THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
OF HEARINGS AND APPEALS
We improve SSA programs and operations and protect them against fraud, waste, and abuse by conducting independent and objective audits, evaluations, and investigations. We provide timely, useful, and reliable information and advice to Administration officials, the 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.
By conducting independent and objective audits, investigations, and evaluations,
we are agents of positive change striving for continuous improvement in the
Social Security Administration's programs, operations, and management and in
our own office.
Date: August 25, 2005
To: The Commissioner
From: Inspector General
Subject: Office of Hearings and Appeals Megasite Information Management and Bar-Coding Systems (A-12-05-15085)
Our objective is to determine whether the Office of Hearings and Appeals (OHA) Megasite's new technology, consisting of an upgraded computer tracking system and bar-coding system, effectively tracks folders and provides the technological support to better safeguard folders.
The OHA's Appeals Council (AC) reviews Administrative Law Judge decisions appealed by claimants. The Council decides on approximately 100,000 cases per year. The AC consists of Administrative Appeals Judges and is supported by the Office of Appellate Operations (OAO). Branches within OAO process disability cases and are supervised by branch chiefs. Hearing offices send case folders that have been denied or dismissed to the Megasite in Springfield, Virginia. OHA estimates 148,000 folders are stored on 18,000 shelves in the Megasite.
The Megasite serves as an off-site active claims storage facility and repository for all folders processed by the AC. Folders are retained anywhere from 6 months to 2 years, depending on whether the claimant files an appeal at the AC or civil court level. Folders are moved between the AC and Megasite during different stages of the appellate process. Eventually folders are released to permanent Social Security Administration (SSA) storage or SSA payment centers (See Appendices B & C for illustrations of the folder receipt and retention process). Work performed in the branches is based exclusively on documents in the folder. The Megasite's ability to control, quickly locate, retrieve, and route folders is critical to ensuring the timeliness of processing appealed claims.
We audited the Megasite in Fiscal Year (FY) 2003 and reported that the computer inventory system, Megasite Case Control System (MSCCS), was losing data and crashing, and, as a result, OHA staff could not find all requested folders. We tested both the Megasite's physical and computerized inventories and we projected that OHA could not locate as many as 10,100 folders. OHA subsequently installed new computer and bar-coding equipment.
As mentioned in our prior report, the Megasite upgraded from MSCCS to Enhanced Megasite Case Control System (eMSCCS) and installed Radio Beacon, a commercial warehouse management system, in July 2003. OHA later found that eMSCCS was inadequate for Megasite operations and then implemented Megasite Information Management System (MIMS) in August 2004. MIMS is a web-based, database system updated in real-time using Radio Beacon radio-frequency hand held scanners and bar-code labels. MIMS regularly interfaces with other OHA systems to expedite the folder receipt process.
RESULTS OF REVIEW
The implementation of new technology allowed OHA to greatly improve its ability to account for folders stored at the Megasite. Specifically, our audit found:
Inventory accuracy greatly improved and problems discussed in the prior report
have been addressed.
The inventory tracking system is more technologically advanced and provides real-time data, enabling OHA to effectively track and better safeguard folders.
Shelf inventory processes have improved under the new system.
OAO branch chiefs reported an improvement in Megasite service, which they claim has positively affected branch operations.
While the system automatically sends emails to folder requesters, additional individuals may need to be notified about availability of folders.
Written procedures are needed for key Megasite processes for training and reference purposes.
See Table 1 showing an overview in Megasite operations before and after the new technology was implemented.
Table 1: Overview of Megasite Operations Before and After Implementation of
FY 2003 Current
OIG results from testing inventory samples Projected as many as 10,100 folders listed in MSCCS but unable to locate on shelves Inventory accuracy greatly improved - error rate immaterial (too low to project)
Inventory tracking system
MSCCS - not web-based, many crashes and downtime
MIMS - web-based, no crashes, no downtime
Access limited to Megasite staff
Access available to both Megasite and OAO branch staff
Real-time data not available Real-time data available
Shelf inventory process Results manually recorded on paper and computerized inventory must be manually updated
Results automatically captured in the system by scanners
Results not retained
No accuracy rate available Accuracy rate of 97% to 99%
OAO branch satisfaction with Megasite service Branch chiefs noted Megasite needs improvement Branch chiefs noted great improvement in Megasite service
Notification of availability of folder from Megasite Only requestor receives
notification, via email or phone from Megasite staff Only requestor receives
notification, via automatic email from MIMS
Procedures for key Megasite processes Given orally or by emails Given orally or by emails
ACCURACY OF FOLDER INVENTORY
We found that the Megasite's inventory accuracy has greatly improved and the problems discussed in our prior report have been addressed. To test the Megasite's computerized and physical inventories, we selected random samples of 600 folders in total: 300 folders to test from the system to the shelf and another 300 folders to test from the shelf to the system. We found an immaterial error rate and therefore did not project our results. For example, of 600 folders, we found 2 folders had a Social Security number (SSN) that was incorrectly entered into MIMS and one folder that had a shelf location in MIMS different from the shelf it was pulled from.
