THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
ADMINISTRATION'S MONITORING OF
DEDICATED ACCOUNTS FOR
SUPPLEMENTAL SECURITY INCOME
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: August 3, 2007
To: The Commissioner
From: Inspector General
Subject: The Social Security Administration's Monitoring of Dedicated Accounts for Supplemental Security Income Recipients (A-13-06-16032)
Our objective was to determine whether the Social Security Administration (SSA) complied with its policies and procedures regarding the monitoring of dedicated accounts for Supplemental Security Income (SSI) recipients.
SSA administers the SSI program under Title XVI of the Social Security Act. The SSI program provides payments to individuals who have limited income and resources and who are either age 65 or older, blind or disabled.
Some individuals cannot 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 these beneficiaries' payments. A representative payee may be an individual or an organization. SSA selects representative payees for SSI recipients when representative payments would serve the individual's interests.
Public Law 104-193, enacted August 22, 1996, requires that certain past due benefit payments for SSI recipients under age 18 be placed in dedicated accounts. Dedicated accounts are separately maintained from other accounts and may only be used for certain expenditures. Only certain SSI underpayments may be deposited into dedicated accounts. A dedicated account must be established when the applicable past due SSI payment exceeds six times the maximum monthly benefit payable. As of April 2006, there were approximately 27,000 recipients in current pay status with dedicated account balances indicated on the Supplemental Security Record (SSR). These dedicated accounts totaled about $65 million.
Usually, these funds are managed by representative payees, who may only use the funds for allowable expenses. Allowable expenses must be related to the recipients' impairments and include impairment-related expenses for medical treatment and education or job skills training. Generally, the funds may not be used for non-impairment-related expenses, including food, clothing, housing, and personal items. However, SSA may approve use of dedicated account funds for basic living expenses to prevent a recipient from becoming homeless or malnourished.
SSA field offices are responsible for monitoring representative payee performance. Each year, representative payees for recipients with dedicated accounts are required to complete and submit Representative Payee Report of Benefits and Dedicated Account, SSA-6233-BK (Form SSA-6233) to appropriate field offices. The Form SSA-6233, a management control for monitoring dedicated accounts, assists SSA in determining the (1) use of dedicated account funds and SSI payments during the preceding 12-month reporting period, (2) representative payee's continuing suitability, and (3) continuing need for representative payment. The Form SSA-6233 reporting requirement remains in effect until the dedicated account is depleted or the recipient's eligibility is terminated. If an individual continues receiving SSI payments and has the payments managed by a representative payee, the payee must annually complete a Representative Payee Report (RPR).
RESULTS OF REVIEW
We identified instances where SSA did not always follow its policies and procedures regarding the monitoring of dedicated accounts for SSI recipients. We found (1) Forms SSA 6233 were not always provided; (2) information systems did not always indicate evaluation of the representative payees' responses; and (3) dedicated accounts were not always monitored timely.
SSA COULD NOT ALWAYS PROVIDE FORMS SSA-6233
SSA could not always provide the Forms SSA-6233. For our review, we requested these annual reports for a sample of 305 recipients (see Appendix B). As of December 2005, SSRs for the 305 recipients showed dedicated account balances totaling about $1.4 million. Of the 305, the Agency could not provide Forms SSA-6233 for 154 recipients (about 50 percent). For 151 recipients, SSA provided reports that were submitted by representative payees during Calendar Year (CY) 2005 or earlier.
SSA policy requires that the Forms SSA-6233 be retained for 2 years. In July 2006, we requested the Agency provide Forms SSA-6233 that representative payees should have submitted during CYs 2000 through 2005. Based on its policies, the Agency should have been able to, at a minimum, retrieve those Forms submitted by payees after June 2004. Representative payees should have submitted Forms for all 305 recipients in our sample in CY 2005, and SSA should have been able to provide these reports. However, of the 305, the Agency could only provide Forms for 93 recipients (30 percent).
In response to our requests for the Forms SSA-6233, on October 10, 2006, Agency staff reported.
. . . and the ROs [Regional Offices] regret that they have not been able to provide [Forms] SSA 6233s for all of the requested cases. The replies indicate that the various field office components have searched for the folders, including retrieving folders from storage facilities. In many instances, although the claims folder as well as separate postentitlement folders were retrieved from storage, no [Form SSA-] 6233 was in any of the files. Unfortunately, there are no additional steps that can be taken for those situations.
Office of Operations staff further reported "this could mean that the form was not completed for a variety of reasons, in addition to the obvious one (accountings not done)" or were not found.
