OFFICE OF
THE INSPECTOR GENERAL

SOCIAL SECURITY ADMINISTRATION

SUPPLEMENTAL SECURITY INCOME
RECIPIENTS ELIGIBLE AS DISABLED ADULT
CHILDREN UNDER THE OLD-AGE, SURVIVORS
AND DISABILITY INSURANCE PROGRAM

April 2007

A-13-07-17073

AUDIT REPORT


Mission

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.

Authority

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.

Vision

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.


MEMORANDUM

Date: April 30, 2007

To: The Commissioner

From: Inspector General

Subject: Supplemental Security Income Recipients Eligible as Disabled Adult Children Under the Old Age, Survivors and Disability Insurance Program (A-13-07-17073)

OBJECTIVE

Our objective was to determine whether Supplemental Security Income (SSI) recipients who previously received Old-Age, Survivors and Disability Insurance (OASDI) benefits as child beneficiaries were eligible for additional OASDI benefits.

BACKGROUND

The SSI program provides cash assistance to individuals who have limited income and resources and who are age 65 or older, blind or disabled. , The OASDI program provides benefits to qualified retired and disabled workers and their dependents, as well as survivors of insured workers. According to Social Security Administration (SSA) policy, an application for SSI payments is considered an application for OASDI benefits.

Individuals receiving SSI payments may also be eligible for benefits as disabled adult children (DAC) under the OASDI program if they
were disabled before reaching age 22;
cannot be entitled to a higher OASDI benefit payment based on their own work history; and
have a parent who is receiving OASDI benefits or who was OASDI insured at the time of death.

We examined information from electronic data extracts from the Agency's Supplemental Security (SSR) and Master Beneficiary Records (MBR). As of August 10, 2006, our examination had identified 278,794 SSI recipients who had (1) attained age 18 on or after August 22, 1996; (2) established their dates of disability before age 22; (3) received OASDI benefits as children; and (4) received SSI payments. For these recipients, we applied additional screening requirements and found 5,908 individuals who appeared to be eligible for additional OASDI benefits. These individuals were receiving only SSI payments as of August 2006. See Appendix B for a detailed discussion of our Scope and Methodology.

Of the 5,908 SSI recipients, we selected a random sample of 200 for review. We independently reviewed information, recorded as of September 2006, in these recipients' respective SSRs and MBRs.

RESULTS OF REVIEW

Our analysis of information in SSA's SSR and MBR found there were SSI recipients who received OASDI benefits as child beneficiaries who appeared to be eligible for additional OASDI benefits. Of the 200 SSI recipients we reviewed, 137 appeared to be DAC cases and eligible for additional OASDI benefits. As such, we estimate about 4,047 of the 5,908 SSI recipients we identified may be eligible for additional OASDI benefits. Of the 137 DAC cases, we selected 10 SSI recipients to assess their respective OASDI and SSI payments. We determined these 10 recipients were due OASDI underpayments of approximately $114,000.

SSI Recipients Appeared To Be Eligible for OASDI Benefits As Disabled Adult Children

Of the 200 SSI recipients we reviewed, 137 (68.5 percent) appeared to be eligible for additional benefits as DAC under the OASDI program. We excluded those SSI recipients who appeared to be eligible for OASDI benefits, but the SSI recipients' parents received the maximum disability payment allowable under the OASDI program. We asked SSA staff why the Agency had not determined whether these 137 individuals were eligible for additional OASDI benefits as DAC. SSA staff advised us this occurred because individuals did not always understand DAC eligibility requirements, and the reporting forms were unclear.

Further, SSA staff indicated the Agency has on-going efforts for identifying individuals that may be eligible as DAC. Staff reported system enhancements were made to help operational staff identify DAC eligibility. SSA's Modernized Claims System now collects information pertaining to a child's potential entitlement. In addition, the Agency is modifying its Form SSA-1372, Advance Notice of Termination of Child's Benefits.

Of the 137 SSI recipients identified, we assessed the OASDI and SSI payments for 10 cases and discussed our results with SSA staff. Office of Public Service and Operations Support staff confirmed all 10 individuals were eligible as DAC for additional OASDI benefits. Based on the results of our analysis, we estimate about 4,047 of the 5,908 SSI recipients we identified appeared to be eligible for OASDI benefits as DAC.

On November 29, 2006, we met with Agency representatives to discuss our review and plans for further work. We were informed SSA had started a similar effort and was reviewing a sample of SSI recipients. During the discussion, we provided Agency staff a list of the 200 SSI recipients we reviewed and agreed to share information about the 5,908 SSI recipients identified in our audit population. As of December 8, 2006, the Agency's SSR and MBR indicated 7 (5.1 percent) of the 137 recipients we identified were receiving OASDI benefits as DAC.