INVENTORY TRACKING SYSTEM
MIMS allows OHA to more effectively track and better safeguard folders with the new web-based tracking system. The new technology saves time and effort of Megasite staff, reduces the chance for human error, is accessible to both Megasite and OAO branch staff and provides real-time data. Megasite management stated they are happy with the new technology and said it is a big improvement over MSCCS, which was not web-based.
The new technology saves time and effort of staff because it does not crash or have down time, which was a problem with MSCCS. It also saves time when branches request folders because branch staff request folders via MIMS rather than by email, fax, or phone calls to Megasite staff.
The chance for human error has declined. Scanners transmit folder and shelf identification bar-code information, not SSNs or other sensitive claimant information. Human error during the receiving and storing processes was one of the main reasons folders were inaccurately tracked in FY 2003. Previously, an employee may have incorrectly transcribed a claimant's SSN or name on a sheet of paper. Now, if an employee misses scanning a folder on a shelf, controls within the system enable the scanners to display a message asking whether or not a certain folder is on a particular shelf.
Furthermore, access to the system is available to OAO branch staff, along with Megasite staff. Both staffs can view current folder data in MIMS from their workstations.
MIMS real-time data also improves folder tracking and accountability. MSCCS did not provide real-time data. The new technology provides current information on folder inventory and locations and folders requested by a branch. Inventory is immediately updated and recorded as inventories are conducted and results are efficiently retained. In addition, Megasite management run weekly reports with current information extracted from MIMS. These reports improve Megasite folder accountability and help assess the overall inventory of folders (see Appendix F for information included in the reports).
SHELF INVENTORY PROCESS
The shelf inventory process at the Megasite has improved with the use of scanning technology, real-time update of the inventory system, and recordation and retention of results. The Megasite conducts two types of inventories to ensure accuracy of folder inventory: 1) a 100 percent inventory, and 2) cycle counts when a folder is being placed on a shelf or is being sent to another storage facility (see Appendix G for further details on both inventories).
Anytime a folder is scanned during an inventory, Radio Beacon updates MIMS in real-time, increasing the inventory accuracy. With scanning, Megasite staff complete 100 percent inventories in 2-4 months, rather than the 6 months that it took in FY 2003. Employees do not have to write anything down on paper (i.e. when any discrepancies are noted) nor manually enter reconciliations in the computer systems, as they did in FY 2003 because Radio Beacon updates MIMS with correct folder locations. In addition, unlike in FY 2003, Megasite management keeps an electronic spreadsheet of inventory data and results and updates it as an inventory is conducted. Their results show an inventory accuracy rate of 97 percent to 99 percent.
SERVICE TO OFFICE OF APPELLATE OPERATIONS BRANCHES
Megasite service to OAO has greatly improved and positively affected branch operations. As part of our FY 2003 review, we evaluated OAO's overall satisfaction with Megasite service prior to implementation of MIMS and interviewed 8 of the 10 branch chiefs that we interviewed from our prior report. At that time, the branch chiefs suggested that OHA replace MSCCS and install bar-coding. These changes are now part of MIMS.
MIMS streamlines the folder requesting process and tracks folders more effectively and efficiently. Therefore, branches receive more folders timelier. Branches also focus more on their workload instead of tracking down requested folders not received. For example, branch staff use MIMS to determine if a folder is in the Megasite and to request folders. Previously, branch requests were made via fax, email, or telephone-now requests are made via MIMS, which is a more efficient method for both OAO and Megasite staff.
