as well some best practices for reducing their number. For instance, an earlier
audit related to case processing found that management's inattention to benchmark
reports contributed to cases becoming lost in the process.
Application Review: Modernized Claim System and National Disability Determination
Services System
Objective
To assess the effectiveness of automated and manual internal controls and test
key controls over access, data input, data processing, data rejection and data
output as they relate to the performance indicators. We will also assess the
overall reliability of the applications' computer-processed data.
Background
The National Disability Determination Services System provides case control
management and reporting capabilities for disability claims. This system is
used to develop the goals and actual results for the following two performance
indicators:
1. Number of SSI disabled beneficiaries earning at least $100 per month
2. SSI non-disability redeterminations processed
The Modernized Claims System captures Title II benefit claims. This system is
used to develop the goals and actual results for the following two performance
indicators:
1. DDS net accuracy rate (allowances/ denials combined)
2. Maintain the number of initial disability claims pending in the DDS
Association of Administrative Law Judges' Training Conference Costs
Objective
To (1) examine SSA's contributions to previous Association of Administrative
Law Judges' training conferences; (2) assess the support for, and reasonableness
of, conference costs; and (3) evaluate the nature of the training provided to
determine the appropriateness of continued SSA support.
Background
The Association of Administrative Law Judges has conducted annual training conferences
since 1992 to assist ALJs in meeting their continuing legal education needs.
Each year, approximately 200 of SSA's 1,100 ALJs attend the conferences. While
non-management ALJ attendees paid their own travel, hotel costs and registration
fees, the registration fees have been reimbursed by SSA in the past. In addition,
over the years the Agency has provided
travel for presenters, management ALJs and headquarters personnel;
fees and contract support for presenters;
financial support for printed material and rental equipment; and
duty time for those who attend, present, and/or organize the conference.
Controls over Contracts for Verbatim Hearing Recordings
Objective
To determine whether the contract to acquire hearing reporters for ODAR, effective
for FY 2006, is (1) effective in obtaining hearing reports; (2) clear in the
specifications related to contractor duties; and (3) being consistently implemented
within each region.
Background
Contract hearing reporters are responsible for delivery of a final product consisting
of complete summary notes of the hearing; a complete set of exhibits; and a
complete and audible tape or digital recording. In the remote sites, the contractor
is responsible for setting up recording equipment if it is not in place. The
hearing reporter may not perform any services for SSA other than those stated
in the contract.
The contract stipulates that the prices quoted by SSA will be as low, or lower
than, those charged to the contractor's most favored customer. Another contract
provision stipulates that payment is made per final product, rather than payment
per hour.
Disabled Individuals Hiding Self-employment Income or Earnings (2 Reviews)
Objective
To identify DI beneficiaries who concealed their self-employment income or earnings
by transferring them to another individual.
Background
An individual is considered disabled, for the purposes of the DI program, if
(s)he cannot engage in any SGA. SGA is used to describe a level of work activity
and earnings. Substantial work activity involves significant physical or mental
work, or a combination of both that is productive. If an individual is engaging
in SGA, (s)he is not eligible for disability benefits. Because of the SGA stipulations,
some unscrupulous individuals awarded disability benefits under the DI program
may be inclined to deliberately conceal self-employment income or earnings by
transferring the income to another person, such as a spouse.
Dismissals by Administrative Law Judges
Objective
To determine whether cases dismissed by ALJs could have been dismissed more
timely.
Background
Of 558,760 dispositions made by ALJs in FY 2006 we analyzed, ALJs dismissed
79,362 cases (14 percent). Dismissals are included in ODAR's and ALJs' production
numbers. There are 10 types of dismissals, each of which may take differing
amounts of time to process. Below are the categories and the number of cases
in each category in FY 2006.
2,003 Death of claimant
2,729 Abandonment - No show to hearing
45 Improper party filed for hearing
100 Favorable Determination - Revised favorable action issued by lower level
21,511 Claimant withdraws request for hearing
614 Favorable determination made on new claim
3,991 Claimant has no right to hearing
2,361 Other - Appeals Council remands or earlier application
765 Special - Used under management direction
5,243 Untimely request for hearing and no good cause
Preliminary analyses of cases processed in FY 2006 show that the average processing
time for dismissals was longer than the average processing time for all cases.
Further, the average processing time for dismissals due to the claimant's death
had the longest processing time of all dismissals.
Hearing Office Remand Processing
Objective
To determine whether hearing offices are appropriately reviewing and processing
remands as required.
Background
As part of the hearings and appeals process for claimants, the Appeals Council
can remand a case to an ALJ for additional review. A remand order requires that
an ALJ issue a new decision. In addition, the remand order may direct an ALJ
to take further action, such as developing evidence or holding a supplemental
hearing. The Appeals Council has the authority to review and remand a case if
there is
an appearance of abuse of discretion by the ALJ;
an error of law;
an action, finding or conclusion by the ALJ that is not supported by substantial
evidence; or
the existence of a broad policy or procedural issue that may affect the general
public interest.
Initial Disability Determination Services' Determinations Subsequently Allowed
by the Office of Disability Adjudication and Review
Objective
To analyze trends in initial DDS decisions reversed by ODAR.
Background
SSA faces a considerable challenge in processing the approximately 740,000 cases
pending in ODAR.
We analyzed the 453,432 cases ODAR closed in FY 2006 that were appeals of initial
DDS decisions. Of these, ODAR reversed 330,207 cases (73 percent). We analyzed
the impairments with an ODAR reversal rate of 75 percent or greater and found
that 4 impairments most frequently appealed accounted for 218,698 (48 percent)
of the 453,432 initial cases decided by ODAR in FY 2006.
Medical Consultant Contracts Review
Objective
To ensure SSA had appropriate oversight over contracts with medical consultants
in FY 2006. Specifically, we will determine whether
SSA received the services prescribed;
there are differences in how the contracts were monitored in SSA's regional
offices and Headquarters; and
best practices related to the oversight of the contracts.
Background
Medical consultant services are contracted with physicians and other medical
providers (psychologists, speech pathologists, etc.) by each regional office.
The medical consultants are contracted to review certain medical decisions rendered
by the each State DDS. The sample of cases to review is selected by each region's
Disability Quality Branch. In each region, the contracting officer works with
the medical consultants while a team of project officers from the Center for
Disability unit certifies the medical consultants performed the contracted work.
In FY 2006, there were 654 medical consultants providing medical reviews nationwide.
These contracts totaled about $33.1 million.
The Social Security Administration's Disability Insurance Triennial Redetermination
Process
Objective
To determine whether SSA is properly identifying and processing cases subject
to the triennial redetermination process.
Background
DI beneficiaries whose benefits have been offset for 3 consecutive years because
of WC benefits are eligible for a triennial redetermination. When SSA conducts
a triennial review, staff is required to obtain current WC verification if the
verification on file is more than 1 year old.
The Social Security Administration's Ticket to Work-Cost-Effectiveness
Objective
To determine whether the costs of the Ticket to Work and Self-Sufficiency Program
(Ticket Program) have led to sustained economic self-sufficiency for disabled
beneficiaries and generated savings for SSA.
Background
The Ticket Program was established by the Ticket to Work and Work Incentives
Improvement Act of 1999. The Ticket Program provides eligible DI beneficiaries
and SSI recipients with tickets, which can be used to obtain State Vocational
Rehabilitation Agency or Employment Network services. The Program was intended
to provide beneficiaries with greater freedom and choice of service providers
and increase the access and quality of rehabilitation and employment services
available. To date, SSA has mailed over 12 million tickets to disabled beneficiaries.
As of March 30, 2007, approximately 165,500 tickets had been assigned.
Use of Video Hearings to Reduce the Hearing Case Backlog
Objective
To determine whether ODAR's use of video hearings has increased the number of
hearings scheduled and heard, increased dispositions, minimized travel by ALJs,
reduced pending caseload, and decreased processing time.
Background
Video hearings allow ALJs to conduct hearings without being in the same location
as the claimant and representative. In FY 2006, ODAR held 40,000 hearings using
video equipment. SSA has installed 376 video hearing units.
During video hearings, the ALJ sees and speaks with the claimant and anyone
who accompanies the claimant via a television screen. A person at the videoconference
site monitors the equipment and assists the claimant before and during the hearing.
The claimant can see and speak with the ALJ and anyone who is with the ALJ or
at another video teleconference site, such as a medical or vocational expert.
