Bond and Financial Credit Risk Requirements for Non-governmental Fee-for-Service Representative Payees

Date: 
Friday, March 28, 2014
Management Issue: 
Report Number: 
A-05-12-11225
Report Type: 
Audit Report
Office Affiliation: 

The Social Security Administration (SSA) requires that non-governmental representative payees who apply to collect a fee to serve five or more individuals obtain sufficient bond or insurance coverage and maintain appropriate State licensing. The amount of the bond must be sufficient to compensate the organization or SSA for any loss of SSA client benefits and conserved funds.

Additionally, SSA performs a financial credit risk review before authorizing a non-governmental organization to serve as a fee-for-service (FFS) payee to assess potential business risks involved in the organization’s current or future performance as a representative payee.

Once SSA allows an organization to collect fees, the Agency performs periodic reviews of the organization, including educational visits, annual re-certifications, and triennial reviews.

The objective of this report was to assess the Agency’s procedures to ensure non-governmental, FFS representative payees (1) maintained sufficient bond or insurance coverage and (2) underwent a financial credit risk review. We also assessed the training and support provided to regional and field office  employees responsible for this oversight.