Since the Forms SSA-6233 could not be provided, we question the effectiveness of this management control for monitoring dedicated accounts. The SSRs for the 154 recipients for which we did not receive reports indicated dedicated account balances totaling about $924,000 as of December 2005. We are concerned about whether the funds in these dedicated accounts were used in accordance with SSA policy. Without effective monitoring by SSA, funds in these accounts could be at-risk of misuse.
EVALUATIONS OF PAYEE RESPONSES WERE NOT ALWAYS RECORDED
The Agency's information systems did not always indicate evaluation of representative payees' responses on the Forms SSA 6233. Field office staffs are required to evaluate representative payees' responses on the Forms SSA-6233. However, SSA policy does not require that field office staff record the evaluation of representative payees' Form SSA-6233 responses.
Our review of Forms SSA-6233 for 151 recipients found 62 recipients whose Forms SSA 6233 contained questionable and incomplete responses. Of the 62 recipients, data in the Agency's information systems did not indicate the required evaluations were completed for 31 recipients.
We believe SSA management should be able to determine whether field office staff complied with policies and procedures for the evaluation of Forms SSA-6233. Office of Income Security Programs staff explained when field office staff resolve unacceptable payee responses, it is expected the instructions for the RPR are followed. The instructions require that staff resolve discrepant responses and record related activity on a Report of Contact. Further, Standards for Internal Control in the Federal Government, state that transactions should be promptly recorded to maintain their relevance and value to management in controlling operations and making decisions. The guidance also states "Internal control and all transactions and other significant events need to be clearly documented, and the documentation should be readily available for examination."
To determine whether questionable and incomplete representative payee responses were evaluated, we reviewed information recorded in the 62 recipients' respective SSRs and SSA's Modernized Supplemental Security Income Claims System. Of the 62 recipients, 31 did not have information recorded in these systems to indicate the field office staff completed the required evaluation. We also found information in SSA's systems indicating the questionable and incomplete payee responses for 22 recipients were resolved. For the remaining nine recipients, information in the two systems lacked sufficient details to independently determine whether issues regarding payee responses were resolved.
Staff from the Office of Operations explained the information regarding representative payees' questionable and incomplete responses may have been recorded in other Agency systems, such as StaRZ and Stripes 2000 or the Modernized Development Worksheet. Information recorded in these two systems is deleted after a certain period of time. We do not have direct access to the StaRZ and Stripes 2000. Therefore, we did not independently assess information recorded in this system. We did not locate information in the Modernized Development Worksheet indicating the questionable and incomplete payee responses were resolved for the 62 recipients.
Because SSA's policy does not require that field office staff record the evaluation of payees' Forms SSA-6233 responses, we question whether staff is always conducting the required evaluations. When staff does not record such monitoring activities, there is an increased risk that dedicated accounts are not adequately monitored. Without adequate monitoring, funds in these accounts could have been used inappropriately.
SSA staff should record the evaluation of Forms SSA-6233. However, the Agency could consider whether a comprehensive evaluation is needed for all forms. On April 12, 2006, we identified the following recipients as having dedicated account balances on the SSRs.
Table: SSI Recipients with Dedicated Account Balances
Balances Number of Recipients Total
0 - $100 11,888 $ 78,953
$100.01 - $1,000 2,624 1,241,563
$1,000.01 - $2,500 2,421 4,156,815
$2,500.01 - $5,000 4,958 19,057,524
$5,000.01 - $10,000 3,811 25,449,956
Greater than $10,000 1,000 15,436,545
Totals 26,702 $65,421,356
Since approximately 36.5 percent (9,769) of the dedicated accounts contained about 91.6 percent ($59.9 million) of the total funds, we believe SSA may want to reassess its policies for monitoring dedicated accounts using a risk-based approach.
MONITORING OF DEDICATED ACCOUNTS WAS NOT ALWAYS TIMELY
SSA's monitoring of dedicated accounts was not always timely. We found the Agency did not consistently obtain representative payees' reporting on dedicated accounts annually, as required. In addition, field office staff did not always update account balances.
Representative payees' Forms SSA-6233 were not always completed annually. SSA policy states "Representative payees are required to account, on an annual basis, for the use of benefits and report on the activity of funds in the dedicated account." Policy also states "Representative payees and age 18 (or older) recipients with dedicated accounts must report annually on the activity of funds in the account to ensure deposits and expenditures are in compliance with the law." Of the 151 recipients reviewed, representative payees for 67 did not complete Forms for dedicated accounts annually.
