Supplemental Security Income
Progress Made in Detecting and Recovering Overpayments, but Management Attention Should Continue Gao ID: GAO-02-849 September 16, 2002The Supplemental Security Income (SSI) program is the nation's largest cash assistance program for the poor. The program paid $33 billion in benefits to 6.8 million aged, blind, and disabled persons in fiscal year 2001. Benefit eligibility and payment amounts for the SSI population are determined by complex and often difficult to verify financial factors such as an individual's income, resource levels, and living arrangements. Thus, the SSI program tends to be difficult, labor intensive, and time consuming to administer. These factors make the SSI program vulnerable to overpayments. The Social Security Administration (SSA) has demonstrated a stronger commitment to SSI program integrity and taken many actions to better deter and detect overpayments. Specifically, SSA has (1) obtained legislative authority in 1999 to use additional tools to verify recipients' financial eligibility for benefits, including strengthening its ability to access individuals' bank account information; (2) developed additional measures to hold staff accountable for completing assigned SSI workloads and resolving overpayment issues; (3) provided field staff with direct access to state databases to facilitate more timely verification of recipient's wages and unemployment information; and (4) significantly increased, since 1998, the number of eligibility reviews conducted each year to verify recipient's income, resources, and continuing eligibility for benefits. In addition to better detection and deterrence of SSI overpayments, SSA has made recovery of overpaid benefits a high priority. Despite these efforts, further improvements in overpayment recovery are possible.
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United States General Accounting Office:
GAO:
Report to the Commissioner of Social Security:
September 2002:
Supplemental Security Income:
Progress Made in Detecting and Recovering Overpayments, but Management
Attention Should Continue:
GAO-02-849:
Contents:
Letter:
Results in Brief:
Background:
Overpayment Deterrence and Detection Are Receiving Additional Emphasis
but Some Weaknesses Remain:
Overpayment Recovery Improved, but Other Actions Could Enhance Program
Management:
Conclusions:
Recommendations:
Agency Comments and Our Evaluation:
Appendix I: Comments from the Social Security Administration:
Related GAO Products:
Figures:
Figure 1: Percentage Change in Overpayment Waivers, SSI Benefit
Payments, and SSI Beneficiaries Since 1993:
Figure 2: Ratio of Overpayments Waived to Overpayments Collected,
Fiscal Years 1989 through 2001:
Abbreviations:
CDI: Cooperative Disability Investigation:
DDS: Disability Determination Services:
ISM: in-kind support and maintenance:
NDNH: National Directory of New Hires:
OIG: Office of Inspector General:
SSA: Social Security Administration:
SSI: Supplemental Security Income:
SSN: social security number:
[End of section]
United States General Accounting Office:
Washington, DC 20548:
September 16, 2002:
The Honorable Jo Anne B. Barnhart:
Commissioner of Social Security:
Dear Ms. Barnhart:
The Supplemental Security Income (SSI) program is the nation‘s largest
cash assistance program for the poor. The program paid about $33 billion
in benefits to 6.8 million aged, blind, and disabled persons in fiscal
year 2001. Benefit eligibility and payment amounts for the SSI
population are determined by complex and often difficult to verify
financial factors such as an individual‘s income, resource levels, and
living arrangements. Individual financial circumstances may also often
change, requiring staff to frequently assess recipients‘ eligibility
for benefits. Thus, the SSI program tends to be difficult, labor
intensive, and time-consuming to administer. These factors also make
the SSI program vulnerable to overpayments. In 2001, outstanding SSI
debt and newly detected overpayments for the year totaled $4.7 billion.
We designated SSI a high-risk program in 1997 after several years of
reporting on specific instances of abuse and mismanagement, including
poor overpayment detection and recovery practices. The following year,
we issued a report with several recommendations for improving SSI
program operations. [Footnote 1]
This report discusses the actions that the Social Security
Administration (SSA) has taken over the past several years to better
(1) deter and detect SSI overpayments and (2) recover SSI overpayments
after they occur. To examine these issues, we reviewed SSI performance
data, our prior reports, and various internal and external studies of
the SSI program. We also analyzed SSI penalty and overpayment waiver
data, as well as trends in overpayments detected and recovered. We
conducted more than 175 interviews with management and line staff from
SSA‘s headquarters in Baltimore; its Philadelphia, San Francisco, and
Atlanta regions; and from state Disability Determination Services
(DDS). During our meetings, we documented management and staff views on
the priority SSA places on improving program integrity and verified
policy and procedural changes that have been made in SSI operations. We
also discussed the effectiveness of new overpayment deterrence,
detection and recovery tools, as well as remaining program
vulnerabilities. We conducted our work from June 2001 through July 2002
in accordance with generally accepted government auditing standards.
Results in Brief:
SSA has demonstrated a stronger commitment to SSI program integrity
and taken many actions to better deter and detect overpayments. For
example, SSA:
* obtained legislative authority in 1999 to use additional tools to
verify recipients‘ financial eligibility for benefits, including
strengthening its ability to access individuals‘ bank account
information;
* developed additional measures to hold staff accountable for completing
assigned SSI workloads and resolving overpayment issues;
* provided field staff with direct access to state databases to
facilitate more timely verification of recipients‘ wages and employment
information; and;
* significantly increased, since 1998, the number of eligibility reviews
conducted each year to verify recipients‘ income, resources, and
continuing eligibility for benefits.
Because a number of SSA‘ s initiatives are still in the planning or
early implementation stages, it is too soon to tell what impact they may
ultimately have on improving the accuracy of SSI eligibility decisions
and reducing overpayments. Moreover, there continue to be
vulnerabilities that SSA has yet to address. These include excessively
complex program rules and limited use of monetary and administrative
penalties for persons who fail to report information affecting their
benefits and knowingly provide misleading statements.
In addition to better detection and deterrence of SSI overpayments, SSA
has made recovery of overpaid benefits a higher priority. For example,
in 1998 SSA began seizing the tax refunds of former SSI recipients with
outstanding debt. Recently, SSA also began more aggressive actions to
recover overpayments from former SSI recipients by reducing any social
security retirement or disability benefits they receive. Despite these
efforts, further improvements in overpayment recovery are possible. For
example, legislation passed in 1999 includes provisions authorizing SSA
to levy interest and use collection agencies to pursue SSI debt. These
tools have yet to be implemented. There has also been dramatic growth
in the amount of overpayments waived. Annual overpayments waived have
increased 400 percent since 1993 and currently amount to nearly
one-fourth of SSA‘s total overpayment collections. At a time when SSA
has enhanced its debt recovery capabilities, its waiver policies and
practices may be preventing the recovery of millions of dollars in
overpayments.
Sustained management attention should continue to ensure progress
towards fully implementing crucial overpayment deterrence, detection,
and recovery tools. This report includes recommendations that SSA
address complex SSI program rules to better prevent payment errors,
reassess its current polices and procedures for imposing administrative
penalties and sanctions, and ensure that overpayment waiver policies are
designed and implemented in a way that maintains program integrity. In
its response to our report, SSA agreed with our recommendations and said
the report would be helpful in its efforts to better manage the SSI
program. SSA also provided a number of technical comments that we have
incorporated into our draft report as appropriate.
