THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
By conducting independent and objective audits, evaluations and investigations, we inspire public confidence in the integrity and security of SSA's programs and operations and protect them against fraud, waste and abuse. We provide timely, useful and reliable information and advice to Administration officials, Congress and the public.
The Inspector General Act created independent audit and investigative units, called the Office of Inspector General (OIG). The mission of the OIG, as spelled out in the Act, is to:
Conduct and supervise independent and objective audits and investigations
relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.
To ensure objectivity, the IG Act empowers the IG with:
Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.
We strive for continual improvement in SSA's programs, operations and management by proactively seeking new ways to prevent and deter fraud, waste and abuse. We commit to integrity and excellence by supporting an environment that provides a valuable public service while encouraging employee development and retention and fostering diversity and innovation.
Date: April 23, 2008
To: The Commissioner
From: Inspector General
Subject: Organizational Representative Payees Reporting Beneficiaries' Deaths
Our objective was to determine whether organizational representative payees promptly notified the Social Security Administration (SSA) when beneficiaries in their care died.
SSA pays retirement, disability or survivor benefits to eligible individuals under Title II of the Social Security Act. For individuals who are not able to manage or direct the management of their finances because of their age or mental and/or physical impairments, Congress granted SSA the authority to appoint representative payees to receive and manage the benefit payments on the beneficiary's behalf. A representative payee may be an individual or an organization. As of December 2005, approximately 5.1 million Title II beneficiaries had representative payees.
Organizational representative payees are responsible for notifying SSA of any
events that occur that may affect a beneficiary's entitlement to benefits-including
the death of a beneficiary. Any benefit payments issued to the organizations
after the beneficiaries' deaths are considered overpayments. Further, section
201 of the Foster
Care Independence Act of 1999 gave SSA the authority to hold representative payees liable for the repayment of the overpayments. Therefore, SSA will pursue recovery from the organizational payees.
The Social Security Protection Act of 2004 requires that SSA expand its monitoring activities of certain representative payees, including organizational payees representing 50 or more beneficiaries (also referred to as volume payees) and all payees authorized to collect a fee for service (FFS). SSA's payee monitoring program calls for reviews of all volume payees, FFS payees and State mental institutions at least once every 3 years. In addition, the Agency also selects a random sample of payees not scheduled for a triennial site review in that year. SSA also conducts targeted reviews as needed (regardless of the number of beneficiaries served by the payee) in response to events that may raise concerns about a payee's performance or suitability. Payee reviews include meetings with representatives from the organizations, assessments of the payees' recordkeeping, and interviews with the beneficiaries. (For additional information on SSA's representative payee monitoring activities, see Appendix B.)
To accomplish our objective, we identified 139 organizational representative payees-from 1 of 20 Social Security number segments-that received 3 or more benefit payments after the deaths of 149 beneficiaries. We selected all 139 organizations for detailed analysis. (For more information on our scope, methodology and estimation results, see Appendix C.)
RESULTS OF REVIEW
We found that organizational representative payees did not always timely notify SSA when beneficiaries in their care died and, as a result, benefits continued to be issued after deaths. In addition, organizational payees did not always return all of the benefits that were paid after the deaths of beneficiaries. Based on our review, we estimate the Agency paid about 2,780 organizational payees approximately $10 million in benefits after the deaths of about 2,980 beneficiaries. Of this amount, we estimate the Agency discontinued efforts to recover about $901,040 that was paid to approximately 480 organizations. Furthermore, we found that the Agency did not always address outstanding overpayments when organizational payee reviews were conducted.
PAYMENTS ISSUED AFTER DEATH
We found that the 139 organizational representative payees-from the 1 Social
Security number segment we reviewed-received $499,253 after the deaths of 149
beneficiaries. As of December 2007, SSA
successfully recovered $426,773 (86 percent) from the organizations;
was actively pursuing recovery of $26,982 (5 percent); and
was unsuccessful in recovering $45,498 (9 percent) that was incorrectly paid to the organizations.