For the 67 recipients, we reviewed SSA Forms SSA-6233 that requested payees report dedicated account information covering periods longer than 12 months. SSA's field offices determined the reporting periods specified on the Forms SSA-6233. Of the 67 recipients, 23 had Forms SSA 6233 with reporting periods longer than 18 months. For example, one Form SSA-6233 requested the payee provide information for a 28 month period. The representative payee reported costs for this period totaling over $3,000.
We were unable to determine why the field offices requested the payees to report on dedicated accounts for periods exceeding 12 months. We believe the 12 month reporting period, if observed by field office staff, would provide the Agency more timely information regarding dedicated accounts.
Dedicated account information on the SSR had not been updated, as required. SSA policy indicates, when field office staffs complete dedicated account monitoring, the dedicated account balance must be updated. For our sample of 305 recipients, as of April 2006, 101 (about 33 percent) did not have dedicated account balances updated on the SSR in CY 2005. However, the balances for all 305 recipients should have been updated during that time. Further, the account balances for the 101 recipients we identified had not been updated since CY 2004 or earlier. For example, a recipient included in our review had a dedicated account balance of $12,220 that had not been updated since October 2000.
Office of Operations staff indicated the absence of the dedicated account balance on the SSR does not mean the Form SSA-6233 was not completed. The Form SSA-6233 may have been completed, but the SSR dedicated account balance fields were not updated as required. Policy requires that the dedicated account balance be updated once the monitoring is completed.
Field offices manually mail the Forms SSA-6233. When the field office receives a diary alert from the Agency's computer systems, staff is required to complete certain data on the Form SSA-6233. These data include the reporting periods specified on the Forms SSA-6233. After the applicable data are recorded, the Forms SSA-6233 are mailed to the representative payees.
If SSA were to automate the field offices' input to, and mailing of, Forms SSA-6233, it may increase the efficiency and effectiveness of the annual report as a management control for monitoring dedicated accounts. Except for the three questions relating to dedicated accounts, the SSA-6233 and RPR ask payees the same questions. The mailing of reports to payees serving recipients without dedicated accounts is an automated process performed by a contractor. The contractor completes certain data on the RPR and mails the report to the representative payee.
We did not determine the cause for the Agency's actions. We believe the Agency's actions could result in untimely detection of inappropriate use of dedicated account funds. The 23 recipients with reporting periods greater than 18 months had dedicated account balances totaling about $142,000 as of December 2005. Our analysis also identified 101 recipients with account balances that were not updated, as required, totaling about $573,000. Without timely monitoring, these funds may be at-risk because SSA may be unable to timely (1) detect and resolve instances of misuse of funds or (2) identify representative payees who are no longer suitable.
CONCLUSION AND RECOMMENDATIONS
We determined SSA did not always follow its policies and procedures regarding the monitoring of dedicated accounts for SSI recipients. We acknowledge the Agency may not consider dedicated account monitoring a priority workload. In 2006, SSA "suppressed" a workload that affected its monitoring of dedicated accounts. Administrative Message 05219 REV, indicated, effective January 7, 2006, the mechanism that alerted field office staff to issue Forms SSA-6233 was being suppressed.
Since individuals receiving SSI payments are among the most vulnerable beneficiaries SSA serves, the Agency should monitor the funds in their dedicated accounts in an adequate and timely manner. We recommend SSA:
1. Remind field offices of Form SSA-6233 retention and storage requirements.
2. Review its policies and procedures relating to Forms SSA-6233 and revise as necessary to ensure dedicated accounts are appropriately monitored.
3. Evaluate the cost-benefit of automating the Form SSA-6233 process.
SSA agreed with our recommendations. The text of SSA's comments is included in Appendix C.
Patrick P. O'Carroll, Jr.
APPENDIX A - Acronyms
APPENDIX B - Scope and Methodology
APPENDIX C - Agency Comments
APPENDIX D - OIG Contacts and Staff Acknowledgments
CY Calendar Year
Form SSA-6233 Representative Payee Report of Benefits and Dedicated Account
OIG Office of the Inspector General
POMS Program Operations Manual System
RPR Representative Payee Report
SSA Social Security Administration
SSI Supplemental Security Income
SSR Supplemental Security Record
Scope and Methodology
To accomplish our objectives, we:
Reviewed applicable laws and regulations, pertinent parts of the Social Security Administration's (SSA) Program Operations Manual System and other criteria relevant to the Supplemental Security Income (SSI) program and the monitoring of dedicated accounts.
Identified prior relevant audits.
Interviewed staff from SSA's Offices of Operations and Income Security Programs.
Analyzed information recorded on the Supplemental Security Record (SSR) and the Modernized Supplemental Security Income Claims System.