Background:
SSI provides financial assistance to people who are age 65 or older,
blind or disabled, and who have limited income and resources. The
program provides individuals with monthly cash payments to meet basic
needs for food, clothing, and shelter. Last year, about 6.8 million
recipients were paid about $33 billion in SSI benefits. During the
application process, SSA relies on state Disability Determination
Services to make the initial medical determination of eligibility while
SSA field offices are responsible for determining whether applicants
meet the program‘s nonmedical (age and financial) eligibility
requirements. To receive SSI benefits in 2002, individuals may not have
income greater than $545 per month ($817 for a couple) or have resources
worth more than $2,000 ($3,000 for a couple). When applying for SSI,
individuals are required to report any information that may affect their
eligibility for benefits. Similarly, once individuals receive SSI
benefits, they are required to report events, such as changes in
income, resources, marital status, or living arrangements to SSA field
office staff in a timely manner. A recipient‘s living arrangement can
also affect monthly benefits. Generally, individuals who rent, own
their home, or pay their share of household expenses if they live with
other persons receive a higher monthly benefit than those who live in
the household of another person and receive food and shelter
assistance.
To a significant extent, SSA depends on program applicants and
recipients to accurately report important eligibility information.
However, to verify this information SSA uses computer matches to
compare SSI records against recipient information contained in records
of third parties, such as other federal and state government agencies.
To determine whether recipients remain financially eligible for SSI
benefits after the initial assessment, SSA also periodically conducts
redetermination reviews to verify eligibility factors such as income,
resources, and living arrangements. Recipients are reviewed at least
every 6 years, but reviews may be more frequent if SSA determines that
changes in eligibility are likely.
Since its inception, the SSI program has been difficult and costly to
administer because even small changes in monthly income, available
resources, or living arrangements can affect benefit amounts and
eligibility. Complicated policies and procedures determine how to treat
various types of income, resources, and in-kind support and maintenance
that a recipient receives. SSA must constantly monitor these situations
to ensure benefit amounts are paid accurately. On the basis of our work,
which spans more than a decade, we designated SSI a high-risk program in
1997 and initiated work to document the underlying causes of
longstanding SSI program problems and the impact these problems have
had on program performance and integrity. [Footnote 2] In 1998, we
reported on a variety of management problems related to the deterrence,
detection, and recovery of SSI overpayments. Over the last several
years, we also testified about SSA‘s progress in addressing these
issues (see app. I).
Overpayment Deterrence and Detection Are Receiving Additional Emphasis
but Some Weaknesses Remain:
Since 1998, SSA has demonstrated a stronger management commitment to
SSI program integrity issues. SSA has also expanded the use of
independent data to verify eligibility factors and enhanced its ability
to detect payment errors. Today, SSA has far better capability to more
accurately verify program eligibility and detect payment errors than it
did several years ago. However, weaknesses remain in its debt
prevention and deterrence processes. SSA has made limited progress
toward simplifying complex program rules that contribute to payment
errors and is not fully utilizing several overpayment prevention tools,
such as penalties and the suspension of benefits for recipients who
fail to report eligibility information as required.
Management Has Heightened Attention to SSI Program Integrity:
Since our 1998 report, SSA has taken a variety of actions that
demonstrate a fundamental change in its management approach and a much
stronger commitment to improved program integrity. First, SSA issued a
report in 1998 that outlined its strategy for strengthening its SSI
stewardship role. [Footnote 3] This report highlighted specific planned
initiatives to improve program integrity and included timeframes for
implementation. In addition to developing a written SSI program
integrity strategy, SSA submitted proposals to Congress requesting new
authorities and tools to implement its strategy. In December 1999,
Congress provided SSA with several newly requested tools in the Foster
Care Independence Act of 1999. The act gave SSA new authorities to
deter fraudulent or abusive actions, better detect changes in recipient
income and financial resources, and improve its ability to recover
overpayments. Of particular note is a provision in the act that
strengthened SSA‘s authority to obtain applicant resource information
from banks and other financial institutions. SSA‘s data show that
unreported financial resources, such as bank accounts, are the second
largest source of SSI overpayments. SSA also sought and received
separate legislative authority to penalize persons who misrepresent
material facts essential to determining benefit eligibility and payment
amounts. SSA can now impose a period of benefit ineligibility ranging
from 6 to 24 months for individuals who knowingly misrepresent facts.
SSA also made improved program integrity one of its five agency
strategic goals and established specific objectives and performance
indicators to track its progress towards meeting this goal. For
example, the agency began requiring its field offices to complete 99
percent of their assigned redetermination reviews and other cases where
computer matching identified a potential overpayment situation due to
unreported wages, changes in living arrangements, or other factors.
During our review, most field staff and managers that we interviewed
told us that SSA‘s efforts to establish more aggressive goals and
monitor performance toward completing these reviews was a clear
indication of the new enhanced priority it now places on ensuring
timely investigation of potential SSI overpayments.
To further increase staff attention to program integrity issues, SSA
also revised its work measurement system”used for estimating resource
needs, gauging productivity, and justifying staffing levels”to include
staff time spent developing information for referrals to its Office of
Inspector General (OIG). In prior work, we reported that SSA‘s own
studies showed that its employees felt pressured to spend most of their
time on ’countable“ workloads, such as quickly processing and paying
claims rather than on developing fraud referrals for which they
received no credit. Consistent with this new emphasis, the OIG also
increased the level of resources and staff devoted to investigating SSI
fraud and abuse; key among the OIG‘s efforts is the formation of
Cooperative Disability Investigation (CDI) teams in 13 field locations.
These teams consist of OIG investigators, SSA staff, state or local law
enforcement officers, and state DDS staff who investigate suspicious
medical claims through surveillance and other techniques. A key focus
of the CDI initiative is detecting fraud and abuse earlier in the
disability determination process to prevent overpayments from
occurring. The OIG reported that the teams saved almost $53 million in
fiscal year 2001 in improper benefit payments by providing information
that led to a denial of a claim or the cessation of benefits.
Finally, in a June 2002 corrective action plan, SSA reaffirmed its
commitment to taking actions to facilitate the removal of the SSI
program from our high-risk list. This document described SSA‘s progress
in addressing many of the program integrity vulnerabilities we
identified and detailed management‘s SSI program priorities through
2005. [Footnote 4] To ensure effective implementation of this plan, SSA
has assigned senior managers responsibility for overseeing key
initiatives, such as piloting new quality assurance systems. The report
also highlighted several other program integrity initiatives under
consideration by SSA, including plans to test whether touchtone
telephone technology can improve the reporting of wages, credit bureau
data can be used to detect underreported income, and public databases
can help staff identify unreported resources, for example, automobiles
and real property. To assist field staff in verifying the identity of
recipients, SSA is also exploring the feasibility of requiring new SSI
claimants to be photographed as a condition of receiving benefits.
SSA Has Improved Its Ability to Detect Payment Errors:
In prior work, we noted that SSA‘s processes and procedures for
verifying recipients‘ income, resources, and living arrangements were
often untimely and incomplete. In response to our recommendations, SSA
has taken numerous actions to verify recipient reported information and
better detect and prevent SSI payment errors.
SSA has made several automation improvements to help field managers
and staff better control overpayments. For example, last year, the
agency distributed software nationwide that automatically scans
multiple internal and external databases containing recipient financial
and employment information and identifies potential changes in income
and resources. The system then generates a consolidated report for use
by staff when interviewing recipients. SSA also made systems
enhancements to better identify newly entitled recipients with
uncollected overpayments from a prior coverage period. Previously, each
time an individual came on and off the rolls over a period of years,
staff had to search prior SSA records and make system inputs to bring
forward any outstanding overpayments to current records. The process of
detecting overpayments from a prior eligibility period and updating
recipient records now occurs automatically. SSA‘s data show that, since
this tool was implemented in 1999, the monthly amount of outstanding
overpayments transferred to current records increased on average by
nearly 200 percent, from $12.9 million a month to more than $36 million
per month. Thus, a substantial amount of outstanding overpayments that
SSA might not have detected under prior processes is now subject to
collection action. Nearly all SSA staff and managers that we
interviewed told us that systems enhancements have improved SSA‘s
ability to control overpayments.
