Social Security: 2008%20Top%20Management%20Issues

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SOCIAL SECURITY

MEMORANDUM

Date: November 28, 2007 Refer To:

To: The Commissioner

From: Inspector General

Subject: Top Issues Facing Social Security Administration Management—Fiscal Year 2008

The Reports Consolidation Act of 2000 requires that we summarize for inclusion in the Social

Security Administration’s (SSA) Performance and Accountability Report, our perspective on themost serious management and performance challenges facing SSA. We have determined that thetop management issues facing SSA in Fiscal Year 2008 are: Social Security Number Protection,Management of the Disability Process, Improper Payments and Recovery of Overpayments,Internal Control Environment and Performance Management, Systems Security and CriticalInfrastructure Protection, and Service Delivery and Electronic Government.

These areas are dynamic, so we encourage continuous feedback and additional areas to evaluate.Our summary of SSA’s progress in addressing these management issues will be included in theFiscal Year 2008 Performance and Accountability Report.

If you have any questions or need additional information, please call me or have your staff

contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410) 965-9700.

SPatrick P. O’Carroll, Jr.

Attachment

cc:David RustDavid Foster



Top Issues Facing

Social Security Administration

Management

Fiscal Year 2008



The Reports Consolidation Act of 20001 requires

that we summarize, for inclusion in the SocialSecurity Administration’s (SSA) Performance

and Accountability Report, our perspective onthe most serious management and performancechallenges facing SSA. Since 1997, we have

provided our perspective on these managementchallenges to Congress, SSA and other keydecisionmakers. In developing this year’s list,we considered

• the four initiatives SSA has identified aspriorities: Service, Stewardship, Solvency,and Staff;

• the most significant issues as outlined in thePresident’s Management Agenda (PMA);

• SSA’s progress in responding to the Office of Management and Budget’s (OMB) Scorecard;

• the Inspector General’s Strategic Plan;

• the high-risk list prepared by the GovernmentAccountability Office (GAO); and

• our body of audit and investigative work.

Finally, we prepared a crosswalk to ensure therewas no disconnect or gap among those reviewingSSA’s programs and operations.

Crosswalk of OIG Management Challenges to PMA, SSA’s Priorities, Social Security Advisory

Board, and GAO Challenges

PMA SSA

Priorities

OIG Major Management

Challenges

Social Security

Advisory Board

GAO Performance and

Accountability Challenges

ExpandedElectronic

Government

Service Service Delivery &Electronic Government

Management of theDisability Process

Service to thePublic

DisabilityReform

Service Delivery

Improve the DisabilityDetermination Service

Process and Return to Work

Disability Insurance—High Risk

ImprovedFinancial

Performance

CompetitiveSourcing

Budget andPerformanceIntegration

Stewardship

Solvency

Improper Payments &Recovery of Overpayments

Systems Security/CriticalInfrastructure Protection

Social Security NumberProtection

Internal ControlEnvironment and

Performance Management

Social SecurityNumber Case

Handling Quality

Social SecurityNumber Misuse

Supplemental SecurityIncome

Information Security—High Risk

StrategicManagement

of HumanCapital

Staff Service Delivery &Electronic Government

Staffing

Hiring

Training

Human Capital—High Risk

Fiscal Year 2008 Management Challenges 1

1 Pub. L. No. 106-531.



SOCIAL S ECURITY

N UMBER P ROTECTION

In FY 2006, SSA issued over 17 million

original and replacement Social Securitynumber (SSN) cards and receivedapproximately $620 billion in employmenttaxes related to earnings under assignedSSNs. Protecting SSNs and properly postingthe earnings reported under SSNs are criticalto ensuring individuals entitled to benefitsreceive the full benefits due them.

Efforts to Protect the Social Security

Number

The SSN has become a key to social, legal,and financial assimilation in this country.Because the SSN is so heavily relied on as anidentifier, it is also valuable as an illegalcommodity. Criminals improperly obtainSSNs by (1) presenting false documentation;(2) stealing another person’s SSN;(3) purchasing an SSN; (4) using the SSN of adeceased individual; or (5) contriving an SSNby selecting any nine digits.