The audio/ visual transmission is secure, and the hearing is not videotaped.
An audio recording is made for the case record.
IMPROPER PAYMENTS AND RECOVERY OF OVERPAYMENTS
Improper payments are defined as any payment that should not have been made
or was made in an incorrect amount under statutory, contractual, administrative,
or other legally applicable requirements. Examples of improper payments include
payments made to ineligible recipients, duplicate payments, and payments that
are for the incorrect amount. Furthermore, the risk of improper payments increases
in programs with a significant volume of transactions, complex criteria for
computing payments, and an overemphasis on expediting payments.
SSA and the OIG have discussed such issues as detected versus undetected improper
payments and avoidable versus unavoidable overpayments that are outside the
Agency's control and a cost of doing business. OMB issued specific guidance
to SSA to only include avoidable overpayments in its improper payment estimate
because those payments can be reduced through changes in administrative actions.
Unavoidable overpayments that result from legal or policy requirements are not
to be included in SSA's improper payment estimate.
The President and Congress continue to express interest in measuring the universe
of improper payments in the Government. In August 2001, OMB published the President's
Management Agenda, which included a Government-wide initiative for improving
financial performance, including reducing improper payments. The Improper Payments
Information Act of 2002 was enacted in November 2002, and OMB issued guidance
in May 2003 on implementing this law. In August 2006, OMB updated and revised
this guidance. Significant updates to the guidance include new language to clarify
the definition of an improper payment and clarification of OMB's authority to
require that agencies track programs with low error rates (that is, less than
2.5 percent) but significant improper payment amounts.
In FY 2006, SSA issued over $575 billion in OASDI and SSI benefit payments to
about 53 million people-and some improper payments are unavoidable. Since SSA
is responsible for issuing timely benefit payments for complex entitlement programs
to millions of people, even the slightest error in the overall process can result
in millions of dollars in over- or underpayments.
In January 2007, OMB issued a report Improving the Accuracy and Integrity of
Federal Payments that noted that eight Federal programs-including SSA's OASDI
and SSI programs-accounted for more than 89 percent of the improper payments
in FY 2006. However, this report also noted that the OASDI error rate dropped
by one-tenth of 1 percent which translated to a $401 million reduction in improper
payments.
SSA has been working to improve its ability to prevent over- and underpayments
by obtaining beneficiary information from independent sources sooner and using
technology more effectively. For example, the Agency is continuing its efforts
to prevent payments after a beneficiary dies through the use of Electronic Death
Registration information. Also, the Agency's continuing disability review process
is in place to identify and prevent beneficiaries who are no longer disabled
from receiving payments.
In April 2006, we issued a report on overpayments in SSA's disability programs
where we estimated that SSA had not detected about $3.2 billion in overpayments
from October 2003 through November 2005 as a result of conditions that existed
as of October 2003 or earlier. We also estimated that SSA paid about $2.1 billion
in benefits annually to potentially ineligible beneficiaries. More recently,
in the second quarter of FY 2007, SSA detected about $293.7 million in new overpayments
under its DI program.
We will continue to work with SSA to identify and address improper payments
in its programs. For example, in our November 2006 review, Title II Disability
Insurance Benefits with a Workers' Compensation Offset, we found that the percentage
of payments in error identified in this report declined significantly when compared
to the percentage we reported in our prior WC offset audits. However, although
there has been improvement in reducing improper payments due to WC, we still
identified about 25,377 disability insurance claims totaling approximately $149
million that had payment errors. SSA agreed to implement the five recommendations
we made regarding this workload.
In FY 2008, we plan to complete 22 reviews and begin 32 reviews in this area.
Adjustment of Overpayment Balances Related to Critical Payments
Objective
To determine whether overpayment balances were properly adjusted after the issuance
of a critical or immediate payment.
Background
When the amount of benefits paid is more than the amount due, the difference
is an overpayment. Once detected, the liable individual is sent an overpayment
notice of the debt and the options available. The overpayment notice provides
an explanation of how and when the overpayment occurred.
If the liable individual questions the overpayment determination, SSA will not
interrupt the benefit payments until there is a final decision. However, when
a beneficiary fails to respond timely, withholding of monthly benefits will
occur to recover the overpayment. For beneficiaries who depend on Title II benefits
to meet living expenses, SSA's withholding can create a hardship. In "critical
cases," when a beneficiary subsequently objects to the withholding, SSA
can issue a critical or immediate payment to expedite the replacement of benefits
not received.
When benefits are withheld to recover an overpayment and are later re-issued
to the beneficiary, responsible program service center technicians must adjust
(or update) the beneficiary's Recovery of Overpayments, Accounting and Reporting
Record to show the overpayment amount is still outstanding.
Administrative Wage Garnishment
Objective
To assess SSA's implementation of administrative wage garnishment.
Background
The Debt Collection Improvement Act of 1996 authorizes Federal agencies to use
wage garnishment to collect delinquent debts, including those owed to SSA. Administrative
wage garnishment is a process whereby an employer withholds amounts from an
employee's wages and pays those amounts to the employee's creditor.
The Agency decided to implement administrative wage garnishment in phases. The
first phase included prospective debts, or debt that became delinquent after
January 2005. The last phase, which included debt delinquent prior to January
2005, was implemented in August 2006. As of January 29, 2007, SSA had about
7,381 active administrative wage garnishment accounts totaling about $102,738,483
in overpayments. SSA reported it had collected about $1,576,364 in delinquent
debt using administrative wage garnishment.
Automated One-time Payments
Objective
To determine whether SSA effectively managed automated one-time payments.
Background
Automated one-time payments are out-ofcycle, one-time payments that can
be issued to Title XVI recipients. In a recent fraud case, an SSA manager awarded
SSI payments to individuals not otherwise authorized to receive SSI. In a hand-written
note, the manager stated an ALJ awarded the individual retroactive, multi-year
benefits. He prepared SSA Forms 4618 authorizing payment and requested the claims
representative process the payments.
The manager also authorized automated onetime payments on legitimate SSI
records but diverted the payments to bank accounts controlled by friends. In
these instances, overpayment notices were generated to the innocent recipients.
However, in most instances, the recipients repaid the overpayments without question.
The manager redirected more than $300,000 before his actions were detected.
Disabled Individuals Potentially Eligible as Auxiliary Beneficiaries
Objective
To determine whether SSI recipients are eligible as auxiliary beneficiaries
for OASDI benefits as disabled children.
Background
The SSI program provides cash assistance to individuals who have limited income
and resources and who are either age 65 or older, blind or disabled. The OASDI
program provides benefits to qualified retired and disabled workers and their
dependents, and to survivors of insured workers. According to SSA policy, an
application for benefits under any one program is considered an application
for all programs administered by the Agency.
Individuals receiving SSI payments may also be eligible for OASDI benefits as
disabled children. A date of disability onset before age 22 could allow applicants
to become eligible for OASDI payments as disabled children. These individuals
may be eligible based on their parents' entitlement to OASDI benefits, or upon
a parents' death. Generally, non-medical factors are not considered when determining
eligibility for benefit payments when applicants are classified as disabled
children under the OASDI program. For example, an individual's resources are
not considered by the Agency when determining OASDI eligibility.
Dually Entitled Beneficiaries Subject to Government Pension Offset and the Windfall
Elimination Provisions
Objective
To determine whether SSA properly imposes Government Pension Offset and Windfall
Elimination Provisions for dually entitled beneficiaries.
Background
The Windfall Elimination Provision of the Act eliminates "windfall"
Social Security benefits for retired and disabled workers receiving pensions
from employment not covered by Social Security. Under this provision, a modified
benefit formula is used to determine a wage earner's monthly benefit.
The Government Pension Offset provision reduces monthly benefits for spouses,
divorced spouses, and surviving spouses who also receive a pension based on
their own work for a State or local government that was not covered by Social
Security. The Government Pension Offset reduction is equal to two-thirds of
the government pension.
Follow-up: Impact on the Social Security Administration's Programs When Auxiliary
Beneficiaries Do Not Have Their Own Social Security Numbers
Objective
To determine whether SSA implemented the recommendations from our September
2002 report, Impact on the Social Security Administration's Programs When Auxiliary
Beneficiaries Do Not Have their Own Social Security Numbers.