In commenting on this report, SSA said that it will soon implement
another systems enhancement to improve its overpayment processes. SSA
will automatically net any overpayments against underpayments that
exist on a recipient‘s record before taking any recovery or
reimbursement actions. Presently, netting requires SSA employees to
record a series of transactions and many opportunities to recover
overpayments by netting them against existing underpayments are lost.
SSA estimates that automating the netting process will reduce
overpayments by up to $60 million each year, with a corresponding
reduction in underpayments paid to beneficiaries.
In addition to systems and software upgrades, SSA now uses more timely
and comprehensive data to identify information that can affect SSI
eligibility and benefit amounts. For example, in accordance with our
prior recommendation, [Footnote 5] SSA obtained access to the Office of
Child Support Enforcement‘s National Directory of New Hires (NDNH),
which is a comprehensive source of unemployment insurance, wage, and
new hires data for the nation. In January 2001, SSA began providing
field offices with direct access to NDNH and required its use to verify
applicant eligibility during the initial claims process. With NDNH, SSA
field staff now have access to more comprehensive and timely employment
and wage information essential to verifying factors affecting SSI
eligibility. More timely employment and wage information is
particularly important, considering that SSA studies show that
unreported compensation accounts for about 25 percent of annual SSI
overpayments. SSA has estimated that use of NDNH will result in about
$200 million in overpayment preventions and recoveries per year.
Beyond obtaining more effective eligibility verification tools such as
NDNH, SSA has also enhanced existing computer data matches to verify
financial eligibility. For example, SSA increased the frequency (from
annually to semiannually) in which it matches SSI recipient social
security numbers (SSN) against its master earnings record, which
contains information on the earnings of all social security-covered
workers. In 2001, SSA flagged over 206,000 cases for investigation of
unreported earnings, a threefold increase over 1997 levels.
To better detect individuals receiving unemployment insurance benefits,
quarterly matches against state unemployment insurance databases have
replaced annual matches. Accordingly, the number of unemployment
insurance detections has increased from 10,400 in 1997 to over 19,000
last year. SSA‘s ability to detect nursing home admissions, which can
affect SSI eligibility, [Footnote 6] has also improved. In 1997, we
reported that SSA‘s database for identifying SSI recipients residing in
nursing homes was incomplete and its verification processes were
untimely, resulting in substantial overpayments. At the time, this
database included only 28 states and data matches were conducted
annually. SSA now conducts monthly matches with all states, and the
number of overpayment detections related to nursing home admissions has
increased substantially from 2,700 in 1997 to 75,000 in 2001. SSA‘s
ability to detect recipients residing in prisons has also improved.
Over the past several years, SSA has established agreements with
prisons that house 99 percent of the inmate population, and last year
SSA reported suspending benefits to about 54,000 prisoners. Recipients
are ineligible for benefits in any given month if throughout that month
they are in prison. SSA has also increased the frequency in which it
matches recipient SSNs against tax records and other data essential to
identify any unreported interest, income, dividends, and pension income
individuals may be receiving. These matching efforts have also resulted
in thousands of additional overpayment detections over the last few
years.
To obtain more current information on the income and resources of SSI
recipients, SSA has also increased its use of online access to various
state data. Field staff can directly query various state records to
quickly identify workers‘ compensation, unemployment insurance, or
other state benefits individuals may be receiving. In 1998, SSA had
online access to records in 43 agencies in 26 states. As of January
2002, SSA had expanded this access to 73 agencies in 42 states. As a
tool for verifying SSI eligibility, direct online connections are
potentially more effective than using periodic computer matches,
because the information is more timely. Thus, SSA staff can quickly
identify potential disqualifying income or resources at the time of
application and before overpayments occur. In many instances, this
allows the agency to avoid having to go through the often difficult and
unsuccessful task of having to recover overpaid SSI benefits. During our
field visits, staff and managers who had online access to state
databases believed this tool was essential to more timely verification
of recipient-reported information. SSA‘s efforts to expand direct
access to additional states‘ data are ongoing.
Finally, to further strengthen program integrity, SSA took steps to
improve its SSI financial redetermination review process to verify that
individuals remain eligible for benefits. First, SSA increased the
number of annual reviews from 1.8 million in fiscal year 1997 to 2.4
million in 2001. Second, SSA substantially increased the number of
redeterminations conducted through personal contact with recipients,
from 237,000 in 1997 to almost 700,000 this year. SSA personally
contacts those recipients that it believes are most likely to have
payment errors. Third, because budget constraints limit the number of
redeterminations SSA conducts, it refined its profiling methodology in
1998 to better target recipients that are most likely to have payment
errors. Refinements in the selection methodology have allowed SSA to
leverage its resources. SSA‘s data show that, in 1998, refining the
case selection methodology increased estimated overpayment benefits”
amounts detected and future amounts prevented”by $99 million over the
prior year. SSA officials have estimated that conducting substantially
more redeterminations would yield hundreds of millions of dollars in
additional overpayment benefits annually. However, officials from its
Office of Quality Assurance and Performance Assessment indicated that
limited resources would affect SSA‘s ability to do more reviews and
still meet other agency priorities. In June 2002, SSA informed us that
the Commissioner recently decided to make an additional $21 million
available to increase the number of redeterminiations this year.
Despite its increased emphasis on overpayment detection and deterrence,
SSA is not meeting its payment accuracy goals and it is too early to
determine what impact its actions will ultimately have on its ability to
make more accurate benefit payments. In 1998, SSA pledged to increase
its SSI overpayment accuracy rate from 93.5 percent to 96 percent by
fiscal year 2002. Since that time, however, SSA has revised this goal
downward twice and for fiscal year 2001 it was 94.7 percent. Current
agency plans do not anticipate achieving the 96-percent accuracy rate
until 2005.
Various factors may account for SSA‘s inability to achieve its SSI
accuracy goals, including lag times between the occurrence of an event
affecting eligibility and SSA‘s receipt of the information. In
addition, key initiatives that might improve SSI overpayment accuracy
have only recently begun or are in the early planning stages. For
example, it was not until January 2001 that SSA began providing field
offices with access to the NDNH database to verify applicants‘
employment status and wages. SSA also only recently required staff to
use NDNH when conducting post entitlement reviews of individuals‘
continued eligibility for benefits. In fiscal year 2000, SSA estimated
that overpayments attributable to wages”historically the number one
source of SSI overpayments”were about $477 million or 22 percent of its
payment errors. Thus, with full implementation, the impact of NDNH on
overpayment accuracy rates may ultimately be reflected in future years.
Furthermore, the Foster Care Independence Act of 1999 strengthened
SSA‘s authority to obtain applicant resource information from financial
institutions. SSA‘s data show that unreported financial resources, such
as bank accounts, are the second largest source of SSI overpayments.
Last year, overpayments attributable to this category totaled about
$394 million, or 18 percent of all detections. In May 2002, SSA issued
proposed regulations on its new processes for accessing recipient
financial data and plans to implement a pilot program later this year.
When fully implemented, this tool may also help improve the SSI payment
accuracy rate.
