Administrative Payments

Agency Accountable Official

Retirement, Survivors, and Disability Insurance (RSDI)

Supplemental Security Income (SSI)

High-Dollar Improper Payments

Recovery Efforts – RSDI and SSI

Administrative Payments

What's New

Program Integrity, Payment Accuracy, Service Delivery, Program Access, Accountability

Background

In fiscal year (FY) 2010, we obligated $11,115 million to administer the Retirement and Survivors Insurance, Disability Insurance, and Supplemental Security Income programs. These costs largely consisted of payroll and benefits and included payments to State agencies for Disability Determination Services and other administrative expenses, such as travel and rents.

FY 2010 Administrative Expenses (dollars in millions)
Payroll and Employee Benefits	$6,037
State Disability Determination Services (DDS)	$2,114
ARRA*	$471
Other Administrative Expenses**	$2,964
Total Administrative Expenses	$11,586
Notes: Includes mostly Payroll Expenses *Other Administrative Expenses include, but are not limited to, rents and equipment expenses

Risk Assessment

We conducted a risk assessment on each of the categories in the table above and determined that our administrative payments are not at a significant risk of improper payments. Through combining this risk assessment with our strong internal controls, along with a number of financial audits that indicated no weaknesses in our process, we demonstrate that our administrative payments do not meet the criteria for further reporting to Congress or the Office of Management and Budget.

Recovery Methods

Along with our comprehensive program to recover benefit overpayments, we have an extensive debt collection program to recover administrative overpayments to contractors and former employees resulting from payment errors. In FY 2011, we recovered $2.3 million in administrative debt through an array of internal and external debt collection tools.

Administrative Debt Overpayments – Detections and Recoveries (dollars in millions)
Administrative Debt Overpayments	Amount Identified FY 2011	Amount Recovered FY 2011	Amount Identified FY 2010	Amount Recovered FY 2011	Cumulative Amount Identified FY 11 + 10	Cumulative Amount Recovered FY 11 + 10
Total	$2.5	$2.3	$2.6	$1.4	$5.1	$3.7
Notes: The totals include all detected and recovered overpayments for the given fiscal year. Detected overpayments in a given fiscal year represent identified debt that can span multiple fiscal years. This chart contains identified and recovered administrative overpayments. However, we do not consider every overpayment improper according to the definition contained in IPIA.

Recovery Auditing

Legislation passed in 2002 requires agencies that enter into contracts worth more than $500 million in a FY to complete a cost-effective program for identifying errors made in paying contractors and recovering any improper payments. For FY 2010's audit, we performed a sample review of $7,875 million (out of $8,049 million total) administrative payments. As shown in the chart below, we identified 0.06 percent ($4.407 million) of administrative payments as improper and collected 64 percent ($2.848 million) in FY 2010. This validated the agency's current processes for prevention, detection, and collection of improper payments.

FY 2010 Payment Recapture Audit Reporting Administrative Payments (dollars in millions)
Type of Payment	Payroll and Benefits	Vendor and Travel
Amount Subject ot Review for Current Year (CY) Reporting	$6,375	$1,674
Actual Amount Reviewed and Reported CY	$6,375	$1,500
Amount Identified for Recovery CY	$2.983	$1.424
Amount Recovered CY	$1.465	$1.383
Percent of Amount Recovered out of Amount Identified CY	49.11%	97.14%
Amount Outstanding CY	$1.518	$0.041
Percent of Amount Outstanding out of Amount Identified CY	50.89%	2.86%
Amount Determined Not to be collectable CY	$0.178	$0.0
Percent of Amount Determined Not to be Collectable out of Amount Identified CY	5.97%	0.0%
Amounts Identified for Recovery Prior Years (PY)	N/A	$7.366
Amounts Recovered PYs	N/A	$7.359
Cumulative Amounts Identified for Recovery (CY + PYs)	$2.983	$8.790
Cumulative Amounts Recovered (CY + PYs)	$1.465	$8.742
Cumulative Amounts Outstanding (CY + PYs)	$1.518	$0.048
Cumulative Amounts Determined Not to be Collectable (CY + PYs)	$0.178	$0.0
Notes: The payroll and benefits amounts include overpayments from current and separated employees. The amounts for current employees include overpayments that we identified in FY 2010 but could have occurred in a prior year. The amount subject to review for current year reporting includes $338 million in payroll expenses attributable to the American Recovery and Reinvestment Act. For Payroll and Benefits we did not include “amounts identified for recovery in prior years” and “amounts recovered in prior years” since this is the first year we are reporting such overpayments. Therefore, all totals requiring current year plus prior year data contain current year data only.

We achieve these results by maintaining our commitment to not only identify and recover improper payments, but to avoid them as well. A memorandum from President Obama (Presidential Memorandum Regarding Finding and Recapturing Improper Payments, issued on March 10, 2010) speaks to these efforts, challenging agencies to continue working along the path toward developing stronger practices. Furthermore, on July 22, 2010, President Obama strengthened this challenge by signing the Improper Payments Elimination and Recovery Act (IPERA) into law, which:

Amends the Improper Payments Information Act of 2002 (IPIA);
Requires agency heads to conduct recovery audits for agency programs that expend $1 million or more annually, if such audits would be cost-effective;
Reinforces many of the initiatives we are currently implementing to address improper payments; and
Further increases our transparency, accountability, and reporting for improper payments from the existing requirements of the IPIA and Executive Order 13520.

We support this legislation and will report on the IPERA legislative requirements in the FY 2011 Performance and Accountability Report.