Background
Auxiliary beneficiaries are children, widows, spouses and parents who receive
OASDI benefits based on another wage earner's Social Security record. As such,
the primary wage earner's SSN - not the auxiliary beneficiary's SSN - is used
to track the auxiliary beneficiary's benefit payments on the MBR. SSA commonly
refers to the auxiliary beneficiary's SSN as the Beneficiary's Own Account Number.
Our 2002 audit found that SSA's ability to ensure payment accuracy in the OASDI
and SSI programs was impacted when auxiliary beneficiaries did not have their
own SSN on the primary wage earner's MBR. Specifically, we found 126,471 auxiliary
beneficiaries receiving benefits as of August 2001 whose SSNs were missing from
the MBR, and we identified approximately $8.91 million incorrectly paid because
SSNs were missing.
Follow-up: The Social Security Administration's Management of its Federal Employees'
Compensation Act Program
Objective
To determine the extent to which SSA implemented certain recommendations from
our October 2001 report, The Social Security Administration's Management of
its Federal Employees' Compensation Act Program.
Background
During our prior review, we assessed SSA's management of its Federal Employees'
Compensation Act (FECA) program. In addition, we reviewed the extent to which
SSA implemented other related audit recommendations.
We will review the actions taken by the Agency to implement our prior recommendations.
Manual Override of System Calculations of Supplemental Security Income Payments
Objective
To determine whether SSA's internal controls are adequate to ensure manual overrides
of system calculations for SSI payments are reviewed in accordance with SSA's
policies and procedures.
Background
In 1972, Title XVI of the Act established the SSI program, which is a nationwide
Federal cash assistance program that guarantees a minimum level of income to
financially needy individuals who meet certain criteria.
When SSA's automated system cannot compute an accurate SSI payment, the payment
must be manually computed, and the system must be forced to pay the manually
computed amount (force due cases).
Any qualified employee designated by management may manually override system-calculated
SSI payments. SSA policy requires peer or higher review of all forced payments.
Documentation of the review should be recorded in SSA's system.
Old-Age, Survivors and Disability Insurance Benefits Affected by Government
Pensions
Objective
To determine whether applicable reductions occurred to OASDI benefits as a result
of beneficiaries receiving government pensions.
Background
Two provisions of the Act can impact OASDI benefits of individuals who are also
receiving pensions from non-Federal Insurance Contributions Act taxable wages.
First, the Windfall Elimination Provision affects the computation of OASDI benefits
for individuals receiving such payments based on their own earnings. Second,
the Government Pension Offset Provision affects OASDI benefits made to spouses.
When these provisions are applicable, beneficiaries receive reduced OASDI benefits.
However, under Government Pension Offset, the OASDI benefits can be eliminated.
SSA relies on beneficiaries to report their government pensions. Failure to
report the receipt of a pension or annuity based on non-Federal Insurance Contributions
Act taxable wages after 1956 could result in overpayments and monetary penalties.
Overstated Earnings and Their Impact on Title XVI Recipients
Objective
To determine what impact intentionally overstated self-employment income has
on individuals receiving Title XVI payments.
Background
SSA is responsible for maintaining accurate individual earnings records. Self-employed
individuals report their self-employment income on the appropriate Federal income
tax schedules. This self-employment income is posted to the MEF. SSA uses earnings
posted to the MEF to determine eligibility for retirement, survivors, disability,
and health insurance benefits and to calculate benefit amounts.
In a prior audit, we reviewed overstated self-employment income related to the
Title II beneficiaries and found that beneficiaries were reporting false earnings
on their Federal income tax form to receive the IRS' Earned Income Tax Credit.
Title II beneficiaries would file tax returns with self-employment income, receive
the Earned Income Tax Credit, and later disclaim the self-employment income
to SSA.
Title XVI benefits are adjusted downward when SSA becomes aware of earnings.
When the earnings are removed, the benefits are adjusted upwards.
Retirement Benefits Payable to Spouses and Surviving Spouses over Age 70
Objective
To determine the effectiveness of SSA's controls and procedures to ensure spouses
and surviving spouses who postpone retirement to accumulate delayed retirement
credits receive the highest benefits due them after age 70.
Background
The Act requires that spousal and survivor benefits be terminated when the beneficiary
becomes entitled to retirement or disability benefits that equal or exceed one-half
of the worker's primary insurance amount. However, SSA does not terminate the
spousal or survivor benefits until the beneficiary reapplies for the higher
retirement or disability benefits.
The delayed retirement credit is a monthly credit awarded to workers who are
eligible for, but are not paid, retirement benefits from full retirement age
until age 70. The delayed retirement credit increases the amount of benefits
payable to eligible workers who voluntarily postpone retirement. Currently,
the delayed retirement credits provide for annual increases of up to 8 percent
in retirement benefits.
Social Security Administration Employees Receiving Benefits
Objective
To identify SSA employees receiving OASDI benefits inappropriately by not reporting
their earnings.
Background
Individuals are disabled under SSA's regulations if they are unable to engage
in SGA by reason of any medically determinable physical or mental impairment
that can be expected to result in death or has lasted, or can be expected to
last, for a continuous period of no less than 12 months.
SGA is defined as work that involves significant physical or mental activities
performed for pay or profit. SSA has established earnings guidelines to determine
whether an individual is engaged in SGA. Average monthly earnings of over $900
may indicate the ability to engage in SGA. Because an individual's entitlement
to disability benefits is based on the determination that he/she cannot engage
in SGA, SSA must perform a continuing disability review when earnings indicate
the beneficiary has returned to work.
The annual earnings test is used to determine whether retirement beneficiaries
below the full retirement age have earnings over the annual exempt amount-$12,480
in 2006 and $12,960 in 2007. Beneficiaries who are younger than full retirement
age and earn over the annual exempt amount should receive reduced benefits.
Status of Repayment Agreements
Objective
To determine whether overpaid beneficiaries who have agreements with SSA to
make installment payments to repay the improper payments are doing so according
to the agreement.
Background
Generally, SSA has two types of debt that are determined by entitlement status
(1) current pay debt, owed by individuals who receive benefits and (2) nonpay
debt, owed by those who are not on the benefit rolls.
SSA's collection process depends mainly upon the debtor's entitlement status.
When the debtor is a beneficiary, SSA's initial overpayment letter informs the
individual that, if full repayment is not made, recovery will be accomplished
through offset of future benefits.
If the debtor is no longer a beneficiary, SSA sends an initial overpayment letter
requesting payment in full or by regular installments. If no payment is received,
SSA uses its billing and follow-up system to send a series of progressively
stronger follow-up notices, then has debt collectors attempt personal contact
to establish a repayment agreement. At any time during this process that the
individual contacts SSA to establish a repayment arrangement, SSA's debt collectors
negotiate an arrangement with the individual and set up the account for monthly
billing. If the individual misses any of the monthly payments, a follow-up process
is set in motion.
Supplemental Security Income Recipients with Automated Teller Machine Withdrawals
Indicating They Are Outside the United States
Objective
To determine whether automated teller machine data can be used to identify SSI
recipients in current pay status who appear to be outside the United States
for longer than 30 days and no longer eligible for payments.
Background
The Act states that no individual shall be considered eligible for SSI payments
for any month they are outside the United States. Additionally, the Act states
that "
after an individual has been outside the U.S. for any period
of 30 consecutive days, he shall be treated as remaining outside the U.S. until
he has been in the U.S. for a period of 30 consecutive days."
A July 2003, GAO report SSI: SSA Could Enhance Its Ability to Detect Residency
Violations noted that overpayments resulting from residency violations totaled
about $118 million between 1997 and 2001, and recipients born outside the United
States accounted for at least 87 percent of these overpayments. The $118 million,
however, only represented violations detected by SSA. Our review will obtain
automated teller machine withdrawal records from financial institutions to help
identify SSI recipients who may be accessing their SSI payments outside the
United States for extended periods of time.
The Social Security Administration's Computation of Delayed Retirement Credits
Objective
To determine whether SSA accurately adjusts benefits of retired wages earners
for delayed retirement credits.
Background
Individuals may increase the amount of retirement benefits they will receive
by delaying retirement beyond full retirement age. The amount of the increase,
referred to as a delayed retirement credit, depends on the number of months
a worker was at least full retirement age and fully insured and eligible for
retirement benefits but did not receive benefits because he or she was working
or had not filed an application for benefits. Workers can continue to earn delayed
retirement credits until they attain age 70.
The Social Security Administration's Controls over Deleted Title II Overpayments
Objective
To determine whether deleted Title II overpayment actions were proper and did
not result in the elimination of a valid overpayment.