We reviewed information Agency staff provided us regarding SSA's selection of recipients who may be eligible for OASDI benefits. The Agency's selection methodology did not include all the screening requirements we used. SSA reported 16,536 SSI recipients were identified for further review. Of the 5,908 individuals who met our screening requirements, Agency staff stated SSA had also identified about 30 percent. Later, staff reported SSA identified 1,500 (25.4 percent) of the SSI recipients we identified. Our independent review of the information provided by SSA found 1,500 of the recipients we identified were also identified by the Agency.

We believe SSA may be able to maximize its limited resources by using our analysis of SSI recipients to more efficiently pinpoint those cases most likely to reflect eligibility as DAC. Based on our testing results, we have identified a group of SSI recipients who may be eligible for OASDI benefits. Such action may facilitate benefit payments being made to eligible individuals earlier than if SSA completes its study without targeting this group of SSI recipients.

OASDI Benefit Underpayments May Be Due SSI Recipients

We computed OASDI underpayments due for the 10 SSI recipients SSA confirmed were eligible for OASDI benefits as DAC. These SSI recipients were selected because, if eligible as DAC under the OASDI program, they would receive a significant net increase in monthly payments. These recipients were receiving an average monthly SSI payment of $589. We determined the average monthly OASDI benefit payment these individuals were eligible to receive was $899. Based on the 10 recipients' eligibility for September 2006, we determined the average net increase in monthly payments was about $310 (52.6-percent increase).

To determine whether OASDI underpayments were due the 10 SSI recipients, we computed the OASDI payments individuals were eligible to receive and SSI payments SSA made to these recipients. See Table 1 for the results of our computations.

Table 1: SSI Recipients Due for OASDI Payments

SSI Recipient OASDI Payments
Due SSI Payments Made OASDI Underpayments To Be Paid
A $41,709 $19,802 $21,896
B $58,771 $33,369 $25,363
C $39,783 $29,994 $9,751
D $17,280 $10,104 $7,170
E $19,202 $8,626 $10,565
F $57,536 $35,133 $22,370
G $10,277 $5,927 $4,345
H $16,840 $10,363 $6,473
I $8,786 $4,122 $4,662
J $8,834 $7,164 $1,660
Total $279,017* $164,604 $114,255
*Minor difference due to rounding.

Our calculations covered the period of OASDI eligibility from the date of disability onset, as indicated on the SSR, to September 2006. An earlier date of disability onset may have been established if eligibility had been determined under the OASDI program. An earlier onset date would have resulted in recipients being eligible to receive OASDI benefits sooner than the dates used in our calculations. Therefore, our calculations reflect the minimum amount of underpayments that may be due these recipients.

We determined SSI recipients were eligible for approximately $279,000 in OASDI benefits. These recipients had received approximately $165,000 in SSI payments during this period. After applying the applicable windfall offset, the total OASDI underpayments due recipients was at least $114,000.

We discussed our computations with staff from the Philadelphia Regional Center for Security and Integrity. They confirmed the 10 SSI recipients we reviewed had OASDI underpayments, and the underpayments were subject to offset. However, the results of computations completed by SSA staff were not the same as our computations. Agency staff provided different numeric values for the OASDI underpayments, SSI payments made, and OASDI underpayments due these 10 individuals. SSA considered existing overpayments when performing its calculations.

CONCLUSION AND RECOMMENDATION

Since SSI recipients represent some of the most vulnerable individuals SSA serves, we believe SSA should identify and pay recipients eligible for OASDI underpayments. We recommend SSA:

1. Determine whether the 5,908 SSI recipients are eligible for OASDI benefits as DAC and calculate the OASDI underpayments due the recipients, as appropriate.

2. Evaluate on-going efforts to identify individuals that may be eligible as DAC and determine whether these efforts should be expedited or expanded.

AGENCY COMMENTS

SSA agreed with our recommendations. The Agency also provided some technical comments that were incorporated into our final report. The text of SSA's comments is included in Appendix D.

Patrick P. O'Carroll, Jr.

Appendices

APPENDIX A - Acronyms
APPENDIX B - Scope and Methodology
APPENDIX C - Early Alert Memorandum
APPENDIX D - Agency Comments
APPENDIX E - OIG Contacts and Staff Acknowledgments

Appendix A
Acronyms

C.F.R. Code of Federal Regulations
DAC Disabled Adult Children
MBR Master Beneficiary Record
OASDI Old-Age, Survivors and Disability Insurance
POMS Program Operations Manual System
SSA Social Security Administration
SSI Supplemental Security Income
SSR Supplemental Security Record
U.S.C. United States Code

Appendix B
Scope and Methodology

To accomplish our objective, we:
Reviewed applicable Federal law 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) and Old-Age, Survivors and Disability Insurance (OASDI) programs.
Identified and reviewed prior relevant audits.
Interviewed Agency staff from the Office of Public Service and Operations Support, Division of Program Policy and Operations, Retirement and Survivor Insurance/Supplemental Security Income Analysis Branch; Philadelphia Regional Center for Security and Integrity; and Office of Quality Performance.
Examined information in the Supplemental Security (SSR) and Master Beneficiary Records (MBR) for selected SSI recipients.
Analyzed information for 10 SSI recipients to determine eligibility for OASDI benefits as "disabled adult children," (DAC) and the applicable OASDI underpayments and SSI "windfall offsets."