To improve controls in its enumerationprocess, SSA verifies all immigrationdocuments before assigning SSNs tononcitizens. SSA also requires (1) mandatoryinterviews for all applicants for original SSNswho are age 12 or older (lowered from age18) and (2) evidence of identity for allchildren, regardless of age. In addition, SSAhas established Enumeration Centers inBrooklyn and Queens, New York; Las Vegas,Nevada; and Phoenix, Arizona, that focus

exclusively on assigning SSNs and issuingSSN cards—and it plans to open several morein the future. Finally, SSA requires that fieldoffice personnel processing SSN applicationsuse the Agency’s SS-5 Assistant , a MicrosoftAccess-based application intended to increasecontrol over the SSN application process,improve the quality of data used to assign an

SSN, and enable management to bettercontrol this workload. This program providesfield office personnel processing SSNapplications structured interview questionsand requires certain data to complete the

application process.

In addition to these improvements, SSA hasimplemented several enhancements that willbetter ensure SSN protection. Theseendeavors were required by the Intelligence

Reform and Terrorism Prevention Act of 2004

and include

• restricting the issuance of multiplereplacement SSN cards to 3 per year and10 in a lifetime;

• requiring independent verification of anybirth record submitted by an individual toestablish eligibility for an SSN, other thanfor purposes of enumeration at birth;

• coordinating with the Department of Homeland Security (DHS) and otheragencies to further improve the security of Social Security cards and numbers; and

• strengthening the standards andrequirements for identity documentspresented with SSN applications to ensurethe correct individual obtains the correctSSN.

We applaud the Agency for these efforts andbelieve it has made significant strides inproviding greater protection for the SSN.Nevertheless, incidences of SSN misusecontinue.




While SSA has implemented controls toprevent improper SSN assignment, we areconcerned the Agency has few mechanisms tocurb the unnecessary collection and use of SSNs. Our audit and investigative work have

taught us that the more SSNs areunnecessarily used, the higher the probabilitythat these numbers could be used to commitcrimes throughout society. We are alsoconcerned about the practice of assigningSSNs to noncitizens who will only be in theUnited States for a few months-but areallowed to obtain SSNs that are valid for life.We are currently examining the practice of allowing noncitizens who enter the countrywith a fiancé visa to obtain an SSN before

marriage.

To further enhance SSN integrity, we believeSSA should

• support legislation to limit public andprivate entities’ collection and use of SSNsand improve the protection of thisinformation when obtained,

• work with the Internal Revenue Service todevelop alternatives to assigning SSNs to

noncitizens who may only be in thecountry for a few months,

• continue its efforts to safeguard and protectpersonally identifiable information, and

• continue to coordinate with partneragencies to pursue any relevant datasharing agreements.

The Social Security Number and

Reported Earnings

Properly posting earnings ensures eligibleindividuals receive the full retirement,

survivor and/or disability benefits due them.If earnings information is reported incorrectlyor not reported at all, SSA cannot ensure allindividuals entitled to benefits are receivingthe correct payment amounts. In addition,SSA’s programs depend on earningsinformation to determine whether anindividual is eligible for benefits and tocalculate the amount of benefit payments.

SSA spends scarce resources correcting

earnings data when incorrect information isreported. The Earnings Suspense File is theAgency’s record of annual wage reports forwhich wage earners’ names and SSNs fail tomatch SSA’s records. As of October 2006,the Earnings Suspense File had accumulatedabout $586 billion in wages and 264 millionwage items for Tax Years 1937 through 2004.In Tax Year 2004 alone, the EarningsSuspense File grew by $66 billion in wagesand 9.5 million wage items.

While SSA has limited control over thefactors that cause erroneous wage reportssubmitted each year, there are still areaswhere the Agency can improve its processes.SSA can improve wage reporting byeducating employers on reporting criteria,identifying and resolving employer reportingproblems, encouraging greater use of theAgency’s employee verification programs,and enhancing the employee verificationfeedback to provide employers with sufficientinformation on potential employee issues.SSA also needs to coordinate with otherFederal agencies with separate, yet related,mandates, such as the Internal RevenueService and DHS.




