Supplemental Security Income
SSA Could Enhance Its Ability to Detect Residency Violations Gao ID: GAO-03-724 July 29, 2003The Supplemental Security Income (SSI) program paid about $35 million recipients in 2002. In recent years, the Social Security Administration (SSA) has identified a general increase in the amount of annual overpayments made to (1) individuals who are found to have violated program residency requirements or (2) recipients who leave the United States and live outside the country for more than 30 consecutive days without informing SSA. This problem has caused concern among both program administrators and policy makers. As such, GAO was asked to determine what is known about the extent to which SSI benefits are improperly paid to individuals who are not present in the United States and to identify any weaknesses in SSA's processes and policies that impede the agency's ability to detect and deter residency violations.
Overpayments resulting from residency violations totaled about $118 million between 1997 and 2001. However, this figure, which represents only violations detected by SSA, likely understates the true level of the problem. Additionally, the extent of violations appears to vary by geographic region, with overpayments being more prevalent in several large metropolitan areas. GAO found that 54 percent of all overpayments detected by SSA during this period occurred in just 15 counties. In addition, GAO found that recipients born outside the United States accounted for at least 87 percent of all residency overpayments. SSA's ability to detect and deter residency violations is impeded by three kinds of weaknesses. First, the agency relies heavily on self-reported information from recipients to determine domestic residency, often without independently verifying such information. Second, SSA makes insufficient use of existing tools to detect violations, such as its "risk analysis" system, redeterminations, and home visits. Finally, the agency has not adequately pursued independent sources of information from other federal agencies or private organizations to detect nonresidency of SSI recipients. GAO recognizes that the SSI program is complex to administer, and residency requirements are particularly difficult to enforce because they can necessitate time-consuming, labor-intensive verification checks, such as home visits. However, SSA has not employed a systematic, comprehensive approach to this problem that would allow the agency to use its available systems and procedures more efficiently and reduce the program's exposure to additional violations.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-03-724, Supplemental Security Income: SSA Could Enhance Its Ability to Detect Residency Violations
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Report to the Chairman, Subcommittee on Human Resources, Committee on
Ways and Means, House of Representatives:
United States General Accounting Office:
GAO:
July 2003:
Supplemental Security Income:
SSA Could Enhance Its Ability to Detect Residency Violations:
GAO-03-724:
GAO Highlights:
Highlights of GAO-03-724, a report to the Chairman, Subcommittee on
Human Resources, Committee on Ways and Means, House of
Representatives
Why GAO Did This Study:
The Supplemental Security Income (SSI) program paid about $35 billion
in benefits to about 6.8 million recipients in 2002. In recent years,
the Social Security Administration (SSA) has identified a general
increase in the amount of annual overpayments made to (1) individuals
who are found to have violated program residency requirements or (2)
recipients who leave the United States and live outside the country
for more than 30 consecutive days without informing SSA. This problem
has caused concern among both program administrators and policy
makers. As such, GAO was asked to determine what is known about the
extent to which SSI benefits are improperly paid to individuals who
are not present in the United States and to identify any weaknesses in
SSA‘s processes and policies that impede the agency‘s ability to
detect and deter residency violations.
What GAO Found:
Overpayments resulting from residency violations totaled about $118
million between 1997 and 2001. However, this figure, which represents
only violations detected by SSA, likely understates the true level of
the problem. Additionally, the extent of violations appears to vary by
geographic region, with overpayments being more prevalent in several
large metropolitan areas. GAO found that 54 percent of all
overpayments detected by SSA during this period occurred in just 15
counties. In addition, GAO found that recipients born outside the
United States accounted for at least 87 percent of all residency
overpayments.
SSA‘s ability to detect and deter residency violations is impeded by
three kinds of weaknesses. First, the agency relies heavily on self-
reported information from recipients to determine domestic residency,
often without independently verifying such information. Second, SSA
makes insufficient use of existing tools to detect violations, such as
its ’risk analysis“ system, redeterminations, and home visits.
Finally, the agency has not adequately pursued independent sources of
information from other federal agencies or private organizations to
detect nonresidency of SSI recipients. GAO recognizes that the SSI
program is complex to administer, and residency requirements are
particularly difficult to enforce because they can necessitate time-
consuming, labor-intensive verification checks, such as home visits.
However, SSA has not employed a systematic, comprehensive approach to
this problem that would allow the agency to use its available systems
and procedures more efficiently and reduce the program‘s exposure to
additional violations.
What GAO Recommends:
GAO is making recommendations to the Commissioner of Social Security
that will allow the agency to make optimal use of existing tools and
new data sources to better detect potential residency violators.
Social Security generally agreed with GAO‘s recommendations, but
identified some challenges to their implementation.
www.gao.gov/cgi-bin/getrpt?GAO-03-724. To view the full report,
including the scope and methodology, click on the link above.
For more information, contact Robert E. Robertson (202) 512-7215 or
RobertsonR@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
SSA Detected Overpayments of $118 Million for Residency Violations over
5 Years, but More May Go Undetected:
Reliance on Self-Reported Information and Other Vulnerabilities Impede
SSA's Ability to Detect and Deter Violations:
Conclusions:
Recommendations:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Social Security Administration:
GAO Comments:
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Variables That Indicate a Recipient May Potentially Be Out of
the United States:
Table 2: Odds Ratios for the Variables in Our Logistical Regression
Analysis:
Figures:
Figure 1: Top 15 Counties for SSI Residency Overpayments, 1997-2001:
Figure 2: Top 15 Countries of Origin for SSI Residency Overpayments,
1997-2001:
Abbreviations:
ATM: automated teller machines:
CMS: Centers for Medicare and Medicaid Services:
DHS: Department of Homeland Security:
INS: Immigration and Naturalization Service:
OIG: Office of Inspector General:
SSA: Social Security Administration:
SSI: Supplemental Security Income:
United States General Accounting Office:
Washington, DC 20548:
July 29, 2003:
The Honorable Wally Herger
Chairman, Subcommittee on Human Resources
Committee on Ways and Means
House of Representatives:
Dear Mr. Chairman:
The Supplemental Security Income (SSI) program is the nation's largest
cash assistance program for the poor. The program paid about $35
billion in benefits to about 6.8 million aged, blind, and disabled
recipients in 2002.[Footnote 1] Most SSI recipients are also eligible
to receive medical benefits under the Medicaid program.[Footnote 2]
Benefit eligibility and payment amounts for the SSI population are
determined by complex and often difficult to verify factors such as an
individual's living arrangements, including whether an individual
resides in the United States. Individual circumstances such as
permanent residence may change frequently, requiring staff to regularly
reassess recipients' eligibility for benefits. Thus, the SSI program
tends to be difficult, time-consuming, and labor-intensive to
administer. The program's complexity has also made it susceptible to
overpayments.[Footnote 3] In recent years, the Social Security
Administration (SSA) has identified a general increase in the amount of
annual overpayments made to (1) individuals who are found to have
violated program residency requirements or (2) recipients who leave the
United States[Footnote 4] and live outside the country for more than 30
consecutive days without informing SSA. This problem, which we refer to
as a "residency violation," has caused concern among both program
administrators and policy makers.[Footnote 5]
Because of your interest in the SSI program's potential vulnerability
to residency violations, you asked us to (1) determine what is known
about the extent to which SSI benefits are improperly paid to
individuals who are not present in the United States and (2) identify
any weaknesses in SSA's processes and policies that impede the agency's
ability to detect and deter residency violations. To answer these
questions, we reviewed SSI performance data, prior reports by SSA and
its Office of Inspector General (OIG), and our prior work on the SSI
program. We analyzed SSI payment data over a 5-year period between 1997
and 2001 and examined cases in which SSA identified recipients who were
residing outside the country. In addition, we developed and tested a
statistical model to help predict whether certain SSI recipients were
more likely than others to have residency violations. Finally, we
conducted in-depth interviews with more than 150 management and line
staff from SSA's headquarters; its regional offices in Atlanta,
Chicago, Dallas, New York, and San Francisco; 17 field offices; as well
as officials from other federal agencies, including the former
Immigration and Naturalization Service (INS)[Footnote 6] and the
Centers for Medicare and Medicaid Services. During our meetings, we
documented management and staff views on how extensive residency
violations are in the SSI program; the effectiveness of current
procedures and processes for detecting and preventing residency
violations; and potential improvements to existing program processes,
policies, and systems. We performed our work from September 2002
through May 2003 in accordance with generally accepted government
auditing standards.
