SOCIAL SECURITY ADMINISTRATION
SUPPLEMENTAL SECURITY INCOME OVERPAYMENT NOTICES NOT SENT
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Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
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Access to all information necessary for the reviews.
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Date: August 30, 2010 Refer To:
To: The Commissioner
From: Inspector General
Subject: Supplemental Security Income Overpayment Notices Not Sent (A-01-09-19037)
Our objective was to assess the Social Security Administration's (SSA) efforts to recover overpayments from Supplemental Security Income (SSI) recipients.
In Fiscal Year 2009, SSA paid nearly 7.7 million SSI recipients over $48 billion in Federal benefits and State supplementary payments and identified approximately $4 billion in SSI overpayments. An overpayment is a payment made to an individual over a specific period where it is determined that more than the correct amount was paid. The Social Security Act indicates that when the recovery of an overpayment is determined to be appropriate, it must be made by adjustment of future payments to the individual or by recovery from such individual or his eligible spouse (or from the estate of either) after this determination.
SSA does not initiate recovery efforts until a notice of overpayment is issued to the recipient. Therefore, to maintain optimum effectiveness in recovering an overpayment, an overpayment notice should be sent to the individual as soon as possible.
Many overpayment notices are generated through the Automated Overpayment Notice System. Overpayment cases that are not processed through this System require a manually prepared notice.
To manage unresolved overpayment notices, a system-generated diary alert is used to flag cases to notify SSA that a manual overpayment notice needs to be sent. The diary system was designed to ensure individual records are current and accurate. SSA field offices are notified of a pending diary through a secure printer in the office. If no action is taken after a specified period, the case is put on a follow-up list. A database contains all monthly diary alerts sent to each field office. Development of the diary and necessary actions should be taken by the time the diary date is reached.
In our September 2003 audit, Assessment of the Supplemental Security Income Fugitive Felon Project (A 01 03 23070), we identified 23 individuals with overpayments totaling approximately $85,800 for which SSA had not initiated recovery efforts.
To determine the extent of this issue nationwide, we identified approximately 12,500 SSI recipients—as of October 2009—who did not appear to have been sent an overpayment notice. From this information, we determined that 200 individuals were currently receiving SSI payments from which SSA had not initiated overpayment recovery efforts. (See Appendix B for information on our scope and methodology.)
RESULTS OF REVIEW
Of the 200 SSI recipients in our population, 91 were not sent overpayment notices. Without these notices, SSA was unable to initiate recovery of $218,536.
Specifically, for the 200 cases reviewed,
• 91 had no overpayment notice sent,
• 49 were pending further action on the overpayment(s),
• 43 had an overpayment notice issued recently, and
• 17 had an overpayment(s) not considered collectable by SSA.
OVERPAYMENT NOTICES NEVER SENT
Of the 200 cases we initially identified, 91 (46 percent) required a notice to be sent for overpayments totaling $218,536. As of June 2010, 13 cases, totaling $8,333, were still waiting for overpayment notices to be sent. The age range of these overpayments is shown in Table 1.
Table 1: Age of Overpayments
Age Number of Cases Overpayment Amount Percent
More than 5 years 3 $21,012 3%
4 to 5 years 1 $252 1%
3 to 4 years 9 $28,191 10%
2 to 3 years 17 $61,353 19%
1 to 2 years 57 $102,793 63%
1 year or less 4 $4,935 4%
Total 91 $218,536 100%
SSA determined these overpayment notices were not sent because of system and/or manual errors. For example, a recipient was overpaid $10,870 from November 2002 through February 2005. SSA documented this overpayment in February 2005 but had not issued a notice to the recipient. When we referred this case to SSA, it was determined there was no diary alert on the record to indicate that an overpayment notice was necessary. SSA issued an overpayment notice on April 21, 2010 to begin recovery efforts. If SSA had sent the notice in February 2005, the Agency could have recovered $3,776 as of June 2010.
Fifteen of the 91 cases (17 percent) had an appropriate diary alert indicating that an overpayment notice needed to be sent. However, no notice had been issued for these cases. The age range of these diary alerts is shown in Table 2.
Table 2: Age of Diary Alerts
Age Number of Cases Overpayment Amount Allocation
1-2 years 10 $74,356 67%
< 1 year 5 $13,708 33%
Total 15 $88,064 100%
The remaining 76 of these 91 cases went undetected by SSA’s system and staff as needing a proper diary alert and/or subsequent overpayment notice.
In 38 of these cases, a different diary alert was coded to place overpayment collection on hold. Because of this diary alert, the system was not able to generate the proper diary alert to notify SSA that an overpayment notice needed to be sent. In all these cases, the pending diary alert should have been removed since proper development of the cases had been completed, thereby allowing recovery efforts to be initiated.
We found 3 of the 91 cases had an overpayment sequence updated with additional, more recent overpayment information, yet a notice still had not been sent as of June 2010. Information about overpayment occurrences is stored on SSA’s records. Each new overpayment and subsequent increase or decrease forms a sequence that is assigned a number. Sequences can be modified as long as an overpayment notice has not been issued.
For example, a recipient was overpaid $7,574 from August 2007 through July 2008. SSA documented this overpayment in August 2008 but never issued a notice. When this case was referred to SSA, the overpayment sequence in question was modified to show an overpayment of $22,217 for the extended period August 2007 through May 2010. As of June 2010, an overpayment notice had not been sent.