In our audits, we have encouraged SSA toincrease collaboration with the IRS to achievemore accurate wage reporting, including caseswhere earnings are disclaimed by individualsand need to be removed from SSA and

Internal Revenue Service records. Both theInternal Revenue Service and SSA haveencountered cases where the name and SSNcombination is correct and the wages areposted to an earner’s record only to learn thatthe SSN owner did not work for the employerand is the victim of SSN misuse. In othercases, the earners reported fraudulent incomein an attempt to gain SSA and/or InternalRevenue Service benefits. SSA needs toensure it works closely with the Internal

Revenue Service to remove such wages to(1) assist the SSN owners with earningsdiscrepancies, (2) minimize improper InternalRevenue Service tax assessments, and(3) reduce the chance of improper SSA andInternal Revenue Service payments based onincorrect information.

We have also encouraged greatercollaboration with DHS on some of theseemployer and verification issues. Forexample, in a September 2006 audit, weidentified vulnerabilities in DHS’Employment Eligibility Verification Systemor eVerify (formerly the Basic Pilot) andnoted that coordination between DHS, SSA,and Internal Revenue Service would lead tomore effective controls to minimize thepotential misuse of this program. In the pastyear, SSA has met with DHS officials todiscuss these issues and assist in thedevelopment of controls to protect sensitivedata.

MANAGEMENT OF THE

DISABILITY PROCESS

SSA needs to continue to improve criticalparts of the disability process, such as making

timely disability decisions and safeguardingthe integrity of its disability programs.Modernizing Federal Disability Programs hasbeen on GAO’s high-risk list since 2003 due,in part, to outmoded concepts of disability,lengthy processing times, and inconsistenciesin disability decisions across adjudicativelevels and locations. The Federal DisabilityPrograms include SSA’s disability programsas well as the Department of Veterans Affairsdisability program.

At the forefront of congressional and Agencyconcern is the timeliness of SSA’s disabilitydecisions at the hearings adjudicative level.The average processing time at the hearingslevel continues to increase—from 293 days inFiscal Year (FY) 2001 to an estimated 512days in FY 2007. Additionally, the hearingspending workload continues to increase. Atthe end of FY 2007, the preliminary pendingworkload was 746,744 cases—up from

392,387 cases in FY 2001.

As of May 2007, all State DisabilityDetermination Services (DDS) and Offices of Disability Adjudication and Review (ODAR)are processing disability claims using theelectronic folder. Processing disability claimselectronically should reduce processingdelays caused by organizing, mailing,locating, and reconstructing paper folders.

In August 2006, SSA implemented the

Disability Service Improvement initiative inthe Boston region—making significantchanges in the Agency’s disability programs,such as:




• A Quick Disability Determination processfor individuals who are obviously disabled;

• A Medical-Vocational Expert System toenhance the quality and availability of the

expertise needed to make accurate andtimely decisions at all adjudicative levels;

• A Federal Reviewing Official to reviewinitial level decisions upon the request of the claimant;

• Closing the record after the AdministrativeLaw Judge issues a decision— allowingfor the consideration of new and materialevidence only under very limitedcircumstances; and

• A Decision Review Board to reviewAdministrative Law Judge decisions andpolicies and procedures throughout thedisability adjudication process.

The Quick Disability Determination processhas shown success. By using a computermodel, cases are identified where theindividuals are obviously disabled and arelikely to be allowed. The DDSs issued

decisions on 97 percent of the Quick Disability Determination cases within therequired 20 days with a mean decision time of 11 days. However, there are areas of Disability Service Improvement that havebeen identified as not performing as expected.SSA has taken steps to make corrections inthese areas.

In light of the growing backlog of disabilitycases at SSA, the Commissioner of Social

Security recently announced additionalinitiatives in an effort to reduce the hearingsbacklog by FY 2012. Many of theseinitiatives are either ongoing or anticipated tobegin within the next few months. TheCommissioner’s initiatives focus on four mainareas:

• Compassionate allowances where SSAplans to build on the success of the Quick Disability Determination by increasingallowances on cases where disability isobvious.

• Improved hearing office procedures

focused on accelerated and expandedefforts to address cases that have beenwaiting 1,000 days or more for a hearing –with the goal of having these cases to anegligible level by the end of FY 2007.

• Increased adjudicatory capacity whichincludes filling hearing dockets of currentALJs to capacity by increasing staff overtime, hiring approximately 150 ALJsand 600 to 700 additional support staff,streamlining folder assembly, and usingpersonnel from other SSA components toassist the most affected hearing offices.