NOTIFICATION OF AVAILABILITY OF REQUESTED FOLDERS
One of the features under MIMS is an email-based interface between MIMS and
the folder requester. When a requested folder is not available at the time of
the request, and the folder later becomes available, MIMS automatically emails
a Notification Availability message to only the requestor. During our discussions
with branch chiefs, a suggestion was made to improve MIMS in this area because
it is important for branches to process folders as soon as possible. The branch
chiefs suggested MIMS could email a Notification Availability message to another
branch employee, in addition to the
requestor, for control purposes and when the requestor may be out of the office. Such notification could eliminate unnecessary downtimes in the folder receipt process.
While the Megasite staff were very knowledgeable about duties, management could not cite any written procedures of key Megasite processes used for training and reference purposes. During our audit, we found employee instruction on the new technology was mostly given orally and sometimes via emails. For example, Megasite management provided us with a written description of how inventories were conducted and how discrepancies were resolved. However, there are no written procedures on how to conduct inventories and instructions are given orally. Written procedures should be documented for key processes such as receiving, storing, locating, retrieving, and routing folders, and conducting inventories.
CONCLUSION AND RECOMMENDATIONS
The accuracy of the Megasite's physical and computerized inventories has greatly improved since our prior review. MIMS has changed Megasite processes for the better, allowing the Megasite to better track and safeguard folders through the use of real-time data. Megasite service to the OAO branches has improved and positively affected branch operations. However, the current notification process could be improved so that all relevant parties in OAO are notified when a requested file becomes available. In addition, the Megasite needs written procedures for training and reference purposes.
To ensure a smooth flow of cases and a well-documented inventory and tracking process, we recommend SSA:
1. Modify existing procedures and/or systems within OAO so that another person in the branch, in addition to the individual requestor, receives notification of availability of folders.
2. Develop a written manual of Megasite procedures that includes receiving, storing, locating, retrieving, and routing folders and conducting inventories, for training and reference purposes.
The Agency agreed with both of our recommendations. The full text of SSA's comments are included in Appendix H.
Patrick P. O'Carroll, Jr.
APPENDIX A - Acronyms
APPENDIX B - Flowchart: Receipt of Folders at the Megasite
APPENDIX C - Flowchart: Megasite Folder Retention Periods
APPENDIX D - Scope and Methodology
APPENDIX E - Testing of Megasite Inventory
APPENDIX F - Information Included in Megasite Weekly Reports
APPENDIX G - Shelf Inventories Conducted at the Megasite: 100 Percent and Cycle Counts
APPENDIX H - Agency Comments
APPENDIX I - OIG Contacts and Staff Acknowledgements
AC Appeals Council
CCPRB Court Case Preparation and Review Branch
CPMS Case Processing and Management System
DPB Disability Program Branch
eMSCCS Enhanced Megasite Case Control System
FY Fiscal Year
MIMS Megasite Information Management System
MSCCS Megasite Case Control System
NCC New Court Case
OAO Office of Appellate Operations
OHA Office of Hearings and Appeals
PCC Potential Court Case
SSA Social Security Administration
SSN Social Security Number
Flowchart: Receipt of Folders at the Megasite
Flowchart: Megasite Folder Retention Periods
Scope and Methodology
To accomplish our objective, we:
Reviewed operations at the Megasite and Office of Appellate Operations (OAO)
to gain an understanding of how folders are requested, stored and tracked between
the Megasite and OAO.
Analyzed current policies and procedures for the Megasite and OAO.
Reviewed our prior audit report on the Megasite.
Interviewed Megasite personnel regarding Megasite operations.
Gained an understanding of the new systems.
Interviewed OAO branch chiefs to document their experience with the previous and current inventory systems.
Tested a sample of cases from the shelves to the computerized inventory and also from the computerized inventory to the shelves (see Appendix E).
Discussed our results with Megasite staff and resolved any discrepancies.
We performed our field work from October 2004 until March 2005. Our audit included
an evaluation of existing controls, policies and procedures specifically related
to operations of the Megasite and folder retrieval from this facility. The entity
audited was the Office of Hearings and Appeals Megasite within the Office of
the Deputy Commissioner for Disability and Income Security Programs. We performed
our audit in Falls Church and Springfield, Virginia. We conducted our audit
in accordance with generally accepted government auditing standards.
