Audit of the County of Los Angeles Review to Identify
and Report to SSA Past Deficiencies for Title II and Title XVI
Children in Foster Care A-09-97-61002 - 8/11/97
This is the last of three reports to be issued in response to a
request from the Social Security Administration (SSA) that we review
operations of the Department of Children and Family Services (DCFS),
County of Los Angeles, California. The objective of this audit was
to determine if DCFS adequately reviewed its records to identify
and report to SSA children who were no longer in its custody and
children who received title XVI (Supplemental Security Income) benefits
but had resources exceeding the program limit of $2,000. We found
that DCFS performed an adequate review to identify and report these
events to SSA.
In April 1996, the Deputy Commissioner for Programs, Policy, Evaluation,
and Communications requested that the Office of the Inspector General
review the representative payee (payee) activities of DCFS. Specifically,
SSA asked us to determine if:
- changes made by DCFS were sufficient to permit SSA to continue
relying on the agency as a payee;
- deficiencies in DCFS record keeping as representative payee
for title II (Old-Age, Survivors and Disability Insurance) and
title XVI beneficiaries were identified and corrected; and
- SSAs instructions to DCFS regarding payee issues were adequate.
DCFS acts as payee for children who receive Social Security benefits
and are in the Countys foster care program. In 1995, DCFS began
an internal review of its operations. This review disclosed that
SSA was not always informed when children were no longer in the Countys
foster care program. When children leave the care and control of
the program, the County is no longer providing for the living expenses
of the children and, therefore, should not continue to receive Social
Security benefits. Unless SSA is promptly notified, Social Security
benefits paid for the care of these children are allowed to accumulate
in the Countys bank account. SSA is unaware of when children
leave the Countys program until either DCFS reports the information
or new representative payees request to receive the childrens
benefits. In addition, DCFS determined that account balances for
children were not monitored. As a result, some childrens account
balances exceeded the $2,000 resource limit under the title XVI program.
Generally, children under title XVI with countable resources in excess
of $2,000 are not entitled to benefits. Based on its internal review,
DCFS voluntarily returned over $1 million to SSA, representing benefits
received for children who were not in the Countys care and
conserved funds in excess of the $2,000 title XVI resource limit.
We performed two other audits at DCFS. The first report concluded
that the changes DCFS made to its operations allow SSA to rely on
DCFS as a payee and that SSAs instructions to DCFS were adequate.
The second report concluded that DCFS adequately accounted for receipts
and disbursements of Social Security benefits paid to children. However,
we determined that DCFS did not credit childrens account balances
with the interest earned on their funds. We also requested a legal
opinion concerning the practice of depositing benefits into a pooled
bank account as opposed to maintaining separate accounts for each
beneficiary. The second report will be issued on receipt of the legal
We conducted our review in accordance with generally accepted government
auditing standards. Our objective was to determine if DCFS performed
an adequate review to identify and report to SSA, children who were
not in its custody and title XVI beneficiaries who had resources
in excess of the $2,000 program limit.
To determine if DCFS notified SSA of all the children that left
its custody, we verified that all children for whom DCFS was the
payee for Social Security benefits were in the Countys foster
care program. These children were identified through an extract we
obtained from SSAs Master Beneficiary Record (title II) and
Supplemental Security Income Record (title XVI). We used DCFS direct
deposit account number to identify these children. This extract provided
us with 1,197 records of children in current payment status as of
August 1996 and 60 records of children in suspense payment status.
The children were placed in suspense status between June 1991 and
August 1996 and remained in that status through August 1996. We also
identified one child for whom DCFS received benefits by check.
We obtained DCFS management information queries for all children
that showed whether the children were in DCFS custody. These
queries identified the custody of the children in current pay status
as of November 1996 and the children in suspense status as of February
1997. For those children that were out of DCFS custody, we
reviewed SSAs management information queries and childrens
case files at DCFS to determine if DCFS notified SSA of the events.
We also discussed the whereabouts of children with DCFS and SSA officials.
To determine if DCFS notified SSA when title XVI beneficiaries resources
exceeded the program limit of $2,000, we reviewed management information
reports issued by DCFS for the month of February 1997 and discussed
the procedures used to monitor the resource levels with DCFS officials.
The work was performed in the County of Los Angeles and Richmond,
California. The field work was conducted from November 1996 through
RESULTS OF AUDIT
Our review disclosed that DCFS had performed an adequate review
to identify and report to SSA past events that should have been reported.
DCFS notified SSA of all but 3 of 134 children who were no longer
in its custody. In addition, DCFS reported all but one of the title
XVI beneficiaries who had resources in excess of the program limit
of $2,000. As a result of our audit, DCFS reported the four events
to SSA. We have no recommendations.
David C. Williams
MAJOR CONTRIBUTORS TO THIS REPORT
Office of the Inspector General
Bill Fernandez, Director, Program Audits (West)
Jim Harris, (Acting) Team Leader
Jim Sippel, Senior Auditor
Carmen Chu, Auditor
Nellie Wong, Auditor