• Using automation and business

processes such as the installation of videoequipment in all hearings offices toimprove case processing at all adjudicativelevels.

The Commissioner has proposed to amendSSA’s regulations to (1) extend the Quick Disability Determination process to all DDSsand to remove the requirement that each casereferred under Quick DisabilityDetermination be adjudicated within 20 daysand (2) suspend the review of new claims tothe Federal Reviewing Official level and toremove the Medical Vocational ExpertSystem/Office of Medical and VocationExpertise from the disability adjudication

process for new claims.




Disability Fraud

Fraud is an inherent risk in SSA’s disabilityprograms. Some unscrupulous people viewSSA’s disability benefits as money waiting to

be taken. A key risk factor is individuals whofeign or exaggerate symptoms to becomeeligible for disability benefits. Another keyrisk factor is the monitoring of medicalimprovements for disabled individuals toensure those individuals who are no longerdisabled are removed from the disability rolls.

We continue to work with SSA to address theintegrity of the disability programs throughthe Cooperative Disability Investigations

program. The Cooperative DisabilityInvestigations program’s mission is to obtainevidence that can resolve questions of fraud inSSA’s disability claims. The CooperativeDisability Investigations program is managedin a cooperative effort between SSA’s Officesof Operations, Inspector General, andDisability Programs. Since the program’sinception in FY 1998 through May 2007, the19 Cooperative Disability Investigationsunits, operating in 17 States, have beenresponsible for over $813 million in projectedsavings to SSA’s disability programs and over$493 million in projected savings to non-SSAprograms.

IMPROPER PAYMENTS AND

RECOVERY OF

OVERPAYMENTS

Improper payments are defined as any

payment that should not have been made orwas made in an incorrect amount understatutory, contractual, administrative, or otherlegally applicable requirements. Examples of improper payments include payments made toineligible recipients, duplicate payments, andpayments that are for the incorrect amount.Furthermore, the risk of improper paymentsincreases in programs with a significantvolume of transactions, complex criteria forcomputing payments, and an overemphasis on

expediting payments.

SSA and the OIG have discussed such issuesas detected versus undetected improperpayments and avoidable versus unavoidableoverpayments that are outside the Agency’scontrol and a cost of doing business. OMBissued specific guidance to SSA to onlyinclude avoidable overpayments in itsimproper payment estimate because thosepayments can be reduced through changes in

administrative actions. Unavoidableoverpayments that result from legal or policyrequirements are not to be included in SSA’simproper payment estimate.

The President and Congress continue toexpress interest in measuring the universe of improper payments in the Government. InAugust 2001, OMB published the President’sManagement Agenda, which included aGovernment-wide initiative for improving

financial performance, including reducingimproper payments. The Improper PaymentsInformation Act of 2002 was enacted inNovember 2002, and OMB issued guidance inMay 2003 on implementing this law. InAugust 2006, OMB updated and revised thisguidance. Significant updates to the guidanceinclude new language to clarify the definition




of an improper payment and clarification of OMB’s authority to require that agenciestrack programs with low error rates (that is,less than 2.5 percent) but significant improperpayment amounts.

In FY 2006, SSA issued over $575 billion inOASDI and SSI benefit payments to about 53million people—and some improperpayments are unavoidable. Since SSA isresponsible for issuing timely benefitpayments for complex entitlement programsto millions of people, even the slightest errorin the overall process can result in millions of dollars in over- or underpayments.

In January 2007, OMB issued a reportImproving the Accuracy and Integrity of Federal Payments that noted that eightFederal programs—including SSA’s OASDIand SSI programs—accounted for more than89 percent of the improper payments in FY2006. However, this report also noted that theOASDI error rate dropped by one-tenth of 1percent which translated to a $401 millionreduction in improper payments.

SSA has been working to improve its ability

to prevent over- and underpayments byobtaining beneficiary information fromindependent sources sooner and usingtechnology more effectively. For example, theAgency is continuing its efforts to preventpayments after a beneficiary dies through theuse of Electronic Death Registrationinformation. Also, the Agency’s continuingdisability review process is in place toidentify and prevent beneficiaries who are nolonger disabled from receiving payments.