Results in Brief:
SSA detected overpayments of $118 million for residency violations
between 1997 and 2001, but interviews with OIG and agency officials
suggest that the agency detects only a portion of the violations that
occur each year, at least in some parts of the country. Prior studies
and special projects by SSA and its OIG show that residency violations
are a pervasive problem in some field offices. Additionally, the extent
of violations appears to vary by geographic region, with overpayments
being more prevalent in several large metropolitan areas. In
particular, we found that 54 percent of all overpayments detected by
SSA during this period occurred in just 15 counties in five states--
California, Florida, Illinois, New Jersey, and New York. Finally, we
found that recipients born outside the United States accounted for at
least 87 percent of all residency overpayments.
Three kinds of weaknesses impede SSA's ability to detect and deter
residency violations: The agency (1) relies heavily on self-reported
information from recipients to verify domestic residency; (2) makes
insufficient use of its existing tools to detect violations; and (3)
has not pursued independent sources of information to detect
nonresidency of SSI recipients. First, in asking SSI recipients about
their current residence, field staff often rely on recipients' own
assertions and may accept only minimal documentation from them, such as
rent receipts and statements from neighbors or clergy. Recipients who
wish to misreport their residency can manipulate such documents.
Second, the agency makes limited use of tools at its disposal to detect
possible violators. For example, while SSA routinely employs a risk
analysis system to identify SSI recipients who are more likely to incur
overpayments, it does not use this tool to specifically consider and
target potential residency violators. A model we developed and tested
to predict residency violations-that includes characteristics such as
prior violations, use of post office boxes, and birth outside the
United States-suggests that SSA could, in fact, make better use of its
risk analysis system to detect and prevent residency violations.
Additionally, while we found that home visits are being utilized as
part of redetermination reviews in some of the offices we visited and
are cost-effective, SSA has not systematically implemented this tool in
other offices. Other tools the agency has made only limited use of are
monetary penalties and administrative sanctions, such as loss of
benefits. Several field staff told us they rarely employ either,
because monetary penalties are too small to deter potential violators,
and administrative sanctions involve a time-consuming and cumbersome
process. Finally, SSA has not adequately pursued the use of
independent, third-party data such as recipient bank account
information to help detect residency violations. Although SSA is
currently working with an independent contractor to obtain access to
SSI recipients' financial data, the agency plans to use the information
only to verify their financial resources. It does not plan to use the
information to detect those who may be living and making financial
transactions outside the United States for extended periods of time.
Detecting residency violations in a cost-effective manner presents
particularly difficult challenges. However, we believe that there are a
number of opportunities that SSA can take advantage of, and
accordingly, we are recommending that the Commissioner of Social
Security direct the agency to make optimal use of existing tools while
exploring new data sources to better detect potential residency
violators.
Social Security generally agreed with our recommendations, but also
identified some challenges to their implementation.
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. In 2002, about 6.8 million
recipients were paid about $35 billion in SSI benefits.
Individuals may apply for SSI benefits at any of about 1,300 SSA field
offices. During the initial interview, SSA staff solicit information on
applicants' financial situation and the disability being claimed.
Applicants are required to report any information that may affect their
eligibility for benefits, such as income, resources, and their living
arrangements (including current residence). Similarly, once
individuals receive SSI benefits, they are required to report changes
in their address or residence to SSA in a timely manner. The Social
Security Act (Section 1614 (a)(1)(B)(i)) requires that an individual be
a resident of the United States to be eligible for SSI payments. SSA
guidelines define a resident of the United States as a person who has
established a dwelling in the United States with the intent to live in
the country. Section 1611(f) of the act also stipulates that no
individual is eligible for SSI payments for any month during all of
which the individual is outside the United States. Further, an
individual who is outside the United States for 30 consecutive days
cannot be eligible for SSI benefits until he or she has been back in
the United States for 30 days. Recipients who fail to establish
residency in accordance with SSI program guidelines, or do not report
absences of 30 consecutive days or more, may be subject to
overpayments, monetary penalties, and administrative sanctions such as
suspension of benefits. Similarly, SSI recipients who become ineligible
for SSI benefits because they violate SSI residency guidelines may also
be ineligible to receive Medicaid benefits.
To a significant extent, SSA depends on program applicants and current
recipients to accurately report important eligibility information. To
verify this information, SSA may use computer matches to compare SSI
records against recipient information in records of third parties such
as other federal agencies. SSA also periodically conducts
"redetermination" reviews to verify important eligibility factors such
as income and resources to determine whether recipients remain eligible
for benefits after the initial assessment. Recipients are reviewed at
least every 6 years, but reviews may be conducted more frequently if
SSA determines that changes in eligibility are likely. To determine
which recipients should receive more frequent reviews, SSA uses a risk
analysis system[Footnote 7] to identify recipients who may be more
likely to incur overpayments. Those identified as "high-risk" generally
have a redetermination conducted at least annually by SSA field office
staff who contact the recipient in person or by phone, while lesser-
risk redetermination reviews (such as those designated "low-risk") may
only be conducted once every several years by mail. In addition, SSA
uses "limited issue" redetermination reviews to review a specific
factor that may affect a recipient's eligibility, such as income or
current residence. These reviews tend to be less time-consuming and
labor intensive for field staff to perform than "full" redetermination
reviews, which often require an examination of numerous eligibility
factors.
In recent years, detected overpayments from residency violations
increased from about $13.7 million in 1995 to about $22 million in
2001, reaching a high of almost $27 million in calendar year
2000.[Footnote 8] In addition, the number of individuals SSA detected
receiving SSI benefits while outside the United States increased from
about 44,000 recipients in 1997 to almost 49,000 recipients in 2001.
SSA Detected Overpayments of $118 Million for Residency Violations over
5 Years, but More May Go Undetected:
SSA detected overpayments of $118 million for residency violations
between 1997 and 2001, but interviews with OIG and SSA officials
suggest that the agency detects only a portion of the violations that
occur each year, at least in some parts of the country. Special
initiatives of limited duration conducted by SSA and its OIG have
uncovered additional residency overpayments. According to our own
analysis of SSA's data, residency overpayments appear to vary by
geographic region, with the majority of overpayments having been
detected in several large metropolitan areas. Finally, we determined
that most of the overpayments detected during this period were
attributable to recipients who were born outside the United States.
Residency Violations May Be More Prevalent than SSA Currently Detects:
SSA detected an average of about 46,000 recipient residency violations
annually between 1997 and 2001, resulting in $118 million in
overpayments. While SSA's data show that less than 1 percent of all SSI
recipients violate residency requirements annually, SSA field staff and
OIG officials suggest that the problem may be more prevalent. For
example, staff and managers from field offices in several SSA regions
estimated that over 40 percent of all recipients are in violation of
residency requirements at some point. A small number of staff told us
that as much as 90 percent of recipients served by their office may be
involved in such violations. Other staff said that while the problem is
more pervasive than SSA currently detects, it is difficult to estimate
the true extent of the problem because the agency relies heavily on
recipients to self-report absences from the country. In addition, a
number of OIG officials we spoke with told us that residency violations
are significantly higher than SSA currently detects; one official
familiar with this problem estimated that as much as 70 percent of SSI
recipients in some areas close to the southern border of the United
States improperly receive benefits outside the country.
Over the past few years, SSA and its OIG have initiated a number of
projects that uncovered additional residency violations and
overpayments. Although there is no empirical data to determine the true
level of residency violations nationwide, these studies have estimated
that residency violations in certain regions of the country may
represent as much as 26 percent of SSI cases in those areas. These
initiatives, which were limited in duration and were performed within
specific geographic areas, include the following:
* A 1997 SSA and OIG joint study of SSI residency used home visits in
southern California to identify potential residency violations. The
study concluded that about 25 percent of SSI recipients in 1 field
office were living outside of the country. The study also determined
that 47 percent of SSI recipients from this field office could not be
located at their reported residence, an indication that they may be
violating residency requirements.