The 149 deceased beneficiaries in our review continued to be paid between 3 and 22 months after their deaths, with an average of 5 months. The table below summarizes the 149 beneficiaries by the number of monthly payments issued after death.
Number of Months Paid After Death Number of Beneficiaries Percent
3 to 6 months 120 80%
7 to 10 months 21 14%
11 to 14 months 4 3%
15 to 18 months 3 2%
19 to 22 months 1 1%
Total 149 100%
Funds Recovered or Active Recovery Efforts
SSA successfully recovered $426,773 from the organizations. In addition, the Agency was actively pursuing recovery of $26,982 through repayment agreements and by issuing billing notices to the organizations. Of this amount, SSA resumed recovery of $12,734 due to our audit. For example, one organization was issued seven benefit checks from May 2003 to November 2003 totaling $4,640 after the death of a beneficiary. The organization initially agreed to repay the overpayment but only returned $1,630 to SSA. Based on our audit, SSA resumed recovery of the $3,010 overpayment balance not refunded by the organization.
Recovery Efforts Unsuccessful
SSA did not recover $45,498 that was paid to organizational payees after the deaths of beneficiaries. The Agency wrote off $446 that was paid to 2 organizations, but was unsuccessful in recovering the remaining $45,052 that was incorrectly paid to 24 of the organizations in our review.
For example, one organization was issued three benefit checks totaling $2,256 after a beneficiary died in November 2003 but only returned $630 to SSA. The Agency sent several notices to the organization requesting remittance of the additional $1,626 that was issued after death. However, no further payments were remitted to SSA as of December 2007.
In addition, we found that 22 of the 24 organizations continued to serve as representative payees for other beneficiaries as of December 2007. According to SSA, a representative payee that does not return all payments issued after death may not be a suitable payee and should not be appointed unless there is no other suitable applicant and the debt has been satisfied. These facilities may not have adequate controls over the funds they receive, or they may not be sufficiently involved with the beneficiaries in their care to ensure their needs are met.
REPRESENTATIVE PAYEE MONITORING
Of the 139 organizations in our review, we identified 76 that did not timely
report the deaths of multiple beneficiaries in their care and/or did not return
funds that were incorrectly paid after death-despite SSA's attempts to recover
the benefits. We researched available data on SSA's systems and contacted Agency
personnel to determine whether reviews of these 76 organizations were conducted
under SSA's representative payee monitoring program. Of the 76 organizations,
we found that
reviews were conducted for 43 organizations;
reviews were scheduled in the future for 8 organizations; and
no reviews were conducted or scheduled for the remaining 25 organizations.
Monitoring Reviews Conducted or Scheduled
In total, 43 of the 76 organizations were reviewed by SSA. Of these 43 organizations, 12 had outstanding overpayments (resulting from benefit payments issued after death) at the time their reviews were conducted. However, SSA's policy does not require that outstanding overpayments owed by organizational payees be addressed when monitoring reviews are conducted. As a result, SSA personnel did not address the outstanding overpayments for these 12 organizations during its reviews.
For example, one organization had an outstanding overpayment totaling $1,412 due to the death of a beneficiary in 2002. SSA conducted a review of this organization in July 2007 but did not address the outstanding overpayment. As of December 2007, the funds were not returned to SSA, and this organization continued to serve as payee for 40 beneficiaries.
SSA planned to conduct reviews in the future for eight organizations. However, the dates of these future reviews ranged from May 2008 to March 2010. For example, the review of one organization was not scheduled until August 2008 even though the organization had reported multiple deaths late and had an outstanding overpayment totaling $1,448 due to the death of a beneficiary in 2003. As of December 2007, the funds were not returned to SSA.
Organizations Not Covered Under SSA's Monitoring Program
No reviews were conducted or scheduled for 25 organizations. For 22 of these organizations, we found that the organizations represented fewer than 50 beneficiaries-and therefore did not fall under SSA's monitoring program. However, SSA also conducts targeted reviews as needed (regardless of the number of beneficiaries served by the payee) in response to events that may raise questions about a payee's performance or suitability. According to SSA, representative payees with outstanding overpayments resulting from payments issued after death may not be suitable payees. We found that no targeted reviews were conducted or scheduled for these 22 organizations. The table below summarizes the number of beneficiaries that were served by these 22 organizations as of December 2007.