Limited Progress Made in Simplifying Complex Program Rules:
SSA has made only limited progress toward addressing excessively
complex rules for assessing recipients‘ living arrangements, which have
been a significant and longstanding source of payment errors. SSA staff
must apply a complex set of policies to document an individual‘s living
arrangements and the value of in-kind support and maintenance (ISM)
being received, [Footnote 7] which are essential to determining benefit
amounts. Details such as usable cooking and food storage facilities
with separate temperature controls, availability of bathing services,
and whether a shelter is publicly operated can affect benefits. These
policies depend heavily on recipients to accurately report whether they
live alone or with others; the relationships involved; the extent to
which rent, food, utilities, and other household expenses are shared;
and exactly what portion of those expenses an individual pays. Over the
life of the program, those policies have become increasingly complex as
a result of new legislation, court decisions, and SSA‘s own efforts to
achieve benefit equity for all recipients. The complexity of SSI
program rules pertaining to living arrangements, ISM, and other areas
of benefit determination is reflected in the program‘s administrative
costs. In fiscal year 2001, SSI benefit payments represented about 6
percent of benefits paid under all SSA-administered programs, [Footnote
8] but the SSI program accounted for 31 percent of the agency‘s
administrative resources.
Although SSA has examined various options for simplifying rules
concerning living arrangements and ISM over the last several years, it
has yet to take action to implement a cost-effective strategy for
change. In December 2000, SSA issued a report examining six potential
simplification options for living arrangements and ISM relative to
program costs and three program objectives: benefit adequacy (ensuring
a minimum level of income to meet basic needs); benefit equity
(ensuring that recipients with like income, resources, and living
arrangements are treated the same); and program integrity (ensuring
that benefits are paid accurately, efficiently, and with no tolerance
for fraud). [Footnote 9] SSA‘s report noted that overpayments
attributable to living arrangements and ISM in 1999 accounted for a
projected $210 million, or 11 percent, of total overpayment dollars. The
report also acknowledged that most overpayments were the result of
beneficiaries not reporting changes in living arrangements and SSA
staff‘s failure to comply with complicated instructions for verifying
information. SSA concluded that none of the options analyzed supported
all of its SSI program goals. As a result, SSA recommended further
assessing the tradeoffs among program goals presented by these
simplification options.
SSA‘s study shows that at least two of the options would produce net
program savings. For example, one option eliminated the need to
determine whether an individual is living in another person‘s household
by counting ISM at the lesser of its actual value or one-third of the
federal benefit rate. In addition to ultimately reducing program costs,
SSA noted that this option would eliminate several inequities in
current ISM rules and increase benefits for almost 1 percent of
recipients. Although SSA cited some disadvantages (such as, additional
development/calculations in some cases and decreasing benefits for
about 2 percent of recipients), its analysis did not indicate that the
disadvantages outweighed potential positive effects. Furthermore, for
two other options in which SSA projected a large increase in program
costs, it acknowledged that its estimates were based on limited data
and were ’very rough.“ Thus, actual program costs associated with these
options could be significantly lower or higher. Finally, to the extent
that SSA identified limitations in some options analyzed, such as
reductions in benefits for some recipients, it did not propose any
modifications or alternatives to address them.
SSA‘s actions to date do not sufficiently address concerns about complex
living arrangement and ISM policies. During our recent fieldwork, staff
and managers continued to cite program complexity as a problem leading
to payment errors, program abuse, and excessive administrative burdens.
In addition, overpayments associated with living arrangements and ISM
remain among the leading causes of overpayments behind unreported
wages and resources, respectively. Finally, SSA‘s fiscal year 2000
payment accuracy report noted that it would be difficult to achieve SSI
accuracy goals without some policy simplification initiatives. In its
recently issued ’SSI Corrective Action Plan,“ SSA stated that within
the next several years it plans to conduct analyses of alternative
program simplification options beyond those already assessed.
Administrative Penalties and Sanctions Remain Underutilized:
Our work shows that administrative penalties and sanctions may be
underutilized in the SSI program. Under the law, SSA may impose
administrative penalties on recipients who do not file timely reports
about factors or events that can affect their benefits”changes in wages,
resources, living arrangements, and other support being received. An
administrative penalty causes a reduction in 1 month‘s benefits. Penalty
amounts are $25 for a first occurrence, $50 for a second occurrence, and
$100 for the third and subsequent occurrences. The penalties are meant
to encourage recipients to file accurate and timely reports of
information so that SSA can adjust its records to correctly pay
benefits. The Foster Care Independence Act also gave SSA authority to
impose benefit sanctions on persons who misrepresent material facts
that they know, or should have known, were false or misleading. In such
circumstances, SSA may suspend benefits for 6 months for the initial
violation, 12 months for the second violation, and 24 months for
subsequent violations. SSA issued interim regulations to implement
these sanction provisions in July 2000 and its November 2000 report
cited its implementation as a priority effort to improve SSI program
integrity.
In our 1998 report, we noted that penalties were rarely used and
recommended that SSA reassess its policies for imposing penalties on
recipients who fail to report changes that can affect their
eligibility. To date, SSA has not addressed our recommendation and
staff rarely use penalties to encourage recipient compliance with
reporting policies. Over the last several years, SSA data indicate that
about 1 million recipients are overpaid annually and that recipient
nonreporting of key information accounted for 71 to 76 percent of
payment errors. On the basis of SSA records, we estimate that at most
about 3,500 recipients were penalized for reporting failures in fiscal
year 2001. SSA staff we interviewed cited the same obstacles or
impediments to imposing penalties as noted in our 1998 report, such as:
(1) penalty amounts are too low to be effective, (2) imposition of
penalties is too administratively burdensome, and (3) SSA management
does not encourage the use of penalties. SSA has not acted to either
evaluate or address these obstacles. Although SSA has issued program
guidance to field office staff emphasizing the importance of assessing
penalties, this action alone does not sufficiently address the
obstacles cited by staff.
SSA‘s administrative sanction authority also remains rarely used. SSA
sanctions data indicate that between June 2000 and February 2002, SSA
field office staff had referred about 3,000 SSI cases to the OIG
because of concerns about fraudulent activity. In most instances, OIG
returned the referred cases to the field office because they did not
meet prosecutorial requirements, such as high amounts of benefits
erroneously paid. At this point, the field office, in consultation with
a regional office sanctions coordinator, can determine whether benefit
sanctions are warranted. Cases referred because of concerns about
fraudulent behavior would seem to be strong candidates for benefit
sanctions. However, as of January 2002, field staff had actually
imposed sanctions in only 21 SSI cases. Our interviews with field staff
identified insufficient awareness of the new sanction authority and
some confusion about when to impose sanctions. In one region, for
example, staff and managers told us that they often referred cases to
the OIG when fraud was suspected, but it had not occurred to them that
these cases should be considered for benefit sanctions if the OIG did
not pursue investigation and prosecution. Enhanced communication and
education by SSA regarding the appropriate application of this
overpayment deterrent tool may ultimately enhance SSA‘s program
integrity efforts.
Overpayment Recovery Improved, but Other Actions Could Enhance Program
Management:
Over the past several years, SSA has been working to implement new
legislative provisions to improve its ability to recover more SSI
overpayments. While a number of SSA‘s initiatives have yielded results
in terms of increased collections, several actions are still in the
early planning or implementation stages and it is too soon to gauge
what effect they will have on SSI overpayment collections. In addition,
we are concerned that SSA‘s current overpayment waiver policies and
practices may be preventing the collection of millions of dollars in
outstanding debt.
