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The Supplemental Security Income Program

Good morning, Chairman Herger and Mr. Stark. It is a pleasure to participate in this important hearing on the SSI program. In 1997, the GAO designated SSI a high-risk program. Since then, SSA has taken several significant steps. As a result, GAO removed SSI from its high risk list in January 2003, noting improved financial integrity and management. Today, I will discuss SSI from two perspectives: management of the disability process and improper payments. I will also discuss the impact of the So,cial Security Protection Act of 2004.

Managing the disability process remains a major challenge for SSA, due to concerns about timeliness and quality of service. In her April 29 testimony, the Commissioner said SSA’s accelerated electronic disability system (AeDIB) will reduce delays. We are particularly interested in its electronic signature and system security implications and will continue monitoring this initiative closely. Fraud is another challenge to SSA’s disability programs. One great success is our collaboration with SSA in the Cooperative Disability Investigation (CDI) program . The CDI units are composed of IG special agents, SSA personnel and State or local law enforcement; CDI obtained evidence to resolve questions of disability fraud. Eighteen units have opened since 1998.

In the first half of fiscal year 2004, CDI saved SSA programs almost $64 million by identifying fraudulent claims. In fiscal year 2003, CDI saved almost $100 million. Since its inception, CDI has denied or terminated over 5,000 claims. For example, a California husband and wife stole $456,000 in SSI benefits and bilked $2 million from elderly victims. The woman was representative payee for her husband and children, who both received disability benefits for mental impairments, and CDI found each family member had several fictitious identities. The husband and wife received a 10-year prison sentence, and they must pay restitution in the amount of $1.5 million.

The second perspective from which we observe advances in the SSI program is improper payments, payments that should not have been made or that were made for incorrect amounts. The Committee on Ways and Means has been a key supporter of legislative initiatives related to prisoners, fugitives and representative payees; SSA has made progress in suspending benefits to prisoners. The SSA actuary estimated that $4.9 billion would be saved between calendar years 1995 and 2003 with the prisoner program.

Federal law also bars SSI for fugitive felons and for probation and parole violators. Our fugitive felon program assists law enforcement with locating and apprehending criminals, and SSI data contributed to arresting 3,300 fugitives in the first half of 2004 and over 19,000 arrests since the program’s inception in 1996. For example, 2 fugitive sweeps in Detroit resulted in over 200 felony arrests. We estimate SSA saved SSI $83.4 million between August of 1996 and February of 2003. The agency is currently attempting to recover another $207 million in overpayments made to fugitives.

Another concern is the representative payee program. If beneficiaries cannot manage their own benefits, SSA selects representative payees to do so. Over 5 million representative payees manage payments for nearly 7 million beneficiaries. Our audits of this program have identified deficiencies with financial management and accounting for benefit receipts and disbursements, vulnerabilities in safeguarding payments and poor monitoring and reporting of changes in beneficiary circumstances. We have recommended numerous corrective actions.

We have also opened over 3,800 investigations of representative payees, identifying over $32 million in fraud and resulting in 765 convictions. For example, an organizational representative payee called Payees ‘R’ Us handled about 200 beneficiaries. Its director embezzled over $107,000. After our investigation, she was sentenced to 10 months imprisonment and ordered to pay full restitution.

I would like to conclude by discussing the impact of the Social Security Protection Act. This milestone bill provides new safeguards for Social Security and SSI beneficiaries. It also enhances other program protections. For several years, we have assisted this Subcommittee in recommending measures embodied in the new law. It expands our Fugitive Felon Program by including Old-Age, Survivors and Disability Insurance (OASDI) beneficiaries and representative payees, and this could produce a fourfold increase in our fugitive felon workload. The new law also strengthens the representative payee program and our ability to deal with dishonest representative payees. I look forward to working with Congress and the Commissioner to help SSA meet this and other challenges. I would be pleased to answer any questions.

Date: May 20, 2004

OIG Official: Patrick P. O'Carroll, Jr., Acting Inspector General

Committee/Subcommittee: U.S. House of Representatives Committee on Ways and Means, Subcommittee on Human Resources

Link: /assets/uploads/2004-05-20_the-supplemental-security-income-program_patrick-p-ocarroll-jr.pdf

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