Number of Beneficiaries Served Number of Organizations Percent
1 to 9 beneficiaries 3 14%
10 to 19 beneficiaries 4 18%
20 to 29 beneficiaries 8 36%
30 to 39 beneficiaries 3 14%
40 to 49 beneficiaries 4 18%
Total 22 100%
CONCLUSION AND RECOMMENDATIONS
Organizational representative payees did not always timely notify SSA when beneficiaries in their care died, and as a result, benefits continued to be issued for an average of 5 months after death. In addition, we found that organizational payees did not always return all of the benefits that were paid after death, even though the funds were no longer needed to care for the beneficiaries. We estimate that, as of December 2007, SSA was actively pursuing recovery of approximately $539,640 that was paid to about 200 organizational payees after the beneficiaries died. However, we estimate the Agency discontinued recovery efforts for an additional $901,040 that was paid to about 480 organizations. Furthermore, we found that SSA did not always address outstanding overpayments when organizational payee reviews were conducted. Therefore, we recommend SSA:
1. Continue to pursue recovery of any outstanding overpayments to organizational representative payees that resulted from benefits issued to the organizations after beneficiaries' deaths.
2. Require that outstanding overpayments owed by organizational payees are addressed when monitoring reviews are conducted.
3. Conduct reviews for the 8 volume payees-and the 22 other organizations which represented less than 50 beneficiaries-to ensure the payees are performing their duties satisfactorily.
SSA agreed with the recommendations. (See Appendix D.)
Patrick P. O'Carroll, Jr.
APPENDIX A - Acronyms
APPENDIX B - Representative Payee Monitoring
APPENDIX C - Scope, Methodology and Estimation Results
APPENDIX D - Agency Comments
APPENDIX E - OIG Contacts and Staff Acknowledgments
C.F.R. Code of Federal Regulations
FFS Fee for Service
POMS Program Operations Manual System
Pub. L. No. Public Law Number
SSA Social Security Administration
U.S.C. United States Code
Representative Payee Monitoring
For individuals who are not able to manage or direct the management of their finances because of their age or mental and/or physical impairments, Congress granted the Social Security Administration (SSA) the authority to appoint representative payees to receive and manage the benefit payments on the beneficiary's behalf. A payee may be an individual or an organization.
Once representative payees are appointed, SSA monitors their performance to ensure the payees are performing their duties satisfactorily. In assessing the performance of a payee, SSA looks for indications that a payee is not performing its duties adequately.
Often when SSA discovers that a payee is performing poorly, SSA can help the payee correct the poor performance by reacquainting the payee with the duties and responsibilities of a payee, including the need to keep adequate records. Other times, the poor performance requires the removal of a representative payee.
Most representative payees are monitored through SSA's annual accounting process. This process requires that representative payees submit accounting forms annually. These forms allow SSA to monitor how the payee spent and/or saved benefits on a beneficiary's behalf-and also to identify situations where the representative payee is no longer suitable.
In addition to monitoring payee performance through the annual accounting process, the Social Security Protection Act of 2004 required SSA to expand its monitoring activities to include periodic onsite reviews of certain representative payees. Specifically, the legislation required SSA to expand its monitoring activities of all payees authorized to collect a fee for service (FFS), organizational payees representing 50 or more beneficiaries (or volume payees), and individual payees representing 15 or more beneficiaries.
REPRESENTATIVE PAYEE REVIEWS
SSA's representative payee monitoring program includes the following reviews.
Triennial Site Reviews. At least once every 3 years, SSA monitors the performance of volume and FFS payees through a face-to-face meeting with the payee and an examination of beneficiary records. The review also includes an assessment of the payee's recordkeeping and includes interviews with beneficiaries.