Testing of Megasite Inventory
TEST OF PHYSICAL INVENTORY
To test the physical inventory, we traced a randomly selected sample of 300 case folders physically located at the facility on November 3, 2004, to the Megasite Information Management System (MIMS). Since we did not manually count the inventory of folders on November 3, 2004, we relied on Office of Hearings and Appeals' (OHA) estimate of folders in the Megasite as our universe. Folders are filed on shelves that are empty or partially empty. To select the folders, we randomly selected 300 shelves from 18,159 shelves available for folder storage at the Megasite. For each randomly selected shelf, we chose the first folder stored on the left side of the shelf.
Universe Universe Size Sample
Size Selection Date Selection
All folders in the Megasite 148,000 300 November 3, 2004 Shelving Unit Identification Numbers
In the test of the physical inventory, we found that of the 300 sampled folders:
three had documents inside the folder that did not agree with the Social Security
number (SSN) on the front cover;
one had a shelf location in MIMS that did not match its actual shelf location from where it was pulled;
one had documents inside the folder that did not agree with the claimant's name on the front cover;
one had an unanticipated error in which the SSN was entered incorrectly into MIMS; and
all had a claimant name in MIMS that agreed with the claimant name on the front cover, and all were in MIMS.
Due to the immaterial amount of errors we did not project our results. We shared
each of these errors with Megasite staff so the folders could be corrected,
TEST OF COMPUTERIZED INVENTORY
To test the computerized inventory, we traced a randomly selected statistical sample of 300 folders recorded in MIMS as located in the Megasite on November 9, 2004, to their physical location within the facility.
Universe Universe Size Sample Size Selection Date Selection Criteria
All folders in MIMS coded as in the Megasite 158,239 300 November 9, 2004 SSN
In the test of the computerized inventory, we found that of the 300 sampled folders:
all folders but one were found (the one folder not found was not counted as
an error because MIMS indicated that it was pulled from the shelves on
November 9, 2004 to go to court);
one had documents inside the folder that did not agree with the SSN on the front cover;
one had documents inside the folder that did not agree with the claimant's name on the front cover; and
one had an unanticipated error in which Megasite staff may have entered the SSN incorrectly into MIMS.
Due to the immaterial amount of errors we did not project our results. We shared each of these errors with Megasite staff so the folders could be corrected, as appropriate.
Information Included in Megasite Weekly Reports
The Megasite Weekly Reports include:
closing inventory for the week;
total cases received by percentage of what component sent the case;
total cases sent by percentage of cases that were sent to Disability Program Branches (DPB), Court Case Preparation and Review Branches (CCPRB), other components or released to permanent storage;
number of cases sent to the DPB, by branch and by Special Case Code (such as ready to work, or a code that needs interim action, or miscellaneous); and
current request for review inventory, by DPB Branch and by Special Case Code.
Below are scanned copies of excerpts from a Megasite Weekly Report.
Shelf Inventories Conducted at the Megasite: 100 Percent and Cycle Counts
100 PERCENT INVENTORY
Megasite management aims to conduct a 100 percent inventory at least twice a year. To conduct the inventory, Megasite management instructs employees to scan folders on designated shelves, starting with the first shelf until all shelves available for folder storage are inventoried. With the Megasite Information Management System (MIMS), 100 percent inventories are completed in 2-4 months, rather than the 6 months that it took in Fiscal Year (FY) 2003. Megasite staff have completed two 100 percent inventories since MIMS was installed and a third one is underway. Unlike the process in FY 2003, Megasite management keeps a record of results, which currently shows an accuracy rate of 97 to 99 percent.
Employees do not have to write anything down on paper (i.e. when any discrepancies are noted) nor manually enter reconciliations in the computer system, as they did in FY 2003. Radio Beacon automatically updates MIMS with correct folder locations.
Megasite management provided us with a written description of how the inventories were conducted and how discrepancies were resolved. However, there are no written procedures provided to employees on how to conduct inventories and instructions are given verbally.
Megasite management provided us with reports that show when the inventories were conducted, the start and completion dates, the count of folders inventoried, and any discrepancies noted. The reports do not show who conducted the inventories. However, staff with scanning rights have unique scanning identification codes which enable management to determine who scanned what folder and when it was scanned. Megasite management also keeps a spreadsheet of inventory data and updates it as an inventory is conducted.