* A 1998 OIG eligibility study in El Paso, Texas, found that about 26
percent of recipients investigated were violating residency
requirements. This project identified a total of about $3 million in
residency overpayments.
* In 1998 and 1999, joint SSA/OIG studies examined 32,641 recipients in
New York and California who had not used their Medicaid benefits for at
least 1 year.[Footnote 9] Using redetermination reviews, these studies
found that 1,281 recipients (about 4 percent) were living outside the
United States.[Footnote 10]
* A 2002 SSA residency verification project in 5 South Florida field
offices used a targeted sample of 750 noncitizen recipients that
uncovered a total of over $107,000 in additional residency
overpayments. Staff performed special redetermination reviews in which
recipients were required to produce a valid passport as proof of
continuing residency in the United States and found 46 recipients (6
percent) violating residency requirements.
* A 2002 OIG address verification project in New York uncovered 205
recipients violating SSI residency requirements resulting in a total of
about $262,000 in overpayments. These recipients were found to be
receiving both SSI and Title II Social Security benefits at addresses
in two different countries. The study also found that SSA's automated
controls and special projects did not identify SSI recipients who had
their benefits direct deposited into banks in Puerto Rico or the U.S.
Virgin Islands.
While the results of these projects suggest that the problem is more
pervasive than the 1 percent of recipients that SSA's data show, SSA
has not systematically implemented similar projects in other areas that
might benefit from these efforts.
Many Violations Are Geographically Concentrated:
Our analysis of SSA's data also shows that overpayments due to
residency violations are more prevalent in a number of large
metropolitan areas. For example, overpayments from violations detected
in Los Angeles County, California, represented 10.5 percent of the
nation's SSI residency overpayments between 1997 and 2001. Overall, our
analysis indicates that just 15 counties in five states--California,
Florida, Illinois, New Jersey, and New York--accounted for 54 percent
of all residency overpayments detected by SSA during this period. (See
fig. 1.) In addition to Los Angeles County, other counties with a
significant percentage of SSI residency overpayments include Queens
County, New York (5.2 percent); New York County, New York (5.0
percent); Kings County, New York (4.8 percent); San Diego County,
California (4.1 percent); and Bronx County, New York (3.5 percent).
Moreover, of approximately 3,000 counties in the United States, 50
accounted for 77 percent of all residency overpayments detected by SSA
during this time.
Figure 1: Top 15 Counties for SSI Residency Overpayments, 1997-2001:
[See PDF for image]
[End of figure]
Most Overpayments Were Made to Recipients Born outside the United
States:
SSA's data also show that individuals born outside the United States
accounted for at least 87 percent of all SSI residency overpayments
between 1997 and 2001.[Footnote 11] Residency overpayments were most
common among recipients who were born in Latin America, the Caribbean,
and South/Southeast Asia, but included other areas as well, such as the
Middle East. (See fig. 2.) Recipients from the Philippines accounted
for the greatest amount of residency violations or $24 million of all
SSI residency overpayments during this period. SSA data also show that
recipients from just 14 countries and one United States territory
accounted for about 73 percent of all residency overpayments during
this period. In addition to the Philippines (20.2 percent), these
include the Dominican Republic (12.3 percent), Mexico (7.6 percent),
Puerto Rico (7.5 percent), India (7.1 percent), and Iran (3.4 percent).
Moreover, a prior study by SSA's OIG found that SSI residency
violations are more prevalent among recipients born outside the United
States than for native-born citizens. Specifically, the OIG found that
more than 20 percent of the recipients born outside the United States
had periods of ineligibility because of absences from the United
States, compared with 0.2 percent for native-born recipients.
Figure 2: Top 15 Countries of Origin for SSI Residency Overpayments,
1997-2001:
[See PDF for image]
[A] Puerto Rico is a United States territory.
[End of figure]
Reliance on Self-Reported Information and Other Vulnerabilities Impede
SSA's Ability to Detect and Deter Violations:
SSA's ability to detect and deter residency violations is impeded by
three kinds of weaknesses: dependence on self-reported information by
clients, insufficient use of existing compliance tools, and a failure
to pursue independent data sources for its verifications. First, the
agency relies heavily on self-reported information from recipients to
determine domestic residency, often without independently verifying
such information. Second, to detect and deter residency violations, SSA
makes insufficient use of its existing tools for program integrity,
such as its risk analysis system to screen for high-risk cases. To test
the feasibility of using the agency's system to screen for residency
violations, we developed and tested, with some success, a statistical
model of factors that may be associated with such violations. SSA has
also not made optimal use of redetermination reviews, home visits,
monetary penalties, and administrative sanctions. Finally, the agency
has not employed the use of independent data sources from other federal
agencies or private organizations to detect nonresidency of SSI
recipients.
SSA Relies Heavily on Self-Reported Information That Can Be
Manipulated:
SSA relies heavily on self-reported information, such as documents and
statements from recipients to establish proof of U.S. residency.
According to SSA and OIG officials, however, this practice increases
the SSI program's vulnerability to residency fraud and abuse. Our prior
work has shown that about 77 percent[Footnote 12] of all payment errors
in the SSI program were attributable to recipients who do not comply
with reporting requirements.[Footnote 13] In our current review, about
half of SSA field staff we interviewed reported that they rely on
recipients to self-report important information with respect to travel
outside the United States. SSI program guidelines generally direct SSA
staff to accept recipients' assertions concerning residency unless they
have reason to question the accuracy of their statements. SSA staff
also have discretion with respect to the types of documents they can
accept to confirm that a recipient resides at a given address. For
example, program guidelines direct field staff to obtain a combination
of two or more documents as proof of initial residency. Acceptable
documentation includes such things as rent receipts, utility bills,
driver licenses, pay stubs, or mail addressed to the recipient. If SSA
field staff have reason to believe that a recipient has been outside
the country for more than 30 days, or information in SSA records
conflicts with recipients' statements, they may request additional
documentation such as an airline ticket, passport (or similar evidence
that establishes date of entry into the United States), or a signed
statement from one or more U.S. residents, such as neighbors, clergy,
or others who may have knowledge of the individual's whereabouts. In
general, program guidelines do not require field staff to perform any
additional verification steps to establish recipients' residency during
initial or post-entitlement eligibility reviews.[Footnote 14]
We were also told that some of the documents accepted by SSA as proof
of residence are subject to manipulation or forgery. For example, staff
in 1 field office noted that documents such as rent receipts can be
purchased from a local drugstore and easily forged. Other field staff
said that statements from neighbors could be falsified or manipulated
to support assertions that an individual has not traveled outside the
country. Field staff also reported that recipients may use multiple
passports in order to conceal extended stays outside the country. For
example, staff in two SSA regions we visited said that SSI recipients
sometimes use a foreign passport to exit and reenter the country while
maintaining a separate, "clean" U.S. passport for evidence of
continuing residency. One field office staff reported that some
recipients have even paid foreign customs officials not to stamp their
passport to conceal evidence that they were outside the country.
Given the agency's heavy reliance on self-reported information, we
found that SSA field staff often relied on their personal experience,
judgment, and ad hoc interviewing procedures to detect potential
residency violations. In particular, SSA field staff look for
inconsistencies in recipient's statements or their inability to answer
simple questions about where they live. For example, recipients may be
asked about the names of people living in their household, or basic
facts about their neighborhood such as the location of a well-known
landmark. Field staff may also ask whether a recipient owns property
outside the United States. Questionable or inconsistent answers to such
questions may result in requests to provide additional documentation.
However, the ability of staff to effectively identify violators often
depends on the experience and persistence of individual staff. This is
particularly true in the case of recipients who are "coached" by
advocacy groups or others to provide false information to SSA in order
to obtain or retain SSI benefits. For example, one official told us
that they recently identified an SSI applicant who apparently was
coached to provide false information to SSA regarding her residence in
the United States. Upon further questioning, the recipient admitted
that she was not residing continuously in the United States and had
misreported her residency to SSA in order to obtain SSI benefits. In
addition, field staff who were familiar with this problem told us that
they sometimes look for suspicious documents that recipients may reveal
during the course of an office visit, such as a foreign driver license
or foreign voter registration card. One manager in a field office close
to the Mexican border also noted that some field staff check address
listings in Mexican telephone books or check the parking lot for cars
with foreign license plates.