Overpayment Recovery Is Receiving Enhanced Emphasis, but Some Key
Initiatives Are Pending:
In our prior work, we reported that SSA has historically placed
insufficient emphasis on recovering SSI overpayments, especially for
those who have left the rolls. We were particularly concerned that SSA
had not adequately pursued authority to use more aggressive debt
collection tools already available to other means-tested benefit
programs, such as the Food Stamp Program. Accordingly, SSA has taken
action over the last several years to strengthen its overpayment
recovery processes.
SSA began using tax refund offsets in 1998 to recover outstanding SSI
debt. At the end of calendar year 2001, this initiative has yielded
$221 million in additional overpayment recoveries for the agency. In the
same year, Congress authorized a cross program recovery initiative,
whereby SSA was provided authority to recover overpayments by reducing
the Title II benefits of former SSI recipients without first obtaining
their consent. [Footnote 10] SSA implemented this cross program
recovery tool in March 2002. Currently, about 36 percent of SSI
recipients also receive Title II benefits, and SSA expects that this
initiative will produce about $115 million in additional overpayment
collections over the next several years. In 2002, the agency also
implemented Foster Care Independence Act provisions allowing SSA to
report former recipients with outstanding SSI debt to credit bureaus as
well as to the Department of the Treasury. Credit bureau referrals are
intended to encourage individuals to voluntarily begin repaying their
outstanding debts. The referrals to Treasury will provide SSA with an
opportunity to seize other federal benefit payments individuals may be
receiving.
While overpayment recovery practices have been strengthened, SSA has
not yet implemented some key recovery initiatives that have been
available to the agency for several years. Although regulations have
been drafted, SSA has not yet implemented administrative wage
garnishment, which was authorized in the Debt Collection Improvement
Act of 1996. In addition, SSA has not implemented several provisions in
the Foster Care Independence Act of 1999. These provisions allow SSA to
offset the federal salaries of former recipients, use collection
agencies to recover overpayments, and levy interest on outstanding
overpayments. In its comments, SSA said that it made a conscious
decision to implement first those tools that it judged as most cost
effective. It prioritized working on debt collection tools that provide
direct collections or that could be integrated into its debt management
system. According to SSA, the remaining tools are being actively
pursued as resources permit. Draft regulations for several of these
initiatives are being reviewed internally. However, agency officials
said that they could not estimate when these additional recovery tools
will be fully operational.
SSI Overpayment Waivers Have Greatly Increased:
Our work shows that SSI overpayment waivers have increased
significantly over the last decade and that current waiver policies and
practices may cause SSA to unnecessarily forgo millions of dollars in
additional overpayment recoveries annually.
Waivers are requests by current and former SSI recipients for relief
from the obligation to repay SSI benefits to which they were not
entitled. Under the law, SSA field staff may waive an SSI overpayment
when the recipient is without fault and the collection of the
overpayment either defeats the purpose of the program, is against
equity and good conscience, or impedes effective and efficient
administration of the program.
To be deemed without fault, and thus eligible for a waiver, recipients
are expected to exercise good faith in reporting information to prevent
overpayments. Incorrect statements that recipients know or should have
known to be false or failure to furnish material information can result
in a waiver denial. If SSA determines a person is without fault in
causing the overpayment, it then must determine if one of the other
three requirements also exists to grant a waiver. Specifically, SSA
staff must determine whether denying a waiver request and recovering the
overpayment would defeat the purpose of the program because the
affected individual needs all of his/her current income to meet ordinary
and necessary living expenses. To determine whether a waiver denial
would be against equity and good conscience, SSA staff must decide if an
individual incurred additional expenses in relying on the benefit, and
thus requiring repayment would affect his/her economic condition. This
could apply to recipients who use their SSI benefits to pay for a
child‘s medical expenses and are subsequently informed of an
overpayment. Finally, SSA may grant a waiver when recovery of an
overpayment may impede the effective or efficient administration of the
program”for example, when the overpayment amount is equal to or less
than the average administrative cost of recovering an overpayment,
which SSA currently estimates to be $500. Thus, field staff we
interviewed generally waived overpayments of $500 or less.
The current $500 threshold was established in December 1993. Prior to
that time the threshold was $100. Officials told us that this change was
based on an internal study of administrative costs related to
investigating and processing waiver requests for SSA‘s Title II
disability and retirement programs. However, the officials acknowledged
that the study did not directly examine the costs of granting SSI
waivers. Furthermore, they were unable to locate the study for our
review and evaluation. During our field visits, staff and managers had
varied opinions regarding the time and administrative costs associated
with denying waiver requests. However, staff often acknowledged that
numerous automation upgrades over the past several years may be cause
for re-examining the current costs and benefits associated with the
$500 waiver threshold.
Our analysis of several years of SSI waiver data shows that since the
waiver threshold was adjusted, waived SSI overpayments have increased
by 400 percent from $32 million in fiscal year 1993 to $161 million in
fiscal year 2001. This increase has significantly outpaced the growth
in both the number of SSI recipients served and total annual benefits
paid, which increased by 12 percent and 35 percent, respectively,
during the same period (see fig. 1).
Figure 1: Percentage Change in Overpayment Waivers, SSI Benefit
Payments, and SSI Beneficiaries Since 1993:
[See PDF for image]
This figure is a vertical bar graph. The vertical axis of the graph
represents percentage change since 1993 from 0 to 500. The horizontal
axis of the graph represents fiscal years from 1994 to 2001. For each
fiscal year, bars depict the following: change in the amount of
overpayments waived; change in amount of benefits paid; and change in
number of beneficiaries.
Note: Each year‘s percentage change is calculated relative to 1993 when
SSA‘s tolerance increased from $100 to $500.
Source: GAO‘s analysis of SSA‘s accounting records.
[End of figure]
Furthermore, the ratio of waived overpayments to total SSI collections
has also increased (see fig. 2). In fiscal 1993, SSA waived about $32
million in SSI overpayments or about 13 percent of its total
collections. By 1995, waiver amounts more than doubled to $66 million,
or about 20 percent, of collections for that year. By fiscal year 2001,
SSI waivers totaled $161 million and represented nearly 23 percent of
all SSI collections. Thus, through its waiver process, SSA is forgoing
collection action on a significantly larger portion of overpaid
benefits.
Figure 2: Ratio of Overpayments Waived to Overpayments Collected,
Fiscal Years 1989 through 2001:
[See PDF for image]
This figure is a line graph. The vertical axis of the graph represents
ratio of waivers to collections from 0 to 35. The horizontal axis of
the graph represents fiscal years from 1989 to 2001.
Source: GAO‘s analysis of SSA‘s accounting records.
[End of figure]
While not conclusive, the data indicate that liberalization of the SSI
waiver policy may be a factor in the dramatic increase in the amount of
overpayments waived. SSA has not studied the impact of the increased
threshold. However, officials believe that the trend in waived SSI
overpayments is more likely due to increases in the number of annual
reviews of recipients‘ medical eligibility. These reviews have resulted
in an increase in benefit terminations and subsequent recipient
appeals. During the appeals process, recipients have the right to
request that their benefits be continued. Those who lose their appeal
can then request a waiver of any overpayments that accrued during the
appeal period. SSA will usually grant these requests under its current
waiver policies.