We obtained an electronic data extract identifying SSI recipients who were receiving SSI payments as of August 10, 2006, who had (1) attained age 18 on or after August 22, 1996; (2) established their dates of disability before age 22; and (3) received OASDI benefits as children. As of August 10, 2006, we identified 278,794 SSI recipients as meeting these criteria. To these 278,794 recipients, we applied the following additional screening requirements:
a date of disability established after attainment of age 18 but before age 22;
OASDI benefits were not being paid to the recipient;
an SSR with a date of disability onset after August 22, 1996,
an MBR identifying the recipient as terminated because of age attainment or student status (LAF T4 or T6);
an SSR that indicated OASDI benefits were not being paid;
an MBR that had the same beneficiary account number for multiple children; and
a parent currently receiving OASDI or who was deceased.

After applying the additional screening requirements, we identified 5,908 SSI recipients who appeared to be eligible for additional OASDI benefits. We selected a random sample of 200 from the population of 5,908 SSI recipients to determine whether these individuals appeared to be eligible for additional OASDI benefits as DAC. Based on our sample results, we estimate approximately 4,047 individuals appear to be eligible for OASDI benefits as DAC.

Attribute Appraisal: SSI Recipients
Total Population 5,908
Sample Size 200
Number of SSI Recipients Who Appeared to be Eligible in Sample 137
Projection of SSI Recipients Who Appeared to be Eligible in Population:
Lower Limit 3,707
Point Estimate 4,047
Upper Limit 4,363
We made all projections at the 90-percent confidence level.

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 were primarily extracted from the SSRs and MBRs. 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 SSRs and MBRs, as appropriate. Other tests we performed include
comparing data elements between the SSRs and MBRs 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's Headquarters in Baltimore, Maryland. The entity reviewed was the Office of the Deputy Commissioner for Operations. We performed our review from August through December 2006 in accordance with generally accepted government auditing standards.

Appendix C
Early Alert Memorandum

SOCIAL SECURITY

MEMORANDUM

Date: December 27, 2006

To: The Commissioner

From: Inspector General

Subject: EARLY ALERT- Supplemental Security Income Recipients Eligible as Disabled Children Under the Old-Age, Survivors and Disability Insurance Program (A 13-07-17073)

While conducting a review pertaining to Supplemental Security Income (SSI) recipients, we found a significant number of recipients may be eligible for Old-Age, Survivors and Disability Insurance (OASDI) benefits. As of December 2006, our analysis of information in the Social Security Administration's (SSA) Supplemental Security Records (SSR) and Master Beneficiary Records (MBR) found there were SSI recipients who received OASDI benefits as children who appeared to be eligible for additional OASDI benefits.

As of August 10, 2006, our examination identified 278,794 SSI recipients who had (1) attained age 18 on or after August 22, 1996; (2) dates of disability established before age 22; (3) received OASDI benefits as children; and (4) were receiving SSI payments. For these recipients, we applied additional screening requirements and found 5,908 individuals who appeared to be eligible for additional OASDI benefits. These individuals were receiving only SSI payments as of August 2006.

Of the 5,908 SSI recipients, we selected a random sample of 200 for review. We independently reviewed information, recorded as of September 2006, in the respective SSRs and MBRs for these recipients. Of the 200, we determined 137 (68.5 percent) met SSA's requirements for "disabled adult children" (DAC) under the OASDI program. This total excludes those SSI recipients we determined eligible for OASDI benefits, but would not receive OASDI payments because the recipients' parents (1) received the maximum OASDI payment allowable or (2) had disability insurance that did not allow payments to auxiliary beneficiaries.

Of the 137, we discussed our examination of 10 recipients with SSA staff. Office of Public Service and Operations Support staff confirmed all 10 individuals were eligible for OASDI benefits as DAC. Based on the results of our analysis, we estimate about 4,047 of the 5,908 SSI recipients we identified are eligible for OASDI benefits as DAC. As of December 8, 2006, the Agency's SSRs and MBRs indicated 7 (5.1 percent) of the 137 recipients we identified were receiving OASDI benefits as DAC.