Background
An overpayment is the total amount an individual received for any period that
exceeds the total amount that should have been paid for that period. An overpayment
for which a refund is requested or an adjustment is proposed against the person
primarily liable is established on an overpayment accounting system known as
Recovery of Overpayments, Accounting and Reporting.
Each Recovery of Overpayments, Accounting and Reporting record is established
by SSN and, in most cases, includes recent actions processed against the record,
the cause of the overpayment, overpayment amount and status, remittance agreement
status where applicable, reconsideration and waiver information and identification
of the individual liable for the overpayment.
The Social Security Administration's Use of Administrative Sanctions
Objective
To determine whether SSA is using administrative sanctions to the fullest extent
possible as a deterrent to fraud and abuse in its programs.
Background
Amendments to the Act, effective December 1999, authorize the Agency to impose
a period of benefit suspension as a deterrent to fraud and abuse of SSA's programs
and operations. Administrative sanctions can be imposed on benefits under certain
conditions.
When a sanction is imposed, the claimant will not receive benefit payments for
the duration of the sanction period. The length of the penalty for sanctioned
individuals increases with each offense. The individual is sanctioned by suspension
of their payments for 6, 12, or 24 months for the first, second, or third offense,
respectively.
Title II Beneficiaries in Canada
Objective
To verify the existence of Title II beneficiaries residing in Canada and ensure
SSA's records are accurate.
Background
Under the Title II program, SSA pays retirement, disability or survivor benefits
to eligible individuals and/or their family members. Unlike the SSI program,
there is no prohibition against receiving Title II benefits while residing in
a foreign country. However, because these beneficiaries reside outside the United
States, we believe there is an increased risk that SSA will not timely detect
events (such as death) that could impact the beneficiaries' eligibility for
payments.
Of the approximately 400,000 Title II beneficiaries residing outside the United
States, about 97,000 have a Canadian address. Also, about 95 percent of the
beneficiaries in Canada are over 65 and receiving retirement benefits. The remaining
5 percent are either receiving disability or survivor benefits.
In April 2007, an appendix to the existing Administrative Understanding on Mutual
Assistance between Canada and the United States was approved by both countries
allowing for a project to verify the existence of a sample of beneficiaries
in both Canada and the United States.
Title II Benefits to Fugitives
Objective
To quantify the actual savings achieved and determine the final outcome for
Title II beneficiaries identified as fugitives.
Background
Section 202(x)(1)(A) of the Act, as amended by Public Law No. 108-203, provides
that, beginning January 2005, no monthly benefits will be paid to any individual
for any month during which he/she has an unsatisfied Federal, state or international
law enforcement warrant for more than 30 continuous days for a
crime, or attempted crime, that is a felony or, in jurisdictions that do not
classify crimes as felonies, a crime that is punishable by death or imprisonment
for more than 1 year (regardless of the actual sentence imposed) or violation
of a condition of probation/ parole imposed under Federal or State law.
Underpayments Payable on Behalf of Terminated Title II Beneficiaries
Objective
To determine whether SSA takes appropriate actions to pay underpayments due
terminated beneficiaries.
Background
A Title II underpayment is a benefit amount due an entitled individual that
has not been paid. Underpayments usually result from unpaid accrued benefits
or unnegotiated checks to deceased individuals. An underpayment due a living
person will generally be paid automatically to the individual or representative
payee. An underpayment due a deceased person can be claimed by third parties,
such as auxiliary beneficiaries.
Unprocessed Annual Earnings Test Workload
Objective
To assess SSA's efforts in resolving its backlog of unprocessed records that
are subject to the annual earnings test.
Background
Social Security benefits are meant to replace, in part, earnings lost to an
individual or family because of retirement, disability or death. SSA uses an
earnings test to measure the extent of a beneficiary's retirement and determine
any amounts to be deducted from monthly benefits. Benefit deductions are made
from benefits due any beneficiary under full retirement age who earns an amount,
either in wages or self-employment income or both, over the annual exempt amount.
SSA compares the earnings posted to the MEF with the amount on the MBR. This
process, called the Earnings Enforcement Operation, is designed to detect potential
over- and underpayments for beneficiaries subject to the annual earnings test.
SSA then adjusts beneficiaries' payments based on the earnings on the MEF. SSA
performs the Earnings Enforcement Operation three times per year, after the
end of each calendar year-usually in May, July, and the following February.
Unprocessed Manual Recalculations for Title II Overpayments
Objective
To determine whether SSA (1) adjusts Title II benefits when earnings are removed
from beneficiaries' earnings records and (2) calculates and assesses over- and
underpayments when appropriate.
Background
SSA's Title II program depends on accurate earnings information to determine
whether an individual is eligible for benefits and calculate the amount of benefit
payments. Hence, new, removed, and adjusted earnings may change benefit amounts.
Benefit recalculations based on new earnings are initiated through SSA's Automated
Earnings Reappraisal Operations system, which is a process that screens earnings
records that have changes in earnings information and computes the necessary
changes. Automated Earnings Reappraisal Operations adjust benefits when earnings
are added to a beneficiary's earnings record. However, when earnings are removed,
the system generates an alert that must be manually processed by SSA employees.
INTERNAL CONTROL ENVIRONMENT AND PERFORMANCE MANAGEMENT
Sound management of public programs includes effective internal control and
performance management. Internal control comprises the plans, methods and procedures
used to meet missions, goals and objectives. SSA management is responsible for
establishing and maintaining internal controls to achieve the objectives of
effective and efficient operations, reliable financial reporting and compliance
with applicable laws and regulations. Similarly, SSA management is responsible
for determining whether the programs it manages achieve intended objectives.
OMB Circular A-123 requires that SSA develop and implement cost-effective internal
controls for results-oriented management. Internal controls are important when
SSA works with third parties to help complete its important workloads. For example,
disability determinations under DI and SSI are performed by DDSs in each State.
DDSs are responsible for determining claimants' disabilities and ensuring adequate
evidence is available to support its determinations. SSA reimburses the DDS
for 100 percent of allowable expenditures up to its approved funding authorization.
We conduct audits of state DDSs to ensure the costs they claimed are allowable,
and the DDSs have proper internal controls over the accounting and reporting
of the administrative costs SSA reimburses.
From FY 2000 through September 2007, we conducted 61 DDS administrative cost
audits. In 32 of the 61 audits, we identified internal control weaknesses and
over $110 million in questioned costs and/or funds that could be put to better
use. Fourteen of the 61 audits conducted were completed in FY 2007. Six of these
reports noted similar control weaknesses identified in DDS audits in previous
years and over $28 million of questioned costs and/or funds that could be put
to better use. We believe the large dollar amounts claimed by State DDSs and
the control issues we have identified warrant that this issue remains a major
management challenge.
Another area that involves third parties and requires effective internal controls
is the selection and oversight of contractors. Contracting is increasingly seen
as an effective way to support Federal agencies in managing increasing workloads
with diminished levels of staff. In FY 2006, SSA spent over $820 million on
contracts. We will review multiple contracts in FY 2008 to ensure SSA is getting
the services it is paying for and that SSA has proper internal controls in place
to ensure effective oversight of contractors.
Multiple initiatives have highlighted the importance of performance management.
The Government Performance and Results Act requires that SSA develop multi-year
strategic and annual performance plans that establish its strategic and performance
goals. The PMA has focused on the integration of the budget and performance
measurement processes. The PMA calls for agencies to identify high quality outcome
measures, accurately monitor program performance, and integrate this presentation
with associated costs. OMB developed the Program Assessment Rating Tool (PART)
to identify government programs' strengths and weaknesses and inform funding
and management decisions aimed at making the programs more effective. The PART
includes a review of multiple factors that affect and reflect performance including
program purpose and design; performance measurement, evaluations, and strategic
planning; program management; and program results. In FY 2008, we will continue
to assess SSA's ability to manage performance and meet the goals established
to accomplish SSA's mission and serve the American public.
In FY 2008, we plan to complete 25 reviews, begin 24 reviews, and oversee the
reviews of 4 performance measures in this area.
Administrative Costs Claimed by the Alabama, Colorado, Connecticut, District
of Columbia, Georgia, Kentucky, Michigan, Nebraska, New Mexico, Rhode Island
and Washington State Disability Determination Services
Objective
To (1) evaluate the DDS' internal controls over the accounting and reporting
of administrative costs, (2) determine whether costs claimed by the DDS were
allowable and funds were properly drawn, and (3) assess limited areas of the
general security controls environment.