Another factor affecting trends in waivers may be staff application of
waiver policies and procedures. Although, SSA has developed guidance to
assist field staff when deciding whether to deny or grant waivers, we
found that field staff have considerable leeway to grant waivers based
on an individual‘s claim that he or she reported information to SSA that
would have prevented an overpayment. In addition, waivers granted for
amounts less than $2,000 are not subject to second-party review while
another employee in the office”not necessarily a supervisor”must
review those above $2,000. During our field visits, we identified
variation among staff in their understanding as to how waiver decisions
should be processed, including the extent to which they receive
supervisory review and approval. In some offices, review was often
minimal or non-existent regardless of the waiver amount, while other
offices required stricter peer or supervisory review. In 1999, SSA‘s
OIG reported that the complex and subjective nature of SSA‘s Title II
waiver process, as well as clerical errors and misapplication of
policies by staff, resulted in SSA incorrectly waiving overpayments in
about 9 percent of 26,000 cases it reviewed. The report also noted that
50 percent of the waivers reviewed were unsupported and the OIG could
not make a judgment as to the appropriateness of the decision. The OIG
estimated that the incorrect and unsupported waivers amounted to nearly
$42 million in benefits. While the OIG only examined waivers under the
Title II programs and for amounts over $500, the criteria for granting
SSI waivers are generally the same. Thus, we are concerned that similar
problems with the application of waiver policies could be occurring in
the SSI program.
Conclusions:
SSA has taken a number of steps to address long-standing vulnerabilities
in SSI program integrity. SSA‘s numerous planned and ongoing initiatives
demonstrate management‘s commitment to strike a better balance
between meeting the needs of SSI recipients and ensuring fiscal
accountability for the program. However, it is too early to tell how
effective SSA will ultimately be in detecting and preventing
overpayments earlier in the eligibility determination process,
improving future payment accuracy rates, and recovering a greater
proportion of outstanding debt owed to it. Reaching these goals is
feasible, provided that SSA sustains and expands the range of SSI
program integrity activities currently planned or underway, such as
increasing the number of SSI financial redeterminations conducted each
year and developing and implementing additional overpayment detection
and recovery tools provided in recent legislation.
A fundamental cause of SSI overpayments are the complex rules governing
SSI eligibility. However, SSA has done little to make the program less
complex and error prone, especially in regard to living arrangement
policies. We recognize that inherent tensions exist between simplifying
program rules, keeping program costs down, and ensuring benefit equity
for all recipients. However, longstanding SSI payment errors and high
administrative costs suggest the need for SSA to move forward in
addressing program design issues and devising cost-effective
simplification options. Furthermore, without increased management
emphasis and direction on the use of administrative penalties and
benefit sanctions, SSA risks continued underutilization of these
valuable overpayment deterrence tools. Finally, rapid growth in the
amount of overpayments waived over the last several years, suggest that
SSA may be unnecessarily forgoing recovery of significant amounts of
overpaid benefits. Thus, it is essential that SSA‘s policies and
procedures for waiving overpayments and staff application of those
policies be managed in a way that ensures taxpayer dollars are
sufficiently protected.
Recommendations:
In order to further strengthen SSA‘s ability to deter, detect and
recover SSI overpayments, we recommend that the Commissioner of Social
Security take the following actions:
* Sustain and expand the range of SSI program integrity activities
underway and continue to develop additional tools to improve program
operations and management. This would include increasing the number of
SSI redeterminations conducted each year and fully implementing the
overpayment detection and recovery tools provided in recent
legislation.
* Identify and move forward in implementing cost-effective options for
simplifying complex living arrangement and in-kind support and
maintenance policies, with particular attention to those policies most
vulnerable to fraud, waste, and abuse. An effective implementation
strategy may include pilot testing of various options to more accurately
assess their ultimate effects.
* Evaluate current policies for imposing monetary penalties and
administrative sanctions and take action to remove any barriers to their
usage or effectiveness. Such actions may include informing field staff
on when and how these tools should be applied and studying the extent to
which more frequent use deters recipient nonreporting.
* Reexamine policies and procedures for SSI overpayment waivers and
make revisions as appropriate. This should include an assessment of the
current costs and benefits associated with the $500 waiver threshold and
the extent to which staff correctly apply waiver policies.
Agency Comments and Our Evaluation:
SSA agreed with our recommendations and said that our report would be
very helpful in its efforts to better manage the SSI program. It will
incorporate the recommendations into its SSI corrective action plan, as
appropriate. SSA also assured us that the SSI program is receiving
sustained management attention. In this regard, SSA noted that under the
current plan it has assigned specific responsibilities to key staff,
monitors agency progress, and reviews policy proposals at regularly
scheduled monthly meetings chaired by the Deputy Commissioner.
While agreeing with each of our recommendations, SSA supplied
additional information to emphasize its actions and commitment to
improving SSI program integrity. Regarding simplification of complex
program rules, SSA said it will continue to assess various program
simplification proposals, but it remains concerned about the
distributional effects of potential policy changes. SSA also noted that
even minor reductions in SSI benefits could significantly affect
recipients. Thus, SSA plans to use sophisticated computer simulations
to evaluate the potential impacts of various proposals on recipients.
We recognize that simplifying the program will not be easy, but it is
still a task that SSA needs to accomplish to reduce its vulnerability
to payment errors.
With regard to its overpayment waiver policies and procedures, SSA
agreed to reexamine its current $500 threshold and analyze the extent to
which its staff correctly apply waiver policies. SSA also produced data
indicating that increases in SSI waivers over the last several years
were attributable to the completion of more continuing disability
reviews that result in benefit cessation decisions. Consequently, more
recipients appeal these decisions and request that their SSI benefits
be continued. Recipients can then request waivers of any overpayments
that accrued during the appeal period when a cessation decision is
upheld. Our report recognizes SSA‘s views on the potential cause for
increased waivers. However, we also note that SSI overpayment waiver
increases may be attributable to inconsistent application of agency
waiver policies.
SSA also provided additional technical comments that we have
incorporated in the report, as appropriate. The entire text of SSA‘s
comments appears in appendix II.
We are sending copies of this report to the House and Senate committees
with oversight responsibilities for the Social Security Administration.
We will also make copies available to other interested parties upon
request. In addition, the report will be available at no charge on
GAO‘s Web site at [hyperlink, http://www.gao.gov]. If you have any
questions concerning this report, please call me or Daniel Bertoni,
Assistant Director, on (202) 512-7215. Other major contributors to this
report are Barbara Alsip, Gerard Grant, William Staab, Vanessa Taylor,
and Mark Trapani.
Sincerely yours,
Signed by:
Robert E. Robertson:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Social Security:
The Commissioner:
Social Security Administration:
Baltimore, MD 21235-0001:
August 26, 2002:
Mr. Robert E. Robertson:
Director, Education, Workforce, and Income Security Issues:
U.S. General Accounting Office:
Washington, D.C. 20548:
Dear Mr. Robertson:
Thank you for the opportunity to review and comment on the draft
report, "Supplemental Security Income: Progress Made in Detecting and
Recovering Overpayments, But Sustained Management Attention Needed"
(GAO-02-849). Our comments on the report are enclosed. If you have any
questions, please have your staff contact Odessa J. Woods at (410) 965-
0378.
Sincerely,
Signed by:
Jo Anne B. Barnhart:
Enclosure:
Comments Of The Social Security Administration (SSA) On The General
Accounting Office (GAO) Draft Report, "Supplemental Security Income:
Progress Made In Detecting And Recovering Overpayments, But Sustained
Management Attention Needed" (GAO-92-849):
Thank you for the opportunity to review this draft report. As you note
in the report, the Supplemental Security Income (SSI) program is our
Nation's largest cash assistance program for the poor. The Social
Security Administration (SSA) is committed to administering the SSI
program fairly by ensuring that those individuals who are eligible for
SSI are paid accurately, and that only those individuals eligible for
SSI benefits receive them.