Random Reviews. Each year, SSA selects a sample of 15 percent of volume and FFS payees that are not scheduled for a triennial site review in that year. These reviews are an SSA initiative. SSA examines selected beneficiary records to determine the payee's compliance with representative payment policies and procedures.
The review also includes beneficiary interviews.
Targeted Reviews. SSA conducts targeted reviews as needed in response to an event that may raise a question about the payee's performance or suitability. Examples of events that may trigger a targeted review include allegations of misuse or improper use of benefits from a beneficiary or third party, failure to pay a vendor, reports of employee theft, adverse media coverage, and investigation of the payee by another governmental agency.
State Onsite Reviews. SSA conducts triennial reviews of State mental institutions under its Onsite Review Program. These reviews evaluate the fiduciary performance of State mental institutions serving as representative payees for SSA beneficiaries.
Educational Visits. SSA conducts educational visits with new FFS payees 6 months after they are authorized to collect a fee. The objective of the educational visit is to ensure that new payees fully understand their responsibilities. Educational visits are also made for other types of payees. For example, an educational visit may be made to a volume payee if SSA learns the payee had changes in key personnel.
ADDITIONAL MONITORING ACTIVITIES
To assist in the monitoring of organizational representative payees, SSA:
Created a training kit for organizational representative payees.
Provided SSA field personnel with updated instructions to assist in conducting more thorough reviews.
Revised the annual accounting forms used for FFS and organizational payees to detect those incorrectly charging a FFS.
Contracted with accounting firms to assist in some reviews of payees that serve a large number of beneficiaries, have complex record systems, or are suspected of misuse.
Produced training videos for representative payees on best recordkeeping practices and for SSA staff on reviewing payee records.
Scope, Methodology and Estimation Results
To accomplish our objective, we:
Reviewed applicable sections of the Social Security Act, and Social Security Administration (SSA) regulations, policies and procedures.
Obtained a file of Title II beneficiaries from 1 of 20 Social Security number segments whose benefits were sent to organizational representative payees and who died between January 2000 and May 2006.
Identified 139 organizational representative payees that received 3 or more benefit payments after the deaths of 149 beneficiaries. For all 139 cases, we analyzed information available on the Agency's systems and requested the assistance of SSA's Office of Operations to determine whether
organizational representative payees promptly notified SSA when beneficiaries in their care died;
benefit payments issued after the beneficiaries' deaths were properly recorded and recovered; and
the Agency conducted reviews of organizational representative payees that reported multiple deaths late and/or failed to return all payments issued after death.
We performed our audit between February and December 2007 in Boston, Massachusetts. We tested the data obtained for our audit and determined them to be sufficiently reliable to meet our objective. The principal entities audited were SSA's field offices and program service centers under the Deputy Commissioner for Operations.
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.
Table 1 - Beneficiaries Results in
1 Segment Estimate to
Number of beneficiaries whose deaths were not reported timely to SSA by their organizational representative payees 149 2,980
Table 2 - Amounts Paid After Beneficiaries' Deaths Results in
1 Segment Estimate to
SSA discontinued recovery efforts $45,052 $901,040
SSA was actively pursuing recovery $26,982 $539,640
SSA wrote off $446 $8,920
Sub-Total: Benefits Not Returned to SSA $72,480 $1,449,600
SSA successfully recovered $426,773 $8,535,460
Total: All Benefits Paid After Beneficiaries' Deaths $499,253 $9,985,060
Results as of December 2007.
Table 3 - Organizations Results in
1 Segment Estimate to
Number of organizations that did not timely report beneficiaries' deaths to SSA 139 2,780
Number of organizations for which SSA was actively pursuing recovery 10 200
Number of organizations for which SSA discontinued recovery efforts2 24 480
Results as of December 2007.
Date: April 04, 2008
To: Patrick P. O'Carroll, Jr.
From: David V. Foster
Chief of Staff
Subject: Office of the Inspector General (OIG) Draft Report, "Organizational Representative Payees Reporting Beneficiaries' Deaths" (A-01-06-15068)-INFORMATION
We appreciate OIG's efforts in conducting this review. Our comments on the recommendations are attached.