CYCLE COUNT INVENTORY
The second type of inventory is a cycle count. This is one of the advantages of using the scanning technology. In our 2004 report, the Megasite conducted "random audits" for shelves, which was a more time consuming and tedious process than a cycle count. Random audits required paper, written notations and manual reconciliation to the former system, the Megasite Case Control System.
Under the new process, Megasite staff conduct cycle counts as a folder is placed on a shelf or released for permanent storage. MIMS is automatically updated with correct folder locations, increasing the accuracy of the folder inventory. When a shelf identification label is scanned, the scanner displays the number of "expected" folders with their bar-code numbers reading on that shelf, according to MIMS and Radio Beacon. As a folder's bar-code label is scanned, the scanner counts down the number of "expected" folders. The scanner verifies what folders are actually on the shelf and "adds" new folders just placed there or other folders that were physically on that shelf but not "expected" to be there.
The cycle count process also "deletes" folders from the shelf for
folders that were "expected" but not physically there. There is a
chance an employee will miss scanning a folder, thereby "deleting"
it from the shelf. Megasite management is able to identify situations were cases
have been "deleted" off a shelf and later on "added" back
to the same shelf. Folders in this situation would not have a location in MIMS
or be found in MIMS until they are scanned to the shelf again and counted as
"additions." MIMS has a program that can identify these deletions
that turned into additions, allowing Megasite management to counsel any employees
having trouble with accurately shelving or scanning folders.
Date: August 17, 2005
To: Patrick P. O'Carroll, Jr.
From: Larry W. Dye
Chief of Staff
Subject: Office of the Inspector General (OIG) Draft Report "Office of Hearings and Appeals Megasite Information Management and Bar-Coding Systems" (A-12-05-15085) -- INFORMATION
We appreciate OIG's efforts in conducting this review. Our comments on the report are enclosed.
Please let me know if we can be of further assistance. Staff inquiries may be directed to Candace Skurnik, Director, Audit Management and Liaison Staff at extension 54636.
COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL (OIG) DRAFT REPORT "OFFICE OF HEARINGS AND APPEALS MEGASITE INFORMATION MANAGEMENT AND BAR-CODING SYSTEMS" (A-12-05-15085)
Thank you for the opportunity to review and comment on the draft report. We agree with the findings and conclusions presented in the report. We are pleased that the report recognizes that the Megasite Information Management System (MIMS) has allowed the Office of Hearings and Appeals to greatly improve its ability to account for folders stored at the Megasite. We also appreciate that the report lists the shortcomings of the prior system, as presented in the prior OIG study and shows how the new system addresses and improves each.
Our specific responses to the report's recommendations are provided below.
Modify existing procedures and/or systems within the Office of Appellate Operations (OAO) so that another person in the branch, in addition to the individual requestor, receives notification of availability of folders.
We agree. We intend to accomplish this without programming changes to MIMS by sending each branch and component manager instructions on setting up specific local Microsoft Outlook rules that will direct the automated MIMS email confirmation to the appropriate branch designee(s).
Develop a written manual of Megasite procedures that includes receiving, storing, locating, retrieving, and routing folders and conducting inventories, for training and reference purposes.
We agree. A comprehensive procedures manual has been under development and is in the review and comment stage. The manual should be ready for user distribution in early fiscal year 2006.
OIG Contacts and Staff Acknowledgments
Walter Bayer, Director, (215) 597-4080
Michael Maloney, Audit Manager, (703) 578-8844
In addition to those named above:
Ellen Silvela, Auditor
Brennan Kraje, Statistician
Annette DeRito, Writer/Editor
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 12 05 15085.
Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of our Office of Investigations (OI), Office of Audit (OA), Office of the Chief Counsel to the Inspector General (OCCIG), and Office of Executive Operations (OEO). To ensure compliance with policies and procedures, internal controls, and professional standards, we also have a comprehensive Professional Responsibility and Quality Assurance program.
Office of Audit
OA conducts and/or supervises 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 and program evaluations and projects on issues of concern to SSA, Congress, and the general public.
Office of Investigations
OI conducts and coordinates investigative activity 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 OIG liaison to the Department of Justice on all matters relating to the investigations 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. Finally, OCCIG administers the Civil Monetary Penalty program.
Office of Executive Operations
OEO supports OIG by providing information resource management and systems security. OEO also coordinates OIG's budget, procurement, telecommunications, facilities, and human resources. In addition, OEO is the focal point for OIG's strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act of 1993.