Background
Disability determinations under both DI and SSI are performed by an agency in
each State in accordance with Federal regulations. In carrying out its obligation,
each State agency is responsible for determining claimants' disabilities and
ensuring adequate evidence is available to support its determinations.
CESSI Incurred Cost Rates for Fiscal Years 2006 and 2007
Objective
To evaluate the indirect cost rates as reported in the CESSI indirect cost rate
proposals. We will determine whether the costs used to develop these rates were
reasonable, allowable, and allocable in accordance with the contract terms and
applicable Government acquisition regulations.
Background
CESSI corporation offers various program management and operations services
to Federal clients. In FYs 2006 and 2007, CESSI was an SSA contractor. CESSI
must submit indirect cost proposals to the cognizant Federal agency for approval.
For the years of our audit, SSA was the cognizant agency.
Compliance with On-site Security Control and Audit Review Requirements--DDSs
and Program Service Centers
Objective
To assess SSA's procedures for (1) selecting offices for On-site Security Control
and Audit Reviews (OSCAR), (2) ensuring appropriate coverage of vulnerable areas,
(3) correcting identified deficiencies, and (4) using the results to improve
the overall OSCAR process.
Background
SSA designed the OSCAR program to comply with the Federal requirements associated
with management controls and provide assurance the financial, program and administrative
processes are functioning as intended. These requirements include the Federal
Managers' Financial Integrity Act.
SSA conducts OSCARs at DDSs, field offices, teleservice centers, hearing offices,
and program service centers. OSCARs cover program and administrative functions.
For example, the field office OSCARs cover third-party draft accounts; acquisitions;
refund and remittance processes; time and attendance; security of automated
systems; physical and protective security; enumeration; and integrity review
areas.
Successful implementation of the OSCAR process, as well as appropriate follow
up on problem areas, can correct deficiencies in SSA's programs, ensure adequate
controls, and reduce the potential risk to the safety of Federal employees and
the public, Federal resources, and sensitive information.
Contract Audits
Background
ABT Associates-This contract is to develop a multi-site, demonstration project
that tests alternate methods of treating work activity in the Title II disability
program. This award was conditional upon successful performance of the design
phase. The contract period is September 30, 2004 to June 30, 2007 in the amount
of $5,504,081.
E-Structors, Inc.-To provide off-site commercial document destruction and recycling
services for various buildings at SSA Headquarters and several leased facilities
in Woodlawn, Maryland. The contract was awarded in September 2006 for $55,500.00.
Lockheed Martin Government Services, Inc.-To provide scanning of medical and
non-medical evidence, and provides related activities, including data transmission,
and electronic and paper document control to support SSA offices, DDSs and the
eDIB initiative.
MDRC-For program review/development services to test the impact of providing
immediate cash benefits and Medicare to Title II applicants. The contract is
for $41 million for the contracted service period from January 2006 through
January 2011.
Unified Consultants Group-To analyze existing security measures in SSA facilities
and provide findings and recommendations for corrective actions to enhance the
Agency's physical security programs. Option year I was funded and will extend
through September 28, 2007. There is another option year through September 28,
2008, which SSA plans to exercise.
Controls over Benefit Payments in Instances where the Social Security Administration
Removed a Death Entry from the Beneficiary's Record
Objective
To evaluate the appropriateness of benefits paid in instances when SSA has removed
a death entry for a current beneficiary.
Background
SSA will accept and post an individual's death on their record when the death
is reported by the individual's relative, friend, neighbor, or other source.
The person who reports the death must provide SSA with the name, date of birth,
and SSN of the deceased individual before SSA can add the death to the DMF.
Erroneous death entries can lead to benefit termination and result in severe
financial hardship and distress to the beneficiary/recipient. Conversely, the
removal of legitimate death entries could allow for the authorization and payment
of fraudulent retirement and disability benefits.
If a death report is posted in error, SSA will delete the death entry from the
DMF (resurrect the record) and, when applicable, reinstate benefit payments.
SSA employees may only process transactions to resurrect a record when presented
with proof the original death entry was posted in error. Unless it is an administrative
error, a face-to-face interview is required. To validate the integrity of these
transactions, SSA requires that two employees process the resurrection. SSA
requires that employees document the circumstances surrounding the resurrection
and reinstatement.
Controls over the Social Security Administration's Transit Subsidy Program
Objective
To determine whether SSA employees receiving transit benefits are qualified
to receive this benefit and using them as intended.
Background
The transit benefit program covers 300,000 Federal employees nationwide. A recent
GAO review found workers in the Washington D.C. metropolitan area have defrauded
the Government of at least $17 million. GAO monitored sales on eBay over 3 days
in August 2006 and found 58 people were selling Metrochek cards. GAO investigated
20, all of whom were Federal employees.
Fiscal Year 2007 Financial Statement Audit Oversight
Objective
To fulfill our responsibilities under the Chief Financial Officers Act and related
legislation for ensuring the quality of the audit work performed, we will monitor
PricewaterhouseCoopers' audit of SSA's financial statements.
Background
The Chief Financial Officers Act requires that agencies annually prepare audited
financial statements. Each agency's Inspector General is responsible for auditing
these financial statements to determine whether they provide a fair representation
of the entity's financial position. This annual audit also includes an assessment
of the agency's internal control structure and its compliance with laws and
regulations. The audit work to support this opinion of SSA's financial statement
will be performed by PricewaterhouseCoopers. We will monitor the contract to
ensure reliability of PricewaterhouseCoopers' work to meet our statutory requirements
for auditing the Agency's financial statements.
Fiscal Year 2007 Inspector General Statement on the Social Security Administration's
Major Management Challenges
Objective
To summarize for inclusion in SSA's Performance and Accountability Report, our
perspective of the most serious management and performance challenges facing
SSA.
Background
In November 2000, the President signed the Reports Consolidation Act of 2000,
which requires that Inspectors General provide a summary and assessment of the
most serious management and performance challenges facing Federal agencies and
the agencies' progress in addressing them. This assessment is included in SSA's
annual Performance and Accountability Report.
The top management issues facing SSA in FY 2007, as determined by the Office
of the Inspector General, are listed below.
1. Social Security Number Protection
2. Management of the Disability Process
3. Improper Payments and Recovery of Overpayments
4. Internal Control Environment and Performance Measures
5. Systems Security and Critical Infrastructure Protection
6. Service Delivery and Electronic Government
MAXIMUS' Youth Continuing Disability Review Contract Closeout
Objective
To determine the allowability of the direct costs and apply the final indirect
rates to compute the total allowable contract costs submitted.
Background
On September 30, 1999, SSA awarded a $3,830,941 Youth Continuing Disability
Review contract to assist young SSI recipients with disabilities in becoming
gainfully employed. The contract period of performance was September 3, 1999
through September 30, 2002.
The purpose of this initiative is to assess the impact of a more proactive approach
on the successful transition of 15 to 17 year old SSI recipients from school
and/or the SSI disability rolls to work. The desired outcomes are to inform
and motivate young SSI recipients about work; assist them in transitioning to
work; inform them of the vocational rehabilitation process; and decrease benefit
costs.
Oversight of the Social Security Administration's Contract with SourceLink to
Mail Social Security Statements
Objective
To examine the contractor's quality control processes to ensure the annual Social
Security Statements contain valid addresses. Also, we will evaluate SourceLink's
compliance with the Contractor Processing Security Requirements.
Background
SSA provides annual statements with benefits and earnings information to individuals
over the age of 25 who are not in benefit status. These individuals must have
an SSN, wages or earnings from self-employment, and a valid mailing address.
Each statement is required to contain an (1) estimate of potential monthly Social
Security benefits, (2) annual listing of wages and self-employment income earned,
and (3) estimate of Social Security and Medicare taxes paid. These statements
are generally mailed about 3 months before the individual's birthday.
Since these mailings began in October 1999, a large number have been returned
because the addresses are incorrect. During our audit of The Security Administration's
Ability to Reach Individuals Using the Social Security Statements, we determined
that, during a 5day period, approximately 166,000 Statements were returned
as undeliverable; there were instances where envelopes were empty; Statements
were improperly inserted in the envelopes; or envelopes contained incomplete
mailing addresses.
Performance Indicator Audits: Earnings, Hearings and Appeals, Post-entitlement
Disability Actions, and Disability Determination Service Processing
Objective
To determine the reliability of the performance data SSA uses to measure selected
performance indicators.