Reviewed Representative Payee Reports of Benefits and Dedicated Account, SSA 6233-BK.
We obtained an electronic data extract identifying recipients who were receiving SSI payments as of April 2006 and who had dedicated account balances recorded on their SSRs. As of April 12, 2006, we identified 26,702 SSI recipients who met these criteria. Of these 26,702, we identified 23,471 recipients whose latest dedicated account balances had dates between January 1, 2000 and December 31, 2005. Excluded from review were recipients whose latest account balances were outside this time frame. Of the 23,471, we did not consider for review SSI recipients whose latest dedicated account balances were $0.00 as of December 31, 2004. As a result, we identified 17,277 SSI recipients we could assess their dedicated accounts.
Of the 17,277 SSI recipients identified, we selected a sample of 305 recipients to review. Our sample consisted of random samples from 3 sampling frames consisting of (a) 50 of 1,942 SSI recipients with dedicated account balances of $0.00 in Calendar Year (CY) 2005 on the SSR; (b) 50 of 3,916 SSI recipients with dedicated account balances of $.01 - $500 on the SSRs for CYs 2000 through 2005; and (c) 200 of 11,414 SSI recipients with dedicated account balances over $500 for CYs 2000 through 2005. In addition, we included in our sample the five SSI recipients with the highest reported dedicated account balances.
We determined computer-processed data to be sufficiently reliable for their
intended use. Further, any data limitations were minor in the context of this
assignment, and the use of the data should not lead to an incorrect or unintentional
conclusion. The electronic data used in our audit was primarily extracted from
the SSR. We tested completeness of the data by reviewing the programming logic
used for the data extract. The accuracy of the data was tested by tracing individual
data fields from the electronic extract to information contained within the
SSR, as appropriate. Other tests we performed include
comparing data elements on the SSR and Forms SSA-6233 for consistency and
analyzing the data extract for missing data fields, unrealistic values or dates, or illogical relationships between data fields.
We performed our review at SSA Headquarters in Baltimore, Maryland. The entity
reviewed was the Office of the Deputy Commissioner for Operations. We performed
our review from August 2006 through April 2007 in accordance with generally
accepted government auditing standards.
Date: July 25, 2007
To: Patrick P. O'Carroll, Jr.
From: Larry W. Dye /s/
Subject: Office of the Inspector General (OIG) Draft Report, "The Social Security Administration's Monitoring of Dedicated Accounts for Supplemental Security Income Recipients" (A-13-06-16032)--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, on (410) 965-4636.
COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL'S (OIG) DRAFT REPORT, "THE SOCIAL SECURITY ADMINISTRATION'S MONITORING OF DEDICATED ACCOUNTS FOR SUPPLEMENTAL SECURITY INCOME RECIPIENTS" (A-13-06-16032)
Thank you for the opportunity to review and provide comments on this draft report. Our comments on the draft recommendations are as follows.
Remind field offices of Form SSA-6233 retention and storage requirements.
We agree. We will issue a reminder to field office employees regarding the retention and storage of Forms SSA-6233 by the end of September 2007.
Review its policies and procedures relating to Forms SSA-6233 and revise as necessary to ensure dedicated accounts are appropriately monitored.
We agree. We will update policy instructions to emphasize that development of unacceptable payee responses on the Form SSA-6233 is required. Additionally, we will determine the best mechanism the field office should use to ensure a permanent record exists detailing the outcome. We expect to complete these tasks by the end of March 2008.
Evaluate the cost-benefit of automating the Form SSA-6233 process.
We agree in theory; however, due to the lack of system resources and competing Agency priorities, we are unable to support development of an automated system for this process. A substantial amount of system programming and changes in our business process would have to be completed to implement the automation of this small workload. We also believe that collections of misapplied dedicated account funds would be quite limited. However, we will continue to consider possible ways to improve our business process to increase the timeliness of dedicated account monitoring.
We are in the process of completing substantial improvement in a higher volume
workload of annual accounting, which will yield substantial savings.
OIG Contacts and Staff Acknowledgments
Shirley E. Todd, Director, General Management Audit Division, (410) 966-9365
Lance Chilcoat, Audit Manager, (410) 965-9743
In addition to those named above:
Janet Stein-Pezza, Analyst-in-Charge
Brennan Kraje, Statistician
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-13-06-16032.
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 Resource Management (ORM). 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 Resource Management
ORM supports OIG by providing information resource management and systems security. ORM also coordinates OIG's budget, procurement, telecommunications, facilities, and human resources. In addition, ORM 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.