Our review also found that the procedures for documenting recipients'
residency vary widely among the offices we visited. In particular, the
number and types of evidentiary documents requested by staff differed
across the field offices we visited. While staff in several offices
reported that they often request only the most basic documentation
required by SSI program guidelines, staff in other offices told us that
they routinely ask for additional documentation for recipients. For
example, some field staff we interviewed noted that they ask recipients
to provide a second passport or other documents (such as travel
documents from foreign consular offices) to determine whether the
individual has been outside the country for more than 30 days. While
these steps are not required by SSI program guidelines, some field
staff reported that they have been effective in identifying potential
violators and deterring future violations. SSA staff reported a number
of reasons for different documentation requirements such as variance in
individual office policies, personal preferences based on experience,
time pressures to complete cases, and the inability to effectively
verify supplied documentation.
SSA Does Not Fully Exploit Its Tools for Detecting Program Violations:
SSA has not made optimal use of several tools that could be used to
detect residency violations. These include its "risk analysis system"
for screening cases more likely to result in overpayments, its
"redetermination reviews" of recipients' eligibility, and home visits
to verify recipients' whereabouts. Given its current focus on other
types of program violations such as excess income or resources, some
staff told us that SSA's risk analysis system is not entirely effective
at identifying residency violators. SSA has used statistical risk
analysis techniques for many years in the SSI program to identify
recipients who are more likely to be overpaid. Since SSA lacks adequate
staff resources to conduct an annual redetermination for every
recipient, it routinely screens for and targets those participants who
are most likely to have a change in their eligibility status or benefit
amount.[Footnote 15] Despite the proven effectiveness of its risk
analysis system to help the agency detect cases with highest potential
for overpayments, SSA has not used this tool to specifically identify
residency violations. In fact, a number of field staff told us that, in
their experience, residency violations frequently occur among SSI
recipients who are designated as medium or low risk for payment errors
by SSA's system. The agency may not discover these violations for
several years (if at all) unless it detects a change in a recipient's
circumstances that causes the individual to be designated as high risk.
To determine whether it is possible for SSA to target potential
residency violators more effectively using its existing systems, we
developed and tested a statistical model of factors possibly associated
with residency violations.[Footnote 16] Based on our field work and
prior SSA and OIG studies, we selected the following factors for
testing: recipients born outside the United States, prior residency
violations, payments made to post office boxes, direct deposit
payments, and lack of response to agency inquiries or recipients with
unknown whereabouts.[Footnote 17] Using this model as a screen, we
identified all recipients who were currently in violation of residency
requirements as of April 2003.[Footnote 18] We found that recipients
born outside the United States--noncitizens as well as naturalized
citizens--were more than 40 times as likely to be violating residency
requirements than were native-born recipients. Similarly, recipients
with prior residency violations were about 10 times as likely to be
current violators compared with recipients who have no prior
violations. We also found that recipients who used post office boxes
were somewhat more likely to be receiving benefits outside the country
than those without post office boxes. Some of the other factors we
considered, however, such as recipients who use direct deposit, and
lack of response of agency inquiries, were less likely to be residency
violators. Given the potential usefulness of this limited modeling
demonstration, it may be possible for SSA to expand and refine its risk
analysis system to better target potential violators.
Beyond the targeting problems we identified with SSA's risk analysis
system, we found that the agency was not using redeterminations as
efficiently as it could despite the fact that SSA's data and our prior
reviews have documented their effectiveness for verifying recipients'
eligibility.[Footnote 19] In particular, home visits are not used
frequently enough during redetermination reviews according to staff in
a number of offices we visited. Although a number of field staff who
use home visits reported that it is a highly effective tool for
verifying recipients' residency, SSA and OIG officials told us that
this technique is not currently employed in some offices that could
benefit from the practice. For example, while a number of field offices
in two SSA regions we visited routinely use home visits, other offices
in the same geographic area rarely use this tool. SSA officials and
field office staff told us that a number of factors account for the
variation in how frequently this technique is used. These include a
lack of adequate staff resources in some offices, differences in the
priorities of field office managers, and differences in how individual
staff view the seriousness of the residency problem.
Those field offices that do carry out home visits as part of their
redetermination procedures have found them effective. About half of the
field offices we visited (9 of 17) routinely employ home visits at
least some of the time to verify whether recipients actually live at
the address they report to SSA. For example, SSA's regional office in
Dallas, Texas, currently contracts with a private investigation firm to
conduct residency home visits. Using these investigators, field offices
within the region performed 4,200 home visits that uncovered at least
$2.1 million in additional overpayments between October 1997 and
January 2003. According to SSA data, this project achieved a benefit-
to-cost ratio of almost 8 to 1. Similarly, the California Department of
Health Services has worked cooperatively with SSA field offices in the
San Diego area by conducting residency home visits. Because Medicaid
eligibility is often directly tied to SSI eligibility, identifying
residency violations may save funds from both programs. Between October
2000 and September 2002, state Medicaid investigators identified about
1,600 SSI recipients with residency violations. SSI staff in
participating offices refer recipients suspected of violating residency
guidelines to the Medicaid investigators, who subsequently perform
unannounced home visits to establish the recipient's residency. Both
SSA and state officials we interviewed told us that this project has
been effective at identifying residency violations that might not have
been detected by the agency using standard verification procedures. For
example, in April of 2002, state investigators discovered an SSI
recipient who was using a residence in southern California as a mailing
address. The investigators determined that this recipient had been
residing in Tijuana, Mexico, for at least 8 years. Similarly, in June
2002, state investigators found an SSI recipient using a post office
box in southern California as a mailing address. Upon further
examination, the investigators determined that the recipient had been
living in San Felipe, Mexico, since 1982. In addition, in July 2002,
state investigators identified two SSI recipients who improperly
received SSI benefits while residing in Tijuana, Mexico, between August
1999 and April 2002. SSA estimates that these recipients were overpaid
more than $40,000 during this time. Finally, because the state provides
this service to SSA free of charge, it is highly cost-effective.
In terms of deterring future violations, we found that monetary
penalties and administrative sanctions are rarely, if ever, used in the
offices we visited.[Footnote 20] For example, about 72 percent of the
field staff we interviewed said that penalties or sanctions are not
used in their offices, or are only used occasionally. National data on
SSA's use of monetary penalties and administrative sanctions also
suggest that these tools are not routinely utilized for recipients who
fail to report important information that can affect their eligibility,
including absences from the country. For example, in a recent report,
we estimated that at most about 3,500 recipients were penalized for
reporting failures in fiscal year 2001.[Footnote 21] Under the law, SSA
may impose monetary penalties on recipients who do not file timely
reports about factors or events that can affect their benefits. A
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 information so SSA can
adjust its records to correctly pay benefits. However, a large number
of staff we interviewed noted that monetary penalties are too low to be
an effective deterrent against future residency violations. In
addition, the Foster Care Independence Act of 1999 (Pub. L. No. 106-
169) gave SSA authority to impose administrative sanctions on persons
who misrepresent material facts that they know, or should have known,
were false or misleading. In these circumstances, SSA may suspend
benefits for 6 months for the initial violation, 12 months for the
second violation, and 24 months for subsequent violations. Despite
having this authority, we found that administrative sanctions such as
benefit suspension are rarely if ever used by field staff for residency
violators. Consistent with the results of our field work, a prior
review shows that administrative sanctions were only imposed in 21
cases nationwide as of January 2002.[Footnote 22] A substantial number
of staff told us that they rarely use this tool because the process for
imposing administrative sanctions is often time-consuming and
cumbersome. In addition, some staff reported that SSA management does
not encourage the use of penalties or sanctions to deter residency
violations. In response to recommendations we made in a recent report,
SSA is currently evaluating its policies for imposing monetary
penalties and administrative sanctions.[Footnote 23]
SSA Has Not Actively Pursued Third-Party Data Sources to Detect
Potential Violators:
While SSA uses third-party information to verify certain aspects of
recipients' eligibility such as income, we found that the agency lacks
adequate outside data sources to detect potential residency
violations.[Footnote 24] SSA is planning to conduct periodic computer
matches with immigration databases to identify noncitizen SSI
recipients who voluntarily report their planned absences from the
country[Footnote 25] or are deported from the United States. The agency
currently receives periodic paper reports from immigration officials on
noncitizens who have current and planned absences from the United
States and sends them to the appropriate SSA field offices for follow
up. However, these procedures are only effective for recipients who
voluntarily report their absence to immigration officials. Thus, SSA
will remain limited in its ability to independently verify the
residency of SSI recipients who deliberately seek to conceal extended
periods outside the country. Over half of the SSA managers and field
staff we interviewed told us that access to automated immigration data
would help them to more accurately verify recipients' residency.