In April 2006, we issued a report onoverpayments in SSA’s disability programswhere we estimated that SSA had not detectedabout $3.2 billion in overpayments fromOctober 2003 through November 2005 as a

result of conditions that existed as of October2003 or earlier. We also estimated that SSApaid about $2.1 billion in benefits annually topotentially ineligible beneficiaries. Morerecently, in the second quarter of FY 2007,SSA detected about $293.7 million in newoverpayments under its Disability Insuranceprogram.

We will continue to work with SSA toidentify and address improper payments in itsprograms. For example, in our November2006 review, Title II Disability InsuranceBenefits with a Workers’ CompensationOffset, we found that the percentage of payments in error identified in this reportdeclined significantly when compared to thepercentage we reported in our prior Workers’Compensation Offset audits. However,although there has been improvement inreducing improper payments due to workers’compensation, we still identified about25,377 disability insurance claims totalingapproximately $149 million that had paymenterrors. SSA agreed to implement the fiverecommendations we made regarding thisworkload.




INTERNAL CONTROL

ENVIRONMENT AND

PERFORMANCE

MANAGEMENT

Sound management of public programsincludes effective internal control andperformance management. Internal controlcomprises the plans, methods and proceduresused to meet missions, goals and objectives.SSA management is responsible forestablishing and maintaining internal controlsto achieve the objectives of effective andefficient operations, reliable financialreporting and compliance with applicable

laws and regulations. Similarly, SSAmanagement is responsible for determiningwhether the programs it manages achieveintended objectives.

OMB Circular A-123 requires that SSAdevelop and implement cost-effective internalcontrols for results-oriented management.Internal controls are important when SSAworks with third parties to help complete itsimportant workloads. For example, disabilitydeterminations under Disability Insurance andSupplemental Security Income are performedby DDSs in each State. DDSs are responsiblefor determining claimants’ disabilities andensuring adequate evidence is available tosupport its determinations. SSA reimbursesthe DDS for 100 percent of allowableexpenditures up to its approved fundingauthorization. We conduct audits of stateDDSs to ensure the costs they claimed areallowable, and the DDSs have proper internalcontrols over the accounting and reporting of

the administrative costs SSA reimburses.

From FY 2000 through September 2007, weconducted 61 DDS administrative cost audits.In 32 of the 61 audits, we identified internalcontrol weaknesses and over $110 million inquestioned costs and/or funds that could be

put to better use. Fourteen of the 61 auditsconducted were completed in FY 2007. Sixof these reports noted similar controlweaknesses identified in DDS audits inprevious years and over $28 million of questioned costs and/or funds that could beput to better use. We believe the large dollaramounts claimed by State DDSs and thecontrol issues we have identified warrant thatthis issue remains a major managementchallenge.

Another area that involves third parties andrequires effective internal controls is theselection and oversight of contractors.Contracting is increasingly seen as aneffective way to support Federal agencies inmanaging increasing workloads withdiminished levels of staff. In FY 2006, SSAspent over $820 million on contracts. We willreview multiple contracts in FY 2008 toensure SSA is getting the services it is paying

for and that SSA has proper internal controlsin place to ensure effective oversight of contractors.




Multiple initiatives have highlighted theimportance of performance management. TheGovernment Performance and Results Actrequires that SSA develop multi-year strategicand annual performance plans that establish

its strategic and performance goals. ThePMA has focused on the integration of thebudget and performance measurementprocesses. The PMA calls for agencies toidentify high quality outcome measures,accurately monitor program performance, andintegrate this presentation with associatedcosts. OMB developed the ProgramAssessment Rating Tool to identifygovernment programs’ strengths andweaknesses and inform funding and

management decisions aimed at making theprograms more effective. The ProgramAssessment Rating Tool includes a review of multiple factors that affect and reflectperformance including program purpose anddesign; performance measurement,evaluations, and strategic planning; programmanagement; and program results. In FY2008, we will continue to assess SSA’s abilityto manage performance and meet the goalsestablished to accomplish SSA’s mission andserve the American public.

SYSTEMS SECURITY AND

CRITICAL

INFRASTRUCTURE

PROTECTION

The vulnerability of critical infrastructuresand the unique risks associated withnetworked computing have been recognizedfor some time. Federal Agencies rely heavilyon information technology to run their dailyoperations and deliver products and services.With an increasing reliability on informationtechnology, a growing complexity of Federalinformation technology infrastructure, and aconstantly changing information security

threat and risk environment, informationsecurity has become a mission-essentialfunction. This function must be managed andgoverned to reduce the risks to Federaloperations and to ensure the Government’sability to do business and serve the Americanpublic.