CONCLUSION AND RECOMMENDATIONS
Overall, SSA had initiated recovery efforts for most cases with an identified overpayment. Within the small population we identified, we found cases for which an overpayment notice had not been sent—sometimes for many years. Therefore, we recommend SSA:
1. Remind management and staff to send overpayment notices as soon as possible and monitor and process diary alerts for unresolved overpayment notices.
2. Issue an overpayment notice for the remaining 13 cases in the population.
SSA agreed with the recommendations. See Appendix C.
Patrick P. O’Carroll, Jr.
APPENDIX A – Acronyms
APPENDIX B – Scope and Methodology
APPENDIX C – Agency Comments
APPENDIX C – OIG Contacts and Staff Acknowledgments
C.F.R. Code of Federal Regulations
POMS Program Operations Manual System
SSA Social Security Administration
SSI Supplemental Security Income
U.S.C. United States Code
Scope and Methodology
To accomplish our objective, we:
• Reviewed applicable sections of the Social Security Act and the Social Security Administration’s (SSA) regulations, rules, policies, and procedures.
• Reviewed prior Office of the Inspector General reports.
• Retrieved Supplemental Security Income records with an unresolved overpayment amount. We then summarized the data by Social Security number and applied additional criteria to identify records with specific overpayment sequences where
a straight overpayment or increase to a previously existing overpayment was on the record;
a manual overpayment notice was needed or an automated notice was delayed;
the full overpayment sequence amount was still outstanding;
the overpayment amount was greater than $50;
the overpayment detection date was within a 10-year period, between June 1, 1999 and May 31, 2009;
the notice date field was blank; and
the notice status code indicated that a notice still needed to be sent.
• After these criteria were applied, we identified 12,543 records that may not have been sent an overpayment notice as needed. We then analyzed the records and identified 200 records still in pay status as of October 2009. After our initial review of the 200 cases, we identified 117 cases that did not appear to have been sent an overpayment notice. We referred these 117 cases to SSA for review on March 5, 2010 to (1) explain why an overpayment notice was not sent and recovery efforts were not initiated for the overpayment(s) in question and (2) correct the records, as necessary.
• Calculated overpayments that could have been recovered had the notices been sent.
We conducted our audit between February and June 2010 in Boston, Massachusetts. We found the data used for this audit were sufficiently reliable to meet our audit objective. The entities audited were SSA field offices under the Deputy Commissioner for Operations, and the Office of Applications and Supplemental Security Income Systems under the Deputy Commissioner for Systems. 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 the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Date: August 16, 2010 Refer
Refer To: S1J-3
To: Patrick P. O'Carroll, Jr.
From: James A. Winn /s/
Executive Counselor to the Commissioner
Subject: Office of the Inspector General (OIG) Draft Report, “Supplemental Security Income Overpayment Notices Not Sent” (A-01-09-19037)—INFORMATION
Thank you for the opportunity to review and comment on the draft report. Attached is our response to the report findings and recommendations.
Please let me know if we can be of further assistance. Please direct staff inquiries to
Rebecca Tothero, Acting Director, Audit Management and Liaison Staff, at (410) 966-6975.
COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL (OIG) DRAFT REPORT, “SUPPLEMENTAL SECURITY INCOME OVERPAYMENT NOTICES NOT SENT” (A-01-09-19037)
We offer the following comments.
We appreciate your statement on page 4, where you recognize that “Overall, SSA had initiated recovery efforts for most cases with an identified overpayment.” Nevertheless, we do agree with your recommendations and will take actions to further improve our process.
Remind management and staff to send overpayment notices as soon as possible and monitor and process diary alerts for unresolved overpayment notices
We agree. By August 31, 2010, we will issue an administrative message reminding management and staff to send overpayment notices when overpayments are determined and process diary alerts for unresolved overpayment notices.
Issue an overpayment notice for the remaining 13 cases in the population.
We agree. By August 31, 2010, we will issue overpayment notices for the remaining 13 cases.
OIG Contacts and Staff Acknowledgments
Judith Oliveira, Director, Boston Audit Division
David Mazzola, Audit Manager
In addition to those named above:
Chad Burns, Auditor
Katie Greenwood, Auditor
Kevin Joyce, IT Specialist
William Kearns, IT Specialist
Charles Zaepfel, IT Specialist
For additional copies of this report, please visit our Website at www.socialsecurity.gov/oig or contact the Office of the Inspector General’s Public Affairs Staff Assistant at (410) 965-4518. Refer to Common Identification Number
Commissioner of Social Security
Chairman and Ranking Member, Committee on Ways and Means
Chief of Staff, Committee on Ways and Means
Chairman and Ranking Minority Member, Subcommittee on Social Security
Majority and Minority Staff Director, Subcommittee on Social Security
Chairman and Ranking Minority Member, Committee on the Budget, House of Representatives
Chairman and Ranking Minority Member, Committee on Oversight and Government Reform
Chairman and Ranking Minority Member, Committee on Appropriations, House of Representatives
Chairman and Ranking Minority, Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations,
House of Representatives
Chairman and Ranking Minority Member, Committee on Appropriations, U.S. Senate
Chairman and Ranking Minority Member, Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations, U.S. Senate
Chairman and Ranking Minority Member, Committee on Finance
Chairman and Ranking Minority Member, Subcommittee on Social Security Pensions and Family Policy
Chairman and Ranking Minority Member, Senate Special Committee on Aging
Social Security Advisory Board
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