As we told the Comptroller General in our meeting in March, SSA and its
management team are dedicated to better managing the SSI program and
getting it removed from GAO's high risk list as soon as possible A new
Corrective Action Plan was developed, approved and is being
implemented. Specific responsibilities have been assigned. A SSI
management report was designed and is being produced monthly.
Corrective Action Plan progress, legislative and policy proposals and
other relevant issues are reviewed at a regularly scheduled monthly
meeting chaired by SSA's Deputy Commissioner. Therefore we believe,
unlike your title implies, that the SSI program is getting sustained
management attention.
In general, we find your report very helpful. One overall comment is
that the Corrective Action Plan should have been highlighted as it was
developed for and by SSA's new management team. We believe the plan is
the blueprint for getting SSI off the high risk fist. We intend to make
it a living document and will incorporate your recommendations as
appropriate. Our specific comments are as follows:
GAO Recommendation 1:
Sustain and expand the range of SSI program integrity activities
underway and continue to develop additional tools to improve program
operations and management. This would include the number of SSI
redeterminations conducted each year and fully implementing the
overpayment detection and recovery tools provided in recent
legislation.
SSA Comment:
We agree. The report notes SSA's significant progress in this area
through increased matches, additional online access to Federal and
State databases, increased redetermination processing, improved work
measurement and heightened management oversight over SSI workload
processing. As our SSI Corrective Action Plan states, we plan to
continue stressing SST redetermination and diary/alert workload
processing goals to ensure timely processing and increase overpayment
detection. We will also he increasing the SSI redetermination workload
from 2.25 million to 2.45 million in fiscal year 2003. To improve our
ability to prevent overpayments, we plan to pilot test the
effectiveness of having recipients, deemors and representative payees
report monthly wages using touchtone telephone technology, and we will
test a process to access the records of financial institutions to
detect unreported income or assets.
We also agree with the recommendation with respect to the overpayment
detection and collection tools. We recently sent proposed rules to the
Office of Management and Budget (OMB) for review to implement
administrative wage garnishment. We are proceeding with the necessary
systems changes to implement debt collection initiatives such as
administrative wage garnishment.
GAO Recommendation 2:
Identify and move forward in implementing cost-effective options
simplifying complex living arrangements and in-kind support and
maintenance policies, with particular attention to those policies most
vulnerable to fraud, waste and abuse. An effective implementation
strategy may include pilot testing of various options to more
accurately assess their ultimate effects.
SSA Comment:
We agree with GAO that living arrangement (LA) and in-kind support and
maintenance (ISM) policies are highly complex and may significantly
contribute to payment errors in the SSI program because they arc
difficult to explain, apply and changes are often difficult to detect.
We agree that SSA should continue to assess options for simplifying
living arrangement and in-kind support and maintenance policies. As the
report mentions, we have committed to doing so in the SSI Corrective
Action Plan. However, it is important that GAO understands the
tradeoffs involved in implementing the options included in SSA's 2000
report on simplifying the SSI program. For example, the report states
that SSA's analysis of the option to count ISM at the lesser of its
actual value or one-third of the federal benefit rate does not indicate
that the disadvantages outweighed the potential positive effects.
Although this option might reduce program costs, it is estimated to
increase administrative costs since in some cases SSA staff would be
required to complete more calculations than they currently do.
SSA is also very concerned about the distributional effects of
potential policy changes, as even minor reductions in benefits can have
a significant effect on a SSI recipient's ability to meet his or her
basic needs. For example, while the option to reduce benefits by I0
percent for any recipient living with another adult would streamline
living arrangement determinations and would be roughly cost neutral
over a five-year period, it would reduce benefits for over 2 million
recipients.
We are continuing our analysis of the administrative effects of various
simplification proposals before we make a recommendation to proceed
with any particular one. SSA is analyzing several of the options
discussed in the 2000 report, looking for modifications that may make
previously considered proposals more feasible. Rather than pilot
testing of potential simplification options, we prefer to evaluate
proposals using sophisticated computer simulations. While we have the
authority to conduct demonstration projects, we cannot mandate
participation, nor can we engage in a demonstration that would result
in a substantial reduction in an individual's income and resources. The
use of simulation modeling gives us accurate results without running
the risks associated with a demonstration project.
GAO Recommendation 3:
Evaluate current policies for imposing monetary penalties and
administrative sanctions and take action to remove any barriers to
their usage or effectiveness. Such actions may include informing field
staff on when and how these tools should be applied and studying the
extent to which more frequent use deters recipient reporting.
SSA Comment:
We agree. SSA has already taken action to remove barriers for assessing
penalties. Until recently, assessing a penalty was a completely manual
process. New screens in the Modernized SSI Claims System (MSSICS) now
include a screen for assessing penalties. Along the overpayment path,
the penalty screen is available for the field office (FO) to add a
penalty to the individual's record. The system automatically adds the
penalty amount to the record for collection and notice language is now
automated. These two improvements were implemented in September 200I.
On March 1, 2002, we issued a program circular reinforcing the policy
on assessing penalties. The circular pointed out notice software
enhancements field components can use to more easily produce penalty
assessment notices. By the end of the year, we will issue a fact sheet
to FOs reminding them of the importance of applying penalties when
applicable and the procedures for assessing penalties.
SSA's administrative sanction authority is relatively new. (SSA began
using the authority under Interim Final rules in October 2000.) SSA
sought the authority to act as a deterrent in eases where recipients
incur overpayments based on fraud, but the dollar amount is not
significant enough for the Inspector General to recommend for
prosecution. Through the end of July 2002, we have imposed sanctions on
60 SSI cases, 16 cases have been deferred pending future entitlement,
and numerous others are in various stages of due process. To ensure
that our FOs are aware of the availability of sanctions, we have issued
several reminder messages, held Broadcast interactive video training
sessions and issued a policy instruction section on the process. We
continue to work with the regions and our Inspector General's office to
improve the identification of appropriate cases to refer for sanction
and to refine procedures for imposing sanctions.
We will continue to evaluate our policies for penalties and
administrative sanctions and take appropriate actions to remove any
barriers to their usage or effectiveness.
GAO Recommendation 4:
Reexamine policies and procedures for SSI overpayment waivers and make
revisions as appropriate. This should include an assessment of the
current costs and benefits associated with the 5500 waiver threshold
and the extent to which staff correctly apply waiver policies.
SSA Comment:
We will review the current $500 waiver threshold, including an
assessment of the costs and benefits associated with the policy and an
analysis of the extent to which staff correctly apply waiver policies.
However, we believe that we have substantial evidence to support our
contention, shared with GAO during the report clearance process, that
waivers have increased due to the increase in Continuing Disability
Review (CDR) activity rather than as a result of the waiver tolerance.
The waiver tolerance, established in December 1993, is a breakeven
point at which the dollar amount of overpayments recovered from waiver
requests (including both allowed and denied waivers) equals the
resource cost of adjudicating those waivers. SSA uses the waiver
tolerance only when the overpaid person or his representative requests
waiver; SSA does not arbitrarily decide to grant waiver in the absence
of a waiver request. The value of waivers granted for debts under $500
has remained steady at $32 million from I995 through 2001. And, in
1993, before we adopted the higher tolerance, 25.4 percent of all
waivers were for debts under $500. In 2001, only 16.8 percent of all
waivers were for debts of that amount or less. It does not appear that
the waiver tolerance is the cause of the growth in waivers, which
really began in 1999.