Federal agencies maintain significant amountsof information concerning individuals knownas personally identifiable information. Theloss of personally identifiable information canresult in substantial harm, embarrassment, andinconvenience to individuals and may lead toidentity theft or other fraudulent use of theinformation. Agencies have a special duty toprotect that information from loss and misuse.OMB issued three memorandums in FY 2006regarding the protection of personallyidentifiable information.




SSA’s information security challenge is tounderstand and mitigate systemvulnerabilities. At SSA, this means ensuringthe security of its critical informationinfrastructure and sensitive data. A recent

incident of the massive loss of personallyidentifiable information of a Federal agencydemonstrates the importance of data security.The public will be reluctant to use electronicaccess to SSA services if it does not believethe Agency’s systems and data are secure.Without due diligence, sensitive informationcan become available to those who are notentitled to it and may use it for personal gain.To address increasing workloads and thechanging work environment, SSA constantly

introduces new technologies, such as theInternet Protocol version 6 (IPv6) and VoiceOver Internet Protocol (VoIP). Newtechnology often brings advantages but alsopresents new security challenges. SSA needsto understand and address potential risksbefore such technology is implemented.

SSA addresses critical informationinfrastructure and systems security in avariety of ways. For example, it has created a

Critical Infrastructure Protection work groupthat works toward compliance with variousdirectives, such as the Homeland SecurityPresidential Directives (HSPD) and theFederal Information Security ManagementAct of 2002 (FISMA). SSA created pages onits Intranet site on how to properly protect PII.In addition, SSA plans to minimize the risksassociated with a single, national computingfacility by acquiring a second, fullyfunctional, co-processing data center.

HSPD 12 mandates the development of acommon identification standard for allFederal employees and contractors. FederalInformation Processing Standard 201, entitledPersonal Identity Verification (PIV) of

Federal Employees and Contractors, wasdeveloped to satisfy the requirements of HSPD 12. SSA worked with other agenciesand OMB to address HSPD 12 and complywith PIV I. To date, the HSPD 12 identityproofing has been completed for allemployees. Registration and issuance of HSPD 12 credentials is in the rollout phase inHeadquarters as well as in Region 2.

Under FISMA, we annually evaluate SSA’s

security program. FISMA requires Agenciesto institute a sound information securityprogram and framework. Since the inceptionof FISMA, we have worked with the Agencyto ensure prompt resolution of security issues.The House Government Reform Committeerated the Agency “A” in 2006 on computersecurity based on its compliance with FISMA.

We continuously monitor the Agency’sefforts to protect PII as well as its

implementation of new technology, such asIPv6 and VoIP, to ensure the informationsecurity program is operating effectively.




SERVICE DELIVERY AND

ELECTRONIC

GOVERNMENT

One of SSA’s goals is to deliver high-quality,

“citizen-centered” service. This goalencompasses traditional and electronicservices to applicants for benefits,beneficiaries and the general public. Itincludes services to and from States, otheragencies, third parties, employers and otherorganizations, including financial institutionsand medical providers. This area includessuch areas as the Medicare Prescription DrugProgram, the Representative Payee Process,Electronic Government and Managing Human

Capital.

Medicare Prescription Drug Program

The Medicare Prescription Drug,

Improvement and Modernization Act of 2003 requires that SSA undertake severalMedicare-related responsibilities. Thisincludes making initial low-income subsidydeterminations under Medicare Part D,establishing appeals procedures for subsidy

eligibility determinations, and periodicallyreviewing income and resources to verifycontinued eligibility.

By February 2007, SSA had rendered over4.6 million low-income subsidy eligibilitydecisions, awarding subsidies toapproximately 2.1 million applicants anddenying subsidies to approximately2.5 million applicants. Approximately80,000 individuals whose applications for lowincome subsidy were denied by SSA,appealed those denial decisions.