Background
Congress passed GPRA to bring greater accountability to Federal agencies. GPRA
establishes a system for strategic and annual performance planning and reporting
to set goals for program performance and to measure results. The law requires
that each agency create (1) 5-year strategic plans, (2) annual performance plans,
and (3) annual performance reports. SSA released its latest strategic plan,
which covers FYs 2006 through 2011, in 2006. The Agency's 2008 annual performance
plan was released in February 2007. It presents 4 strategic goals, 38 GPRA performance
measures, and 17 Program Assessment Rating Tool performance measures.
The success of SSA's performance measurement initiatives hinges on the quality
of the data used to measure and report on program performance. Therefore, it
is important that SSA have assurance that the data reported are reliable and
meaningful and its performance report will be useful to Congress and SSA management.
SYSTEMS SECURITY AND CRITICAL INFRASTRUCTURE PROTECTION
The vulnerability of critical infrastructures and the unique risks associated
with networked computing have been recognized for some time. Federal Agencies
rely heavily on information technology to run their daily operations and deliver
products and services. With an increasing reliability on information technology,
a growing complexity of Federal information technology infrastructure, and a
constantly changing information security threat and risk environment, information
security has become a mission-essential function. This function must be managed
and governed to reduce the risks to Federal operations and to ensure the Government's
ability to do business and serve the American public.
Federal agencies maintain significant amounts of information concerning individuals
known as personally identifiable information. The loss of personally identifiable
information can result in substantial harm, embarrassment, and inconvenience
to individuals and may lead to identity theft or other fraudulent use of the
information. Agencies have a special duty to protect that information from loss
and misuse. OMB issued three memorandums in FY 2006 regarding the protection
of personally identifiable information.
SSA's information security challenge is to understand and mitigate system vulnerabilities.
At SSA, this means ensuring the security of its critical information infrastructure
and sensitive data. A recent incident of the massive loss of personally identifiable
information of a Federal agency demonstrates the importance of data security.
The public will be reluctant to use electronic access to SSA services if it
does not believe the Agency's systems and data are secure. Without due diligence,
sensitive information can become available to those who are not entitled to
it and may use it for personal gain. To address increasing workloads and the
changing work environment, SSA constantly introduces new technologies, such
as the Internet Protocol version 6 (IPv6) and Voice Over Internet Protocol (VoIP).
New technology often brings advantages but also presents new security challenges.
The Agency needs to understand and address potential risks before such technology
is implemented.
SSA addresses critical information infrastructure and systems security in a
variety of ways. For example, it has created a Critical Infrastructure Protection
work group that works toward compliance with various directives, such as the
Homeland Security Presidential Directives (HSPD) and the Federal Information
Security Management Act of 2002 (FISMA). SSA created pages on its Intranet site
on how to properly protect PII. In addition, SSA plans to minimize the risks
associated with a single, national computing facility by acquiring a second,
fully functional, co-processing data center.
HSPD 12 mandates the development of a common identification standard for all
Federal employees and contractors. Federal Information Processing Standard 201,
entitled Personal Identity Verification (PIV) of Federal Employees and Contractors,
was developed to satisfy the requirements of HSPD 12. SSA worked with other
agencies and OMB to address HSPD 12 and comply with PIV I. To date, the HSPD
12 identity proofing has been completed for all employees. Registration and
issuance of HSPD 12 credentials is in the rollout phase in Headquarters as well
as in Region 2.
Under FISMA, we annually evaluate SSA's security program. FISMA requires Agencies
to institute a sound information security program and framework. Since the inception
of FISMA, we have worked with the Agency to ensure prompt resolution of security
issues. The House Government Reform Committee rated the Agency "A"
in 2006 on computer security based on its compliance with FISMA.
We continuously monitor the Agency's efforts to protect PII as well as its implementation
of new technology, such as IPv6 and VoIP, to ensure the information security
program is operating effectively.
In FY 2008, we plan to complete 10 reviews and begin 6 reviews in this area.
Decision Path Consulting Contract
Objective
To determine whether SSA has adequate controls in place for the administration,
oversight and accountability of its contract with APA Inc., DBA Decision Path
Consulting.
Background
SSA provides services through a network of community-based offices, central
processing facilities, associated State agencies, telephone centers and web
site applications. This network is supported by a staff that provides policy
guidance, human resource support, automation, infrastructure service, financial
services and administrative oversight.
SSA is developing a new Time Allocation System, which is expected to improve
the way in which workload data are captured to be used for such purposes as
determining resource requirements and measuring productivity. The Time Allocation
System project supports the Social Security Unified Measurement System and the
Managerial Cost Accountability System. These Systems use more accurate and consistent
information, provide access to management information, improve workpower allocation,
improve customer service and reduce manual work.
Decision Path Consulting will provide the program management, project management,
data warehousing, systems engineering and integration, and business intelligence
expertise required to assist SSA in developing and deploying the Time Allocation
System.
The period of contract performance is May 14, 2004 through May 13, 2008.
Development of a Single Disability Determination Services Case Processing Application
Objective
To evaluate the (1) project's internal controls, (2) effectiveness of SSA's
management of the system development life-cycle and (3) compliance with related
laws and regulations.
Background
The Social Security Act mandates that the DDS in each State make determinations
of disability for residents of that State who file for Social Security DI or
SSI benefits. DDSs are funded by SSA. Ongoing investments in DDS automation
are a critical enabler of SSA's strategic objective to position the Agency's
resources for maximum case processing in the 54 State DDSs. SSA's eDib process
means that DDSs must rely more heavily on their automated systems to process
work and meet their workload objectives.
Fiscal Year 2008 Federal Information Security Management Act
Objective
To determine whether SSA is in compliance with the Federal Information Security
Management Act for FY 2008.
Background
The Federal Information Security Management Act requires an Agency-wide information
security program and separate annual reviews of the security program performed
by the Agency and by the Office of the Inspector General. Each year, OMB issues
questions to be answered concerning agencies' compliance with the Federal Information
Security Management Act. Congress and OMB use these reports to judge how well
Agencies are protecting their critical infrastructure and sensitive information.
Physical Security at the Office of Disability Adjudication and Review's Headquarters
Building
Objective
To determine whether the ODAR building in Falls Church, Virginia, complies with
physical security standards.
Background
ODAR headquarters occupies approximately 15 floors of a 26-story commercial
building in Falls Church, Virginia. The building contains other Federal and
private tenants.
A Department of Justice study created minimum physical security standards for
Federal buildings. The President directed Federal agencies to upgrade the physical
security of their facilities based on the Department of Justice's recommendations.
SSA placed its version of the Department of Justice standards into its Administrative
Instructions Manual System.
Several Federal agencies have published physical security guidelines that go
beyond the Department of Justice minimum standards. In 2002, the Department
of Defense issued DoD Minimum Antiterrorism Standards for Buildings and made
it available to the general public. A Veterans Affairs Task Group recently recommended
that all Veterans Administration facilities adopt the Department of Defense
standards. The Federal Emergency Management Agency published considerable scientific
research to support that buildings not meeting Department of Defense standards
are vulnerable to catastrophic consequences if subjected to a terrorist attack.
Reliability and Accuracy of Social Security Administration Exhibit 300 Submissions
to the Office of Management and Budget
Objective
To determine whether SSA has implemented controls to ensure its Exhibit 300
submissions to OMB for information technology projects are based on adequate
support.
Background
Each year, Agencies submit to OMB a Capital Asset Plan and Business Case-the
Exhibit 300-to justify each request for a major information technology investment.
The Exhibit's content should reflect controls Agencies have established to ensure
good project management as well as document that Agencies have defined cost,
schedule, and performance goals. It is therefore a tool to help OMB and Agencies
identify and correct poorly planned or performing investments.
In a January 2006 report, GAO concluded that "underlying support was often
inadequate for information provided in the Exhibit 300s reviewed" and raised
questions about the accuracy and reliability of Exhibits 300. As a result, OMB
has expressed interest in having the Inspector General community ascertain the
validity of the Exhibits 300.
Risks Posed by Digital Copiers Used in Social Security Administration Offices
Objective
To determine whether SSA uses at risk digital copiers and if the use of these
digital copiers poses a threat to sensitive information.