Despite this limitation, SSA has not adequately explored the potential
for obtaining access to emerging data sources such as an entry-exit
system being developed by the Department of Justice and the Department
of Homeland Security (DHS).[Footnote 26] This system is being
implemented as a mechanism to monitor all major ports of entry/exit in
the United States, including land crossings, seaports, and airports.
Once operational, this system will allow authorized federal agencies to
collect, maintain, and share information on selected individuals who
enter and exit the United States to ensure border security, among other
purposes. Our work suggests that this system may also provide
information that could help SSA determine when noncitizen SSI
recipients exit the country for extended periods of time. We
acknowledge that such databases could have limitations that affect
their accuracy and completeness--especially given problems that our
prior work has identified with some immigration data.[Footnote 27]
Thus, SSA would likely have to determine the reliability and cost-
effectiveness of accessing such data before negotiating data sharing
agreements and using the information for detecting potential residency
violations.
SSA has also not fully utilized its authority to obtain independent
data from other sources, such as financial institutions, as a tool for
detecting potential residency violations. The Foster Care Independence
Act of 1999 granted SSA new authority to verify recipients' financial
accounts. To implement this authority, SSA issued proposed regulations
on its new processes for accessing financial data in May 2002.[Footnote
28] These regulations, which were still in draft at the time of our
report, may permit SSA to obtain a variety of financial records from
banks, credit card companies, and other financial institutions,
including those operating branches and automated teller machines (ATM)
outside the United States. However, according to SSA officials, the
agency only intends to use this information to verify recipients' bank
account balances as a way of verifying their financial resources. SSA
does not currently plan to use financial institution data more broadly
to detect potential residency violations.
Given the relatively narrow scope of SSA's proposed use of financial
data, the agency may be unnecessarily limiting its ability to detect
residency violations. In particular, SSA may be missing potentially
helpful sources of information such as data on recipients who conduct
banking transactions outside the United States using ATMs. As noted
previously, a large proportion of the residency overpayments SSA
detected between 1997 and 2001 were tied to recipients who originated
in various countries in Latin America and South/Southeast Asia.
However, SSA currently has no way to identify recipients who withdraw
SSI benefits from ATMs outside the United States. Information we
obtained from a national financial data vendor indicates that it is now
possible for authorized users to obtain detailed information on
individuals' financial transactions from a large number of national and
international institutions. Such data sources include basic information
such as bank account balances from banks in the United States, as well
as more sophisticated information such as ATM activity that is
transmitted on the international telecommunications networks. Our
review suggests that such data could provide SSA with a potentially
powerful tool to identify residency violations. For example, SSA may be
able to obtain data for recipients whose SSI benefits are direct
deposited into a U.S. bank and then withdrawn from ATMs outside the
country for extended periods of time. However, SSA does not currently
plan to obtain access to direct deposit data from financial
institutions or ATM networks that operate in other countries.
Conclusions:
SSA has made progress in addressing residency violations in recent
years, especially through the special initiatives it has undertaken.
However, many of these initiatives have been short-lived and limited to
a small number of field offices. Thus, the agency's approach to this
problem has been generally ad hoc and restricted in scope. As a result,
our review suggests that SSA identifies only a portion of the
violations and resulting overpayments that occur each year. We
recognize that the SSI program is complex to administer and residency
requirements are particularly difficult to enforce because they can
necessitate time-consuming, labor-intensive verification checks, such
as home visits. However, SSA has not employed a systematic,
comprehensive approach to this problem that would allow the agency to
use its available systems and procedures more efficiently and reduce
the program's exposure to additional violations. In particular, SSA has
not reengineered its current systems and processes to make better use
of limited budgetary and staff resources. For example, our review shows
that minor modifications of its risk analysis system could help the
agency identify recipients who are most likely to violate residency
requirements. Without such modifications, however, it will be difficult
for the agency to effectively target its redetermination reviews and
incorporate home visits in a cost-effective manner.
Additionally, SSA has not made sufficient use of independent, third-
party data sources to help verify recipients' residency despite having
successfully used such tools to verify other aspects of recipient
eligibility, such as their income and other financial resources. SSA
could improve SSI program integrity and reduce residency overpayments
by exploring more creative use of technology, including the use of
financial institution data to detect recipients who use ATMs for bank
transactions outside the United States for extended periods of time.
The agency may also benefit from pursuing other emerging data sources
such as entry/exit systems being developed by the Departments of
Justice and Homeland Security, although prior problems we have
identified with immigration data may require SSA to determine the
reliability of such databases.
Ultimately, failure to implement a more strategic approach to this
problem and to reengineer its existing processes may compromise the
agency's ability to use its limited resources in the most cost-
effective manner. Moreover, failure to make optimal use of existing
tools and access emerging data sources could leave SSI and other
programs, such as Medicaid, vulnerable to continuing residency
violations and additional overpayments.
Recommendations:
In order to further strengthen and increase SSA's ability to detect SSI
residency violations and reduce resulting overpayments due to recipient
absences from the United States, we recommend that the Commissioner of
Social Security take the following actions:
* Consider reengineering the agency's risk analysis system to more
specifically target potential residency violators. The list of
potentially high-risk characteristics we have developed and tested
could provide a starting point for such refinements. To accomplish
this, SSA may wish to test the idea on a one-time basis using methods
the agency deems appropriate to assess its effectiveness.
* Consider expanding the use of unannounced home visits in some areas
as a way of verifying the residency of recipients whom the agency
identifies as potentially being at high risk for violations. To ensure
that only cases with a high potential for success are selected, any
potential profile of high-risk recipients that SSA develops could be a
primary source of referrals. To maximize limited staff resources, SSA
should apply a strategic approach to this problem, recognizing that
violations are not equally prevalent in all areas of the country.
* Study the feasibility of expanding the type of information SSA
obtains from financial institutions as authorized by The Foster Care
Independence Act of 1999 (Pub. L. No. 106-169). Additional information
to help identify violators could include bank and ATM withdrawal
records to help identify SSI recipients who may be accessing their SSI
benefits outside the United States for extended periods of time.
* Investigate the potential for obtaining access to emerging third-
party data sources such as entry/exit databases being developed by DHS
to help field staff more accurately verify whether SSI recipients are
violating program regulations.
Agency Comments and Our Evaluation:
We provided a draft of this report to SSA and DHS for review and
comment.[Footnote 29] SSA generally agreed with our recommendations,
but noted some challenges to their implementation.
While agreeing with each of our recommendations, SSA supplied
additional information concerning its ability to implement these
recommendations. With regard to our first recommendation to reengineer
its risk analysis system to more specifically target potential
residency violators, SSA agreed with the intent of the recommendation
but expressed concern that including individuals born outside the
United States as one risk factor could be considered discriminatory. As
noted in our report, we suggest that this factor could be included as
one of several different factors that the agency could use to refine
its risk analysis system. We believe that such an approach could be
implemented in a non-discriminatory manner and would help SSA use its
limited resources more efficiently. Moreover, as discussed in the
report, our analysis suggests that this factor is a potentially
powerful indicator of possible residency violations.