We also computed OASDI underpayments for these 10 recipients in our sample of 200. These SSI recipients were selected because, if eligible as DAC under the OASDI program, they would receive a significant net increase in monthly payments. Based on the 10 recipients' eligibility for the month of September 2006, we determined the average increase in monthly payments is about $310. The average monthly SSI payment these recipients were receiving was $589. We determined the average monthly OASDI payment these individuals were eligible to receive was $899.

In addition, we determined the net OASDI underpayments due to the 10 SSI recipients totaled at least $114,000. We determined these SSI recipients were eligible for approximately $279,000 in OASDI benefits. These SSI recipients had received approximately $165,000 in SSI payments during this period. After applying applicable offsets, the total net OASDI underpayments were at least $114,000. We discussed our computations with staff from the Philadelphia Regional Center for Security and Integrity who confirmed the 10 SSI recipients we reviewed had OASDI underpayments and the underpayments were subject to offset.

On November 29, 2006, we met with Agency representatives to discuss our review and plans for further work. At that time, we were informed SSA had started a similar effort and was reviewing a sample of SSI recipients. We were provided information regarding SSA's selection of recipients who may be eligible for OASDI benefits. The Agency's selection methodology did not include all the screening requirements we used. We provided the Agency an electronic data file identifying the 5,908 individuals who met our screening requirements. Based on a preliminary review of our data, in December 2006, SSA staff reported about 30 percent of the recipients we identified were also identified by the Agency.

The group of individuals we detected warrants the Agency's immediate attention. Since these individuals are receiving SSI payments, they are among the most vulnerable beneficiaries SSA serves. We will complete our review and issue our report over the next few months. This memorandum is to alert the Agency about these individuals so that SSA can initiate corrective action while we are completing our audit.

We are available to assist the Agency as it proceeds in taking action to address this matter. Please let us know if other data is required for Agency action. If you have any questions concerning this matter, please contact me or have your staff contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410) 965 9700.

Patrick P. O'Carroll, Jr.

Appendix D
Agency Comments

SOCIAL SECURITY

MEMORANDUM

Date: March 30, 2007

To: Patrick P. O'Carroll, Jr.
Inspector General

From: Larry W. Dye

Subject: Office of the Inspector General (OIG) Draft Report, "Supplemental Security Income Recipients Eligible as Disabled Adult Children Under the Old-Age, Survivors and Disability Insurance Program" (A-13-07-17073)--INFORMATION

We appreciate OIG's efforts in conducting this review. Our comments on the draft report content and 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 extension 54636.

SSA Response

COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL (OIG) DRAFT REPORT, "SUPPLEMENTAL SECURITY INCOME RECIPIENTS ELIGIBLE AS DISABLED ADULT CHILDREN UNDER THE OLD-AGE, SURVIVORS AND DISABILITY INSURANCE PROGRAM" (A-13-07-17073)

Thank you for the opportunity to review and comment on the subject report. Our responses to the specific recommendations are provided below. We are also providing some technical comments that need to be made to enhance the accuracy of the report.

Recommendation 1

The Social Security Administration should determine whether the 5,908 Supplemental Security Income (SSI) recipients are eligible for Old Age Survivors and Disability Insurance (OASDI) benefits as Disabled Adult Children (DAC), and calculate the OASDI underpayments due the recipients as appropriate.

Response

We agree. The Office of Operations has recently identified a similar workload with much of the same criteria as that used to detect the 5,908 recipients included in this audit. We have already started working on 1,000 of these cases to ascertain their complexity. Following our review, we will release the entire universe of identified cases, including the 5,908 cases provided by OIG, through this audit. Our regions will then determine whether the SSI recipients are eligible for OASDI benefits as DACs and calculate the OASDI underpayments due the recipients, as appropriate.

Recommendation 2

SSA should evaluate on-going efforts to identify individuals that may be eligible as DAC and determine whether these efforts should be expedited or expanded.

Response

We agree. We will continue to pursue and evaluate efforts to identify individuals that may be eligible as DAC and determine whether the efforts should be expedited or expanded. In November 2006, SSA implemented systems enhancements to the Modernized Claims Systems which allow the application screens to do the following:
1) identify a child's potential entitlement to benefits on another Title II record, and
2) document a claimant's intent to file or pursue Title XVI benefits. These enhancements should assist claims representatives in identifying leads for Title XVI benefits and DAC eligibility under Title II.

In addition, SSA is formulating plans to implement systems enhancements to the Modernized Supplemental Security Income Claims System application. These enhancements will assist technicians in identifying situations in which potential eligibility to Title II benefits may exist. We hope to have these enhancements in place within the next fiscal year.

[In addition to the comments above, SSA provided some technical comments which have been addressed in this report.]

Appendix E
OIG Contacts and Staff Acknowledgments
OIG Contacts

Shirley E. Todd, Director, General Management Audit Division (410)-966-9365
Lance Chilcoat, Audit Manager, (410) 965-9743

Acknowledgments

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-13-07-17073.

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.