Background
Most digital copiers manufactured in the past 5 years come with disk drives,
which, in the wrong hands, can reproduce documents. A survey that revealed more
than half of Americans did not know copiers had this data security risk. We
will determine how many of the Agency's copiers have unprotected disk drives
and who has access to the drives.
Security Review of the Social Security Administration's Internet Protocol Version
6
Objective
To review SSA's implementation of IPv6.
Background
IPv6 is used to provide more addresses for networked devices, allowing, for
example, each cellular telephone and mobile electronic device to have its own
address.
OMB mandated that all Federal agencies deploy IPv6 by June 2008. SSA has begun
its plan to implement IPv6. We will review its implementation leading up to
the deadline to determine whether major issues exist that would be more costly
to correct later.
Social Security Administration Field Offices' Management of Allegations
Objective
To assess SSA's management and review of allegations referred from the Office
of the Inspector General to SSA's field offices.
Background
We conduct and coordinate investigative activities related to SSA programs and
operations. Reports concerning instances of potential fraud, waste, abuse and
mismanagement are frequently made to our Office of Investigations' Allegation
Management Division. Often, the allegations the Division receives are referred
to SSA field offices for further review and development. Development activities
include, but are not limited to, actions to determine whether allegations can
be substantiated. SSA policies provide guidance for the appropriate steps to
complete to develop allegations of fraud.
SSANet Infrastructure Contract with Northrop Grumman Computing Systems, Inc.
Objective
To determine whether SSA has adequate controls in place for the administration,
oversight and accountability of its contract with Northrop Grumman Computing
Systems, Inc., to support the SSA enterprise-wide Network Infrastructure.
Background
SSA's contract with Northrop Grumman Computing Systems, Inc., is for support
of the SSA enterprise-wide SSANet infrastructure.
SSA's enterprise network is comprised of 1,800 SSA offices and State DDSs. These
sites are located in the 50 States, the District of Columbia, Guam, Puerto Rico
and the U.S. Virgin Islands. SSA supports network connections to approximately
115 external business partners including various State entities, other Federal
agencies and vendors. The contractor assists the Agency in installing and optimizing
hardware, software and procedures. The contract period is September 28, 2005
through September 27, 2010. The estimated systems life value of the contract
is $153.2 million.
The Social Security Administration's Voice over Internet Protocol
Objective
To determine whether SSA addressed, to an acceptable level, the known risks
associated with the implementation of VoIP telephone systems technology.
Background
VoIP is the routing of voice conversations over the Internet. In general, telephone
service via VoIP costs less than its equivalent service from traditional sources
and is similar to providers of alternative Public Switched Telephone Network
service. Cost savings can result from using a single network to carry voice
and data transmissions.
SSA is replacing its telephone system with a VoIP system. As a result, all SSA
employees and individuals or companies that interact with SSA by telephone will
be impacted.
The aspects that make the VoIP software model powerful-its flexible, open, distributed
design-make it potentially problematic. There is no central entity responsible
for the design, implementation, and monitoring of the voice service. VoIP is
an environment where many programmers can create voice applications. However,
poorly designed code opens the door to potential security vulnerabilities. Choices
regarding the invocation of security mechanisms will be in the hands of the
developer, and the testing and validation of these services may be done in a
distributed and possibly ad hoc manner.
SERVICE DELIVERY AND ELECTRONIC GOVERNMENT
One of SSA's goals is to deliver high-quality, "citizen-centered"
service. This goal encompasses traditional and electronic services to applicants
for benefits, beneficiaries and the general public. It includes services to
and from States, other agencies, third parties, employers and other organizations,
including financial institutions and medical providers. This area includes such
areas as the Medicare Prescription Drug Program, the Representative Payee Process,
Electronic
Government and Managing Human Capital.
Medicare Prescription Drug Program
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 requires
that SSA undertake several Medicare-related responsibilities. This includes
making initial low-income subsidy determinations under Medicare Part D, establishing
appeals procedures for subsidy eligibility determinations, and periodically
reviewing income and resources to verify continued eligibility.
By February 2007, SSA had rendered over 4.6 million low-income subsidy eligibility
decisions, awarding subsidies to approximately 2.1 million applicants and denying
subsidies to approximately 2.5 million applicants. Approximately 80,000 individuals
whose applications for low income subsidy were denied by SSA, appealed those
denial decisions.
Representative Payee Process
When SSA determines a beneficiary cannot manage his or her benefits, SSA selects
a representative payee who must use the payments for the beneficiary's interests.
SSA reports there are approximately 5.3 million representative payees who manage
about $49.9 billion in annual benefit payments for approximately 7.1 million
beneficiaries. While representative payees provide a valuable service for beneficiaries,
SSA must provide appropriate safeguards to ensure they meet their responsibilities
to the beneficiaries they serve. In addition, the Social Security Protection
Act of 2004 requires that SSA conduct periodic site reviews of certain types
of representative payees. As of June 2007, SSA staff reports that approximately
2,800 organizational representative payees serving 50 or more beneficiaries,
370 individual payees serving 15 or more beneficiaries, and 1,060 representative
payees who are authorized to collect a fee are subject to these periodic reviews.
During these reviews, SSA assesses the representative payee's performance by
examining beneficiaries' records, reviewing the representative payee's financial
records, and interviewing beneficiaries. Finally, if a representative payee
is problematic or SSA suspects representative payee misuse of benefits, it will
request an audit or investigation by the Office of the Inspector General.
In a July 2007 study of individual representative payees serving 14 or fewer
beneficiaries and non-fee-for-service organizational payees serving fewer than
50 beneficiaries, the National Academy of Sciences (NAS) reported that SSA should
take steps to better prevent and detect misuse of beneficiary funds. In addition,
NAS concluded that SSA's current methods to detect misuse of benefits are not
reliable. As such, NAS recommended that SSA conduct targeted reviews of those
representative payees most likely to misuse benefits. NAS estimated this approach
would identify about 7,000 cases of misuse and another 7,000 cases of possible
misuse. To identify those representative payees most likely to commit misuse,
we are planning a review to determine whether certain characteristics of representative
payees-as identified by NAS-result in an increased risk of misuse. In addition,
we are planning a review of individual representative payees who act as organizations
or operate "group homes," which NAS believes need more thorough monitoring.
Electronic Government
Electronic Government has changed the way government operates and the way citizens
relate to Government. Americans are taking advantage of e-Government services
offered to them. In the near future, SSA expects to provide cost-effective e-Government
services to citizens, businesses and other government agencies that will allow
them to easily and securely transact most of their business with SSA electronically.
SSA has five goals in support of this vision.
1. Offer citizens the e-Government services they want and need.
2. Protect on-line security and privacy and the integrity of the SSA benefit
payment process.
3. Pursue e-Government partnerships and collaborations with other government
agencies and private sector organizations.
4. Implement e-Government programs that offer sound business case justification.
5. Align the organization and invest in human capital to maximize e-Government
progress.
SSA's e-Government strategy is based on the deployment of high volume, high
payoff applications for both the public and the Agency's business partners.
To meet increasing public demands, SSA has pursued a portfolio of services that
include on-line and voice-enabled telephone transactions to increase opportunities
for the public to conduct SSA business electronically in a private and secure
environment.
Managing Human Capital
SSA, like many other Federal agencies, is being challenged to address its human
capital shortfalls. As of January 2007, GAO continued to identify strategic
human capital management on its list of high-risk Federal programs and operations.
GAO initially identified strategic human capital management as high-risk in
January 2001. In addition, Strategic Management of Human Capital is one of five
Government-wide initiatives contained in the PMA.
By the end of 2012, SSA projects its DI rolls will have increased by 35 percent.
Further, by FY 2015, 54 percent of current SSA employees will be eligible to
retire. This will result in a loss of institutional knowledge that will affect
SSA's ability to deliver quality service to the public. This, combined with
the workload increase and the incredible pace of technological change, will
have a profound impact on the public's expectations and SSA's ability to meet
those expectations.
SSA's service and staffing challenges must be addressed by succession planning,
strong recruitment and retention efforts, increased training, and the effective
use of technology. As of June 30, 2007, SSA had scored "green" in
"Current Status" and "Progress in Implementing the President's
Management Agenda" in Human Capital on the Executive Branch Management
Scorecard. The scorecard tracks how well the departments and major agencies
are executing the five government-wide management initiatives.
In FY 2008, we plan to complete 13 reviews and begin 15 reviews in this area.
Bank Fees Charged to Social Security Beneficiaries
Objective
To determine whether banks are deducting service fees from low income and impoverished
beneficiary's Social Security payments direct deposited into personal bank accounts.