With regard to our second recommendation to expand the use of
unannounced home visits, SSA agreed that home visits are a useful tool
for verifying SSI recipients' residency, but noted that costs and
employee safety must be considered. We agree that these are important
issues that SSA must consider as it studies how home visits can be used
most effectively. Further, as we discuss in the report, some states
have successfully used state personnel and private investigators to
perform home visits. We also note that at least one state has found the
use of private investigators to be cost-effective. Thus, we believe
that SSA could look more closely at the experience of these states to
identify potential best practices for conducting home visits.
SSA also agreed with our third recommendation that the agency study the
feasibility of expanding the type of information it obtains from
financial institutions. SSA noted some potential legal and technical
issues that will require further study by the agency. For example, SSA
noted that financial records may not be an accurate basis for
identifying recipients who are outside the country for more than 30
days. While we agree that definitively determining whether a recipient
is outside the country for 30 consecutive days or more presents a
challenge for the agency, we only suggest that SSA could use financial
institution data as a potential indicator of residency violations.
Finally, with regard to our fourth recommendation, SSA agreed that
there may be potential benefits to accessing external data sources to
help verify recipients' residency. The agency indicated that it will
explore the potential feasibility of using such data sources as part of
its SSI Corrective Action Plan.
SSA's formal comments appear in appendix II. SSA also provided
additional technical comments that we have incorporated in the report,
as appropriate.
We are sending copies of this report to the House and Senate Committees
with oversight responsibility for the Social Security Administration.
We will also make copies available to other parties upon request. In
addition, the report will be available at no charge on GAO's Web site
at http//:www.gao.gov. If you have any questions concerning this
report, please contact me at (202) 512-7215.
Sincerely yours,
Robert E. Robertson
Director,
Education, Workforce, and Income Security Issues:
Signed by Robert E. Robertson:
[End of section]
Appendix I: Scope and Methodology:
This appendix provides additional details about our analysis of the
Supplemental Security Income program's (SSI) residency violations,
including potential weaknesses in the Social Security Administration's
(SSA) policies and procedures. To meet the objectives of this review,
we reviewed prior and ongoing projects by SSA and its Office of
Inspector General (OIG), conducted independent audit work, and reviewed
our prior work on the SSI program. We also reviewed SSA's policies and
SSI program guidelines concerning eligibility determinations and
procedures for detecting potential residency violations. In addition,
we analyzed SSI payment data between 1997 and 2001 and examined studies
in which SSA or its OIG identified recipients who were residing outside
the country. We reviewed our past work on the SSI program to evaluate
the current use of such tools as administrative sanctions and monetary
penalties. Finally, we interviewed SSA and OIG officials at its
headquarters in Baltimore, Maryland, and key regional and field
managers and staff responsible for administering and monitoring the SSI
program.
We conducted independent audit work in five states (California,
Florida, Michigan, New York, and Texas) to identify common residency
violation characteristics and examine SSA's processes to identify
residency violations. We selected locations for field visits based on
the following criteria: (1) geographic dispersion, (2) states
previously included in a SSA or OIG special initiative, (3) states with
large numbers of SSI recipients, (4) states with large dollars of SSI
expenditures, and (5) states with large numbers of noncitizen SSI
recipients. These states represented about 72 percent of the total
noncitizen population potentially eligible for SSI benefits, about 41
percent of the total SSI recipients, and 45 percent of total SSI
benefits paid in the United States. In total, we visited 17 field
offices and interviewed 112 SSA field office managers and line staff
responsible for the SSI program. We visited field offices more prone to
having recipients with residency violations, especially offices near
border crossings either by land, sea, or air. Where appropriate, we
also visited offices that were involved with a prior or ongoing SSA or
OIG special initiative to detect residency violations.
During our meetings with SSA and OIG officials, we documented
management and staff views on how extensive residency violations are in
the SSI program; the effectiveness of current procedures and processes
for detecting and preventing residency violations; and potential
improvements to existing program processes, policies, and systems. We
also interviewed certain state officials knowledgeable about or
involved with SSI residency verifications. In addition, we interviewed
officials from other federal agencies, including the former Immigration
and Naturalization Service, and the Centers for Medicare and Medicaid
Services (CMS) to determine how these agencies could assist SSA in
verifying recipients' residency. We also interviewed officials from a
national financial data vendor to obtain information on currently
available financial data. We conducted our work from September 2002
through May 2003 in accordance with generally accepted government
auditing standards.
As part of our study, we developed and tested a logistic regression
model to help predict whether certain SSI recipients were more likely
than others to have residency violations. The factors we used in our
model were recipients who (1) were born outside of the United States,
(2) have their SSI benefits direct deposited into bank accounts, (3)
use post office boxes to receive their mail, (4) have had a prior
residency violation, or (5) could not be located by SSA for an extended
period.[Footnote 30] In deciding which variables to include in our
regression analysis, we chose variables that were most frequently
reported to us by SSA and OIG staff during our fieldwork. Additional
potentially useful variables were also reported. (See table 1 for a
more comprehensive list of the variables cited.) This is a partial
listing of the factors reported to us; it does not include all
responses.[Footnote 31]
Table 1: Variables That Indicate a Recipient May Potentially Be Out of
the United States:
Variable: Recipients with prior residency violations.
Variable: Recipients who use direct deposit to receive their benefits.
Variable: Recipients receiving mail at a post office box or commercial
mail drop.
Variable: Recipients who were born outside of the United States.
Variable: Recipients who do not utilize their Medicaid benefits for an
extended period of time.
Variable: Recipients who SSA cannot locate or contact.
Variable: Recipients reporting different residential and mailing
addresses.
Variable: Recipients living with family or friends without their own
residency.
Variable: Aged recipients.
Variable: Multiple recipients using the same physical mailing address.
Variable: Recipients with immediate family in another country.
Variable: Recipients with excess resources or income.
Source: GAO analysis.
Note: Factors in table 1 include all responses where at least 10
percent of the total staff interviewed cited that a specific variable
would be a valid predicator that a recipient may be out of the country
and thus violating SSI residency requirements.
[End of table]
Our model resulted in estimates of the relative likelihood (odd ratios)
of a current residency violation depending on the absence or presence
of the included five variables (see table 2). If there is no
significant difference between the presence and the absence of one of
the variables, with respect to a current residency violation, the odds
would be approximately equal, and the ratio of the odds would be close
to 1.00. The more the odds ratio differs from 1.00 in either direction,
the larger the effect it represents. For example, if there were very
little difference between those beneficiaries who did and did not use
direct deposit, with respect to a current (as of Apr. 2003) residency
violation, the odds ratio for direct deposit would be close to 1.00.
Table 2: Odds Ratios for the Variables in Our Logistical Regression
Analysis:
All of the following odds ratios are statistically significant:
Variable: Recipients who were born outside of the United States.;
Odds ratio: 44.19; Interpretation: Recipients who were born outside of
the United States are approximately 44 times more likely to be
current residency violators.
Variable: Recipients who did use direct deposit to receive their
benefits; Odds ratio: 0.83; Interpretation: Recipients who did use
direct deposit to receive their benefits are 1.2 times less likely to
be current residency violators.[A].
Variable: Recipients receiving mail at a post office box; Odds ratio:
1.77; Interpretation: Recipients receiving mail at a post office
box are 1.8 times more likely to be current residency violators.
Variable: Recipients with prior residence violations; Odds ratio:
9.80; Interpretation: Recipients with prior residence
violations are about 10 times more likely to be current residency
violators.
Variable: Recipients who SSA cannot locate or contact; Odds ratio:
0.06; Interpretation: Recipients who SSA cannot locate or
contact are 17 times less likely to be current residency violators.[B].
Source: GAO's analysis of SSA data on residency violation.
[A] For odds rations that fall between 0 and 1, the reciprocal of the
odds ratio describes the odds of being less likely. Thus, the odds
ratio of 0.83 is interpreted as 1 divided by 0.83, which is
approximately 1.2 times less likely.
[B] Similarly, the reciprocal of 0.06 is approximately 17.
[End of table]
[End of section]
Appendix II: Comments from the Social Security Administration:
Note: GAO comments supplementing those in the report text appear at the
end of this appendix.