In 1999, SSA greatly increased its CDR activity (792,000 SSI-only CDRs
conducted in 1999; up from 389,000 conducted in I998). When a CDR
results in a cessation decision, a recipient is entitled to request
benefit continuation until after an administrative hearing. Because it
can take a protracted amount of time before the hearing is held and a
decision is rendered, large overpayments can accrue in these cases. If
a cessation decision is upheld at a hearing, most recipients request
waiver of the overpayment, and most meet the requirements for approval
of the waiver.
In 1999, waivers also began increasing in total dollar amount. For
example, SSA waived $9I.I million in I998, $I45.2 million in I999,
$I94.4 million in 2000, and S174.3 million in 200I. We believe that the
increase in CDRs is primarily responsible. To reach this conclusion, we
performed a special systems run of SSI record data to identify the
dollars waived from I995-2001, where the cause of the overpayment was
N07 (disability cessation/final decision on CDR).
FY: 1995;
N07 Waivers: $0.6 million;
Non-N07 Waivers: $73.2 million;
Waivers Under $500: $32.2 million.
FY: 1996;
N07 Waivers: $0.9 million;
Non-N07 Waivers: $774.9 million;
Waivers Under $500: $33.1 million.
FY: 1997;
N07 Waivers: $3.0 million;
Non-N07 Waivers: $78.0 million;
Waivers Under $500: $31.9 million.
FY: 1998;
N07 Waivers: $10.0 million;
Non-N07 Waivers: $81.1 million;
Waivers Under $500: $31.1 million.
FY: 1999;
N07 Waivers: $45.0 million;
Non-N07 Waivers: $100.2 million;
Waivers Under $500: $31.4 million.
FY: 2000;
N07 Waivers: $70.0 million;
Non-N07 Waivers: $124.4 million;
Waivers Under $500: $32.1 million.
FY: 2001;
N07 Waivers: $46.0 million;
Non-N07 Waivers: $128.3 million;
Waivers Under $500: $32.9 million.
[End of table]
The chart clearly indicates that the significant increase in waivers
began in FY I999. This is also consistent with the significant increase
in overall SSI waiver dollars.
Other Comments:
Page 6, Paragraph 1:
The Cooperative Disability Investigation (CDI) teams are an SSA effort,
not just an 01G effort. This successful project is managed by SSA's
Office of Operations and Office of Disability as well as the 01G. It
has been very much a cooperative effort. In addition, the sentence
"These teams consist of OIG investigators, state law enforcement
officers and state DDS staff...." should be corrected to state "These
teams consist of OIG investigators, SSA staff, state or local law
enforcement and state DDS staff...."
Page 7, First Full Paragraph, Sentence 4:
We recommend revising this sentence to read, "SSA also made systems
enhancements to better identify newly entitled recipients with
uncollected overpayments...."
Page 7:
We recommend including the following as a separate paragraph after the
first full paragraph on page 7 to disclose an additional system
initiative:
"Also, SSA is implementing another systems initiative to reduce
instances in which overpayments are computed on supplemental security
records (SSR). This initiative will create a new automated process to
net overpayments against underpayments when the SSI system computes
these amounts on an SSR. Today, netting requires SSA employees to
record a series of transactions and, as a result, many opportunities to
perform netting are being lost. SSA estimates that automating the
netting process will reduce overpayments computed on SSRs by up to $60
million each year, with a corresponding reduction in underpayments paid
to beneficiaries. SSA is scheduled to implement automatic netting in
September 2002 and will routinely monitor the results of this new
process."
Page 15, Paragraph 1,
GAO states that SSA has not yet implemented some debt collection tools.
While this is true, the report should explain why those collection
tools have not been implemented. Since 1995, SSA has developed and
implemented no less than eight new debt collection initiatives: tax
refund offset for SSI debts; credit bureau reporting for title II
debts; administrative offset for title II debts; benefit payment
offset; Federal Payment Levy Program; mandatory cross program recovery;
credit bureau reporting for SSI debts; and administrative offset for
SSI debts. We made a conscious decision to implement those tools we
judged would be most cost effective first. The reason the other tools
cited by GAO have not been implemented is that SSA has been busy
working on the debt collection tools that provide direct collections or
that could be integrated into its existing debt management system. The
remaining debt collection tools cited by GAO--administrative wage
garnishment, Federal salary offset, private collection agencies, and
interest charging”are being actively pursued as resources permit.
[End of section]
Related GAO Products:
Social Security Administration: Agency Must Position Itself Now to Meet
Challenges. GAO-02-289T. Washington, D.C.: May 2, 2002.
Social Security Administration: Status of Achieving Key Outcomes and
Addressing Major Management Challenges. GAO-01-778. Washington, D.C.:
June 15, 2001.
High Risk Series: An Update. GAO-01-263. Washington, D.C.: January
2001.
Major Management Challenges and Program Risks: Social Security
Administration. GAO-01-261. Washington, D.C.: January 2001.
Supplemental Security Income: Additional Actions Needed to Reduce
Program Vulnerability to Fraud and Abuse. GAO/HEHS-99-151. Washington,
D.C.: September 15, 1999.
Supplemental Security Income: Long–Standing Issues Require More Active
Management and Program Oversight. GAO/T-HEHS-99-51. Washington, D.C.:
February 3, 1999.
Major Management Challenges and Program Risks: Social Security
Administration. GAO/OCG-99-20. Washington, D.C.: January 1, 1999.
Supplemental Security Income: Action Needed on Long-Standing Problems
Affecting Program Integrity. GAO/HEHS-98-158. Washington, D.C.:
September 14, 1998.
High Risk Program: Information on Selected High-Risk Areas. GAO/HR-97-
30. Washington, D.C.: May 16, 1997.
High Risk Series: An Overview. GAO/HR-97-1. Washington, D.C.: February
1997.
[End of section]
Footnotes:
[1] U.S. General Accounting Office, Supplemental Security Income:
Action Needed on Long-Standing Problems Affecting Program Integrity,
GAO/HEHS-98-158 (Washington, D.C.: Sept. 14, 1998).
[2] U.S. General Accounting Office, High Risk Series: An Overview,
GAO/HR-97-1, (Washington, D.C.: Feb. 1997).
[3] Social Security Administration, Management of the Supplemental
Security Income Program: Today and in the Future, October 8, 1998.
[4] Social Security Administration, SSI Corrective Action Plan-Removing
SSI From GAO‘s ’High-Risk“ List, June 2002.
[5] U.S. General Accounting Office, Supplemental Security Income:
Opportunities Exist for Improving Payment Accuracy, GAO/HEHS-98-75
(Washington, D.C.: Mar. 27, 1998).
[6] Generally, SSI recipients residing in a nursing home for more than
1 month receive only $30 in SSI benefits per month.
[7] ISM refers to the noncash income available to a recipient in the
form of food, clothing, or shelter. The combination of ISM and cash
income available to an applicant can either reduce or possibly preclude
the receipt of SSI benefits.
[8] SSA also administers the Old-Age, Survivors, and Disability
Insurance Programs under Title II of the Social Security Act.
[9] Social Security Administration, Simplifying the Supplemental
Security Income Program: Challenges and Opportunities, December 2000.
[10] Until 1998, SSA could only reduce these benefits with the consent
of the former recipient.
[End of section]
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