Please let me know if we can be of further assistance. Staff inquiries may be directed to Ms. Candace Skurnik, Director, Audit Management and Liaison Staff, at (410) 965-4636.
COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL (OIG) DRAFT REPORT, "ORGANIZATIONAL REPRESENTATIVE PAYEES REPORTING BENEFICIARIES' DEATHS" (A-01-06-15068)
Thank you for the opportunity to review and provide comments on this draft report.
Continue to pursue recovery of any outstanding overpayments to organizational representative payees that resulted from benefits issued to the organizations after beneficiaries' deaths.
We agree. We will continue to follow-up with the organizational payees to recover debts owed to us.
Require that outstanding overpayments owed by organizational payees are addressed when monitoring reviews are conducted.
We agree. We believe the current policy instructions, contained in Program Operations Manual System GN 00605.421 and GN 00605.420C.14e, provide sufficient guidance for reviewers regarding the identification and review of overpayments made to payees due to the death of a beneficiary. We will determine the best way to ensure that employees identify overpayments at the time of site reviews, and we will either clarify our current instructions or issue additional guidance to our field offices and site reviewers.
Conduct reviews for the 8 volume payees-and the 22 other organizations which represented less than 50 beneficiaries-to ensure the payees are performing their duties satisfactorily.
We agree. This workload has already been sent to the respective regions for handling.
OIG Contacts and Staff Acknowledgments
Judith Oliveira, Director, Boston Audit Division, (617) 565-1765
Jeffrey Brown, Audit Manager, (617) 565-1814
In addition to those named above:
Kevin Joyce, IT Specialist
Melinda Tabicas, Senior Auditor
Toni Paquette, Program Analyst
For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig or contact the Office of the Inspector General's Public Affairs Specialist at (410) 965-3218. Refer to Common Identification Number A-01-06-15068.
Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit (OA), Office of Investigations (OI), Office of the Chief Counsel to the Inspector General (OCCIG), Office of External Relations (OER), and Office of Technology and Resource Management (OTRM). To ensure compliance with policies and procedures, internal controls, and professional standards, the OIG also has a comprehensive Professional Responsibility and Quality Assurance program.
Office of Audit
OA conducts financial and performance audits of the Social Security Administration's (SSA) programs and operations and makes recommendations to ensure program objectives are achieved effectively and efficiently. Financial audits assess whether SSA's financial statements fairly present SSA's financial position, results of operations, and cash flow. Performance audits review the economy, efficiency, and effectiveness of SSA's programs and operations. OA also conducts short-term management reviews and program evaluations on issues of concern to SSA, Congress, and the general public.
Office of Investigations
OI conducts investigations related to fraud, waste, abuse, and mismanagement in SSA programs and operations. This includes wrongdoing by applicants, beneficiaries, contractors, third parties, or SSA employees performing their official duties. This office serves as liaison to the Department of Justice on all matters relating to the investigation of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.
Office of the Chief Counsel to the Inspector General
OCCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCCIG also advises the IG on investigative procedures and techniques, as well as on legal implications and conclusions to be drawn from audit and investigative material. Also, OCCIG administers the Civil Monetary Penalty program.
Office of External Relations
OER manages OIG's external and public affairs programs, and serves as the principal advisor on news releases and in providing information to the various news reporting services. OER develops OIG's media and public information policies, directs OIG's external and public affairs programs, and serves as the primary contact for those seeking information about OIG. OER prepares OIG publications, speeches, and presentations to internal and external organizations, and responds to Congressional correspondence.
Office of Technology and Resource Management
OTRM supports OIG by providing information management and systems security. OTRM also coordinates OIG's budget, procurement, telecommunications, facilities, and human resources. In addition, OTRM is the focal point for OIG's strategic planning function, and the development and monitoring of performance measures. In addition, OTRM receives and assigns for action allegations of criminal and administrative violations of Social Security laws, identifies fugitives receiving benefit payments from SSA, and provides technological assistance to investigations.