See comment 1.
See comment 2.
SOCIAL SECURITY:
The Commissioner:
June 27, 2003:
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: SSA Could Enhance Its Ability to Detect
Residency Violations," (GAO-03-724). Our comments on the report are
enclosed.
If you have any questions, please have your staff contact Trudy K.
Williams at (410) 965-0380.
Sincerely,
Jo Anne B. Barnhart:
Signed by Jo Anne B. Barnhart:
Enclosure:
SOCIAL SECURITY ADMINISTRATION BALTIMORE MD 21235-0001:
COMMENTS OF THE SOCIAL SECURITY ADMINISTRATION (SSA) ON THE GENERAL
ACCOUNTING OFFICE (GAO) DRAFT REPORT, "SUPPLEMENTAL SECURITY INCOME:
SSA COULD ENHANCE ITS ABILITY TO DETECT RESIDENCY VIOLATIONS" (GAO-03-
724):
Thank you for the opportunity to review and comment on the subject
draft report. As requested, below are our comments.
The report recommends that the Agency consider reengineering its risk
analysis system to more specifically target potential violators of the
residency and presence rules. One of the factors GAO tested and now
recommends targeting is birth outside of the U.S. We commented on a
similar recommendation to integrate foreign-born status into the
redetermination case selection process as one of several high-risk
factors in the Office of the Inspector General (OIG) report,
"Effectiveness of the Social Security Administration's Special Project
Reviews of Supplemental Security Income Recipients"A-09-99-62010. In
our comments to the OIG, we cautioned that such profiling may not
withstand an equal protection challenge.
Recommendation 1:
SSA should consider reengineering the Agency's risk analysis system to
more specifically target potential residency violators. The list of
potentially high-risk characteristics we have developed and tested
could provide a starting point for such refinements. To accomplish
this, SSA may wish to test the idea on a one-time basis using methods
the Agency deems appropriate to assess its effectiveness.
Comment:
We agree with the recommendation's intent to refine SSA's risk analysis
system to better target redetermination selections.
We conducted a study in 1997 in Southern California, where the primary
suspicious characteristic was "born outside the U.S." Although this
would seem to be an appropriate choice for any list of conspicuous
characteristics, at the conclusion of the 1997 study, it was determined
that using national origin, particularly for recipients that are now
citizens, could be considered discriminatory. We, therefore, chose to
discount use of national origin as a high-risk characteristic.
The current SSI redetermination profiling system uses the existence of
prior SSI nonpayment codes (absence from the U.S. and/or excess
resources), along with other factors in selecting cases for
redeterminations. Our experience has been that the two nonpayment codes
have proven to be as effective an indicator of absence from the U.S. as
"born outside the U.S.":
Recommendation 2:
SSA should consider expanding the use of unannounced home visits in
some areas as a way of verifying the residency of recipients whom the
Agency identifies as potentially being at high-risk for violations. To
ensure that only cases with a high potential for success are selected,
any potential profile of high-risk recipients that SSA develops could
be a primary source of referrals. To maximize limited staff resources,
SSA should apply a strategic approach to this program, recognizing that
violations are not equally prevalent in all areas of the country.
Comment:
We agree that unannounced home visits could assist SSA in detecting SSI
residency violators. However, when we conducted the 1997 Southern
California study, SSA employees were not sent on unannounced visits
because of the expectation of potentially dangerous situations.
Instead, a number of private detective agencies were contracted to
conduct these potentially confrontational interactions. The private
detective agencies identified a number of instances where the SSI
recipients were not residing at the U.S. address where their payments
were being sent and the recipients were found to be outside the U.S.
Any thoughts of using SSA employees to conduct future unannounced
visits must include strong considerations of employee safety. In
addition, as GAO emphasized, these visits would require significant
resources and increased funding.
Recommendation 3:
SSA should study the feasibility of expanding the type of information
SSA obtains from financial institutions as authorized by The Foster
Care Independence Act of 1999
(Pub. L. No. 106-169). Additional information to help identify
violators could include bank and ATM withdrawal records to help
identify SSI recipients who may be accessing their SSI benefits outside
the United States for extended periods of time.
Comment:
We agree. As part of our overall effort to improve the integrity of the
SSI program, we will explore the feasibility of expanding the type of
information SSA obtains from financial institutions. The recommendation
to identify SSI residency violators by accessing financial data seems
to be a valid method to help prevent overpayments. We do, however,
recognize that there are several unresolved legal, technological, and
cost issues. Thus, we would need to further study the feasibility of
the recommendation. We have identified below some of the unresolved
issues involved with the recommendation:
* It is not clear whether Section 213 of the Foster Care Independence
Act of 1999 allows SSA to access ATM transactions or any type of
international financial information.
* The report refers to the fact that auditors were told by a vendor
that detailed information on an individual's financial transactions can
be obtained. That vendor is not identified. Section 213 only allows SSA
to obtain financial information from the
financial institution itself. Information compiled by a third party
cannot be used to deny or suspend SSI benefits. Further information is
needed such as who the vendor is and how the information is obtained.
* The report indicates that financial data exists that could help SSA
detect residency violations; however, it is not clear how the Agency
could establish a system that would be cost effective. Depending on how
it is designed, the process could have a huge workload impact on our
Operations component.
There are also unresolved program policy issues with this
recommendation. For example, SSI benefits cannot be suspended unless
the SSI recipient is outside the U.S. for 30 consecutive days or more.
This could create significant problems when trying to establish
residency by using financial records. For example, if a recipient has a
joint checking account, (i.e., with a non-eligible spouse) the non-
recipient could potentially travel outside the U.S. for an extended
period and access the account via an ATM machine. Additionally, it is
certainly conceivable that an individual living along the U.S. border
could travel outside the U.S. on a consistent basis for less than 30
days in duration while accessing their account in the foreign country.
In both of these scenarios, an alert would be generated yet the
recipient would not be ineligible.
SSA has identified a vendor to develop a proof of concept (POC) test to
explore the feasibility of electronic verification of bank accounts to
address unreported financial resources. At the conclusion of the POC
phase, a decision will be made on whether to proceed to the fully-
developed phase which would include systems development to automate the
account verification and reimbursement processes to the financial
institutions and nationwide expansion of the project.
GAO does not establish a correlation between a recipient's use of a
bank account and avoidance of residency violations. In fact, GAO
appears to indicate just the opposite with its conclusion that,
"Recipients who did use direct deposit to receive their benefits are
1.2 times less likely to be current residency violators." Without the
establishment of a link indicating that a recipient's use of a bank
account is a contributing factor to residency violation, there is no
support from a return on investment perspective to justify conducting a
feasibility study as recommended in the report.
While this recommendation would be helpful, ATM and bank activity by
itself cannot be considered as prima facie proof that a recipient is,
in fact, outside the U.S. Nevertheless, it would be valuable as an
indicator of a potential problem.
Recommendation 4:
SSA should investigate the potential for obtaining access to emerging
third-party data sources such as entry/exit databases being developed
by the Department of Homeland Security to help field staff more
accurately verify whether SSI recipients are violating program
regulations.
Comment:
We agree that there may be potential benefits to accessing external
data sources. We have already had some discussions with some external
sources and will explore the feasibility of using such sources as part
of our SSI Corrective Action Plan.
We have not had discussions with the Department of Homeland Security
(DHS) concerning possible uses of its entry/exit database for SSA
purposes as it is still in the development stages. We do know, however,
that there are some limitations to the usability of certain data files.
Historically, the problem SSA has faced with obtaining third party data
is that many other data sources do not use Social Security numbers
(SSN), which makes data linkage difficult or impossible. Such is the
case with the developing DHS entry/exit database. While the DHS entry/
exit database will collect information that could be useful to SSA in
detecting residency fraud, there are no plans to use SSNs as one of the
identifiers.
As GAO mentioned on page 21 of its report, SSA has recently concluded a
computer matching agreement to permit the automated exchange of
deportation and departure data. With these data, SSA will be able to
better enforce the provisions in the SSI program that prohibit payments
to persons who are absent from the United States for a full month or
more. We hope to begin matching with the deportation records of the
Department of Justice in 2004.