Background
The Act prohibits the seizure of Social Security benefits by execution, levy,
attachment, garnishment or other legal process. However, some banks deduct fees
(that is, automated teller machine transactions, insufficient funds, low account
balances, account maintenance, etc.) and loan payments directly from accounts
holding Social Security benefits without the beneficiary's approval or notice.
The banks assert they can legally take these funds because the manner used to
take them is not explicitly prohibited by the Act.
In Care of Addresses Used by Title II Beneficiaries and Title XVI Recipients
Objective
To perform a nation-wide review to determine the extent of abuse of in-care-of
addresses by individuals, organizations or facilities.
Background
Some facilities, such as nursing homes, are instructing residents (upon admission)
to call SSA's 800-number and change the resident's address to "in care
of" the facility. This circumvents the representative payee process and
allows the facility to avoid the obligations that go with being officially designated
as payee. This is done without regard to the resident's capability of managing
his or her funds. The funds are paid via direct deposit to an account the facility
controls.
In-care-of addresses may also disguise other schemes to assume control of beneficiaries'
funds or make it appear the beneficiaries are living in the United States when
they are not.
Medicare Modernization Act-Part D Low-income Subsidy Income and Resource Verification
Objective
To determine whether SSA Subjected income and resource information provided
by applicants to appropriate methods of verification.
Background
The Medicare Prescription Drug, Improvement and Modernization Act of 2003, also
known as the Medicare Modernization Act, established a new voluntary Part D
Prescription Drug Program. The Medicare Modernization Act requires that SSA
take applications and determine eligibility for a new subsidy program. The purpose
of the subsidy program is to assist some Medicare beneficiaries who have limited
financial means, to pay for prescription drug coverage under the Medicare Part
D program. Individuals who have Medicare and are receiving SSI and/or Medicaid
or who participate in the Medicare Savings Program are deemed eligible for a
subsidy.
SSA makes subsidy eligibility determinations based on a comparison of the income
and resource information provided on the application with income and resource
data. When SSA processes a subsidy application, it compares the application
data with the Agency data. If data inconsistencies are detected, the case will
go through SSA's verification process.
Organizational Payees Reporting Beneficiaries' Deaths
Objective
To determine whether organizational representative payees promptly notify SSA
when beneficiaries in their care die.
Background
While conducting our Follow-up Review of Old-Age, Survivors and Disability Insurance
Benefits Paid to Deceased Auxiliary Beneficiaries, we encountered situations
in which it appeared organizational representative payees did not promptly notify
SSA when beneficiaries in their care died, and, as a result, benefit payments
continued to be issued after death.
We identified 238 deceased beneficiaries whose Social Security benefits were
sent to organizational representative payees and more than 1 benefit payment
was issued after their deaths. Based on our preliminary analysis of 50 cases,
we determined that between 2 and 16 months had elapsed before SSA discovered
the beneficiaries' deaths and stopped the benefit payments. In total, $150,290
was paid to these organizational representative payees after the beneficiaries
died. Of this amount, about $48,464 (32 percent) had not been recovered by SSA
as of January 2007. Most of these organizations continue to serve as representative
payees for other beneficiaries
Representative Payees for the Social Security Administration (4 Reviews)
Objective
To review organizational or individual representative payees in the New York,
Kansas City and San Francisco Regions. To determine whether the representative
payee
has effective safeguards over the receipt and disbursement of Social Security
benefits and
uses and accounts for Social Security benefits in accordance with SSA policies
and procedures.
Background
SSA provides benefits to the most vulnerable members of society-the young, the
elderly, and the disabled. Congress granted SSA the authority to appoint representative
payees for those beneficiaries judged incapable of managing or directing the
management of their benefits.
Representative payees (organizations or individuals) receive and manage payments
on behalf of these beneficiaries. Given the vulnerability of the beneficiaries
and the risk a representative payee may misuse beneficiaries' funds, it is imperative
that SSA have appropriate safeguards to ensure representative payees meet their
responsibilities.
Social Security Administration Employees Serving as Representative Payees
Objectives
To determine whether (1) SSA employees are complying with representative payee
duties and (2) controls are in place to prohibit SSA employees who are acting
as representative payees from accessing beneficiaries' records.
Background
Some individuals cannot manage or direct the management of their benefits because
of their youth or mental and/or physical impairments. Congress granted SSA the
authority to appoint representative payees to receive and manage these beneficiaries'
payments. A representative payee may be an individual or an organization. SSA
selects representative payees for OASDI beneficiaries or SSI recipients when
representative payment would serve the individual's interests.
An SSA employee may be a representative payee for a minor child or incapable
individual without prior approval. However, the employee may not take any formal
or informal action as an SSA employee in connection with the claim, such as
participating in the development or prosecution of the claim. Services by an
SSA employee serving in this capacity are limited to filing for and/or receiving
benefits on an individual's behalf.
The Social Security Administration's 800-number Automation
Objective
To review the effectiveness of the Social Security Administration's 800-number
automated service system.
Background
SSA maintains a national 800-number for individuals to file claims, update records,
and request information about SSA's programs. Since becoming available nationwide
in 1989, SSA's 800-number has become a principal contact point for individuals
seeking Agency services. Although the public has a variety of other options
to obtain information or conduct business with SSA, for example, Internet, field
offices, etc., most customers conduct their business with SSA by telephone.
In FY 2006, SSA reported that 59,475,747 customers accessed the national 800-number
network.
Callers to the 800-number may use a menu of automated services or request to
speak with a representative. To keep pace with the growing demand for SSA's
800-number telephone services, the Agency has expanded the service options to
callers available through its automated system. The automated 800-number network
offers a variety of services, in English or Spanish, 24 hours a day, 7 days
a week.
The Social Security Administration Field Office Training of Staff
Objective
To review SSA field offices' training of claims and service representatives
and determine field office employees' perception of the training provided.
Background
SSA has about 1,270 field offices nationally, where individuals can apply for
OASDI and SSI payments, check on earnings posted to their earnings record, apply
for an SSN, and appeal an unfavorable benefit determination or report changes
affecting their benefits. Field office staff comprises approximately 14,000
claims representatives and 5,000 service representatives who provide front-line
service to the public.
For SSA field offices to continue providing the quality service its customers
expect, training is needed to enable staff to remain current on Agency policies,
procedures, operations, and changes in technology. This review will provide
SSA field office employees' perception of training received.
The Social Security Administration's Medicare Part D Low-income Subsidy Appeals
Process
Objective
To determine whether SSA effectively managed the Medicare Part D low income
subsidy appeals process.
Background
The Medicare Modernization Act requires that SSA take applications and determine
eligibility for a low-income subsidy. The Centers for Medicare and Medicaid
Services automatically approved the full subsidy for 6 million individuals based
on enrollment in other government low-income programs. The Centers for Medicare
and Medicaid Services estimates an additional 6 to 8 million individuals may
be eligible for the subsidy. SSA is responsible for processing subsidy applications
for these individuals.
SSA determines subsidy eligibility through a review of the applicant's income,
resources and ownership of real property. SSA's subsidy eligibility determinations
are subject to appeal/administrative review. Applicants appealing the initial
determination can request telephone hearings or a case review. These hearings
will be conducted by individuals not involved in making the initial determination.
Determinations rendered during this administrative review process can be appealed
to Federal District Court.
Volume Individual Representative Payee for the Social Security Administration
Objective
To determine whether SSA's internal controls are adequate to ensure volume individual
representative payees ensure Social Security benefits are used and accounted
for in accordance with SSA's policies and procedures.
Background
Some individuals cannot manage or direct the management of their finances because
of their youth or mental and/or physical impairments. Congress granted SSA the
authority to appoint representative payees to receive and manage these beneficiaries'
payments. A representative payee may be an individual or an organization. SSA
selects representative payees for OASDI beneficiaries or SSI recipients when
representative payments would serve the individuals' interests. Representative
payees are responsible for managing benefits in the best interest of the beneficiary.
From SSA's Representative Payee System, we identified 74 individual representative
payees nationwide who serve 35 or more beneficiaries (these individuals serve
a total of 4,255 beneficiaries). Furthermore, 6 of these individual payees serve
more than 100 beneficiaries: 3 payees in the Chicago Region, 1 payee in the
San Francisco Region, 1 payee in the Seattle Region, and 1 payee in the Boston
Region.