GAO Comments:
The following are GAO's comments on SSA's letter dated June 27, 2003.
1. Based on our analysis, we continue to believe that this factor--
recipients born outside the United States--is a good indicator of a
potential residency violation. Use of this factor may help SSA further
refine its risk analysis system (see report page 18).
2. Our report does not state that direct deposit is a good indicator of
a residency violation. Rather, we discuss the potential use of
financial institution data such as recipients' banking transactions
outside the United States using automated teller machines, which is
currently unavailable to SSA (see report page 22).
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Daniel Bertoni (202) 512-5988 Jeremy D. Cox (202) 512-5717:
Staff Acknowledgments:
In addition to those named above, Jeff Bernstein, Sue Bernstein, Kriti
Bhandari, Salvatore F. Sorbello, Vanessa Taylor, Wendy Turenne, and
Shana Wallace made important contributions to this report.
[End of section]
Related GAO Products:
Supplemental Security Income: Progress Made in Detecting and Recovering
Overpayments, but Management Attention Should Continue. GAO-02-849.
Washington, D.C.: September 16, 2002.
Supplemental Security Income: Status of Efforts to Improve Overpayment
Detection and Recovery. GAO-02-962T. Washington, D.C.: July 25, 2002.
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.
Supplemental Security Income: Opportunities Exist for Improving Payment
Accuracy. GAO/HEHS-98-75. Washington, D.C.: March 27, 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.
FOOTNOTES
[1] This figure includes $30 billion in federal funds and $4.7 billion
in state funded supplemental funds.
[2] In a 1999 report, we estimated that the combined federal cost for
SSI and Medicaid benefits is $122,000 per recipient over the next 10
years. U.S. General Accounting Office, Supplemental Security Income:
Additional Actions Needed to Reduce Program Vulnerability to Fraud and
Abuse, GAO/HEHS-99-151 (Washington, D.C.: Sept. 15, 1999).
[3] In 2001, outstanding SSI debt and newly detected overpayments for
the year totaled $4.7 billion.
[4] For SSI eligibility purposes, the United States is defined as one
of the 50 states, the District of Columbia, and the Northern Mariana
Islands. Residents of Puerto Rico are not eligible for SSI.
[5] For purposes of this report, we do not distinguish between two
related statutory requirements for SSI eligibility--presence in the
United States and United States residence. The presence requirement
states that a recipient is not eligible for SSI if the recipient is
outside the country for 30 consecutive days or more. However, a
recipient may retain eligibility if they are temporarily outside the
country for less than 30 consecutive days. The residency requirement
states that an individual must establish a dwelling in the United
States with the intent to continue to live in the country. The rules
for determining whether an individual meets the physical presence
requirement are outlined at 20 C.F.R. § 416.215 and § 416.1327. The
rules for determining whether an individual meets the residency
requirement are outlined at 20 C.F.R. § 416.202(b), § 416.1329, and §
416.1603.
[6] The INS is currently being divided into three separate bureaus
within the Department of Homeland Security.
[7] We use the term "risk analysis system" to describe SSA's
statistical redetermination profiling system used to identify SSI
recipients who are more likely to incur overpayments.
[8] SSA reported about $13.7 and $15.5 million in residency
overpayments for 1995 and 1996, respectively. However, the 1995 and
1996 total dollars of residency overpayments were reported on a fiscal
year basis. SSA reported overpayment data for 1997 to 2001 on a
calendar year basis for our report. While a direct comparison cannot be
made because of differences in reporting periods, the data show that
residency overpayments have been increasing over time.
[9] The rationale for targeting these cases was that financially needy
individuals who were aged or disabled are likely to use Medicaid
services on a regular basis. Thus, SSI recipients who have not used
Medicaid for long periods of time may have left the United States or
died.
[10] These studies considered the effect of only one potential
indicator on residency violations--Medicaid nonutilization.
[11] The percentage of total residency overpayments attributed to
recipients born outside of the United States may be higher than 87
percent because SSA could not identify a specific country of birth for
recipients that represent about $10 million in SSI overpayments.
[12] This figure represents data from fiscal years 1991 through 1995.
[13] 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).
[14] SSI program guidance allows field staff to use home visits in
selected circumstances, such as in response to a report from a third
party that a recipient is outside the United States. In addition, home
visits may be employed if a recipient fails to provide information
requested by SSA staff, or if a recipient does not respond to letters
and/or telephone calls from staff asking them to appear at the local
office. However, program guidelines give field office managers
discretion in determining when to use home visits and allow them to
take into consideration factors such as the safety of staff who perform
such visits.
[15] SSA's risk analysis system incorporates about 48 different
characteristics--or variables--to help the agency determine which
recipients will be selected for annual redetermination reviews.
Recipients identified as being at higher risk for overpayments are
designated as high error profile cases and may be subject to more
frequent reviews that entail personal contact with SSA field office
staff. Those recipients identified as being less likely to incur an
overpayment are designated as medium or low error profile and may only
receive a redetermination conducted by mail rather than in person. Some
low error profile cases are only examined once every 6 years.
[16] The variables used in our model are not an exhaustive list of
potential variables that SSA could use in its risk analysis system.
They represent just a few of the characteristics that were frequently
cited by prior reviews as well as SSA and OIG staff as potentially good
predictors of residency violations.
[17] Another variable frequently cited as a potential indicator of
residency violations--Medicaid nonutilization--was not included in our
model because SSA does not currently have automated data on Medicaid
nonusage by SSI recipients. However, SSA is negotiating access to such
data with the Centers for Medicare and Medicaid Services.
[18] SSI recipients with residency violations were compared against
recipients with no violations.
[19] SSA 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
redetermination reviews would yield hundreds of millions of dollars in
additional overpayment benefits annually. U.S. General Accounting
Office, Supplemental Security Income: Progress Made in Detecting and
Recovering Overpayments, but Management Attention Should Continue,
GAO-02-849 (Washington, D.C.: Sept. 6, 2002).
[20] Prior GAO reports indicate that monetary penalties and
administrative sanctions may be underutilized in the SSI program.
GAO-02-849.
[21] See GAO-02-849.
[22] Ibid.
[23] Ibid.
[24] For example, SSA routinely uses information from the Department of
Health and Human Service's National Directory of New Hires to verify
SSI recipients' income.
[25] SSA expects to save approximately $28 million annually by
implementing these matches and suspending benefits for recipients who
are identified.
[26] A new system called the United States Visitor and Immigrant Status
Indication Technology system is currently being developed by DHS and
will incorporate existing entry-exit databases.
[27] U.S. General Accounting Office, Illegal Immigration: INS Overstay
Estimation Methods Need Improvement,GAO/PEMD-95-20 (Washington, D.C.:
Sept. 26, 1995) and Immigration Statistics: Information Gaps, Quality
Issues Limit Utility of Federal Data to Policymakers, GAO/GGD-98-164
(Washington, D.C.: July 31, 1998).
[28] See Access to Information Held by Financial Institutions, 67 Fed.
Reg. 22021 (to be codified at 20 C.F.R. pt. 416) (proposed May 2,
2002).
[29] DHS did not provide formal comments.
[30] An additional variable cited frequently by staff as a potentially
effective tool to identify residency violations--Medicaid
nonutilization information--was not included in our model because SSA
does not currently have automated data on Medicaid nonusage by SSI
recipients. However, SSA is currently negotiating access to such data
with the CMS.
[31] In a prior study, SSA's OIG identified several factors as
potential indicators that a recipient may be violating the SSI
residency requirements. These factors include: (1) age when a recipient
applies for SSI, (2) sex, (3) disability status, (4) citizenship, (5)
use of commercial mailboxes, (6) excess resources or income, (7)
questionable addresses, (8) failure to provide sufficient evidence to
SSA staff, (9) lack of an in-person benefit review for an extended
period of time, (10) direct deposit of benefits, (11) prior address
changes, (12) residential address that differs from a recipients'
mailing address, and (13) living in another person's household. The OIG
noted that more than half of residency violators exhibited four or more
of these characteristics.
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