Representative Payee Process

When SSA determines a beneficiary cannotmanage his or her benefits, SSA selects arepresentative payee who must use thepayments for the beneficiary’s interests. SSA

reports there are approximately 5.3 millionrepresentative payees who manage about$49.9 billion in annual benefit payments forapproximately 7.1 million beneficiaries.While representative payees provide a

valuable service for beneficiaries, SSA mustprovide appropriate safeguards to ensure theymeet their responsibilities to the beneficiariesthey serve. In addition, the Social SecurityProtection Act of 2004 requires that SSAconduct periodic site reviews of certain typesof representative payees. As of June 2007,SSA staff reports that approximately2,800 organizational representative payeesserving 50 or more beneficiaries,370 individual payees serving 15 or more

beneficiaries, and 1,060 representative payeeswho are authorized to collect a fee are subjectto these periodic reviews. During thesereviews, SSA assesses the representativepayee’s performance by examiningbeneficiaries’ records, reviewing therepresentative payee’s financial records, andinterviewing beneficiaries. Finally, if arepresentative payee is problematic or SSAsuspects representative payee misuse of benefits, it will request an audit orinvestigation by our Office.

In a July 2007 study of individualrepresentative payees serving 14 or fewerbeneficiaries and non-fee-for-serviceorganizational payees serving fewer than50 beneficiaries, the National Academy of Sciences (NAS) reported that SSA shouldtake steps to better prevent and detect misuseof beneficiary funds. In addition, NASconcluded that SSA’s current methods todetect misuse of benefits are not reliable. As

such, the NAS recommended that SSAconduct targeted reviews of thoserepresentative payees most likely to misusebenefits. NAS estimated this approach wouldidentify about 7,000 cases of misuse andanother 7,000 cases of possible misuse. Toidentify those representative payees mostlikely to commit misuse, we are planning a




review to determine whether certaincharacteristics of representative payees—asidentified by NAS—result in an increased risk of misuse. In addition, we are planning areview of individual representative payees

who act as organizations or operate “grouphomes,” which NAS believes need morethorough monitoring.

Electronic Government

Electronic Government has changed the waygovernment operates and the way citizensrelate to Government. Americans are takingadvantage of e-Government services offeredto them. In the near future, SSA expects toprovide cost-effective e-Government services

to citizens, businesses and other governmentagencies that will allow them to easily andsecurely transact most of their business withSSA electronically. SSA has five goals insupport of this vision.

1. Offer citizens the e-Government servicesthey want and need.

2. Protect on-line security and privacy andthe integrity of the SSA benefit payment

process.

3. Pursue e-Government partnerships andcollaborations with other governmentagencies and private sector organizations.

4. Implement e-Government programs thatoffer sound business case justification.

5. Align the organization and invest inhuman capital to maximize e-Governmentprogress.

SSA’s e-Government strategy is based on thedeployment of high volume, high payoff applications for both the public and theAgency’s business partners. To meetincreasing public demands, SSA has pursueda portfolio of services that include on-line and

voice-enabled telephone transactions toincrease opportunities for the public toconduct SSA business electronically in aprivate and secure environment.

Managing Human Capital

SSA, like many other Federal agencies, isbeing challenged to address its human capitalshortfalls. As of January 2007, GAOcontinued to identify strategic human capitalmanagement on its list of high-risk Federalprograms and operations. GAO initiallyidentified strategic human capitalmanagement as high-risk in January 2001. Inaddition, Strategic Management of HumanCapital is one of five Government-wide

initiatives contained in the PMA.

By the end of 2012, SSA projects itsDisability Insurance rolls will have increasedby 35 percent. Further, by FY 2015, 54percent of current SSA employees will beeligible to retire. This will result in a loss of institutional knowledge that will affect SSA’sability to deliver quality service to the public.This, combined with the workload increaseand the incredible pace of technological

change, will have a profound impact on thepublic’s expectations and SSA’s ability tomeet those expectations.

SSA’s service and staffing challenges must beaddressed by succession planning, strongrecruitment and retention efforts, increasedtraining, and the effective use of technology.As of June 30, 2007, SSA had scored “green”in “Current Status” and “Progress inImplementing the President’s Management

Agenda” in Human Capital on the ExecutiveBranch Management Scorecard. Thescorecard tracks how well the departmentsand major agencies are executing the fivegovernment-wide management initiatives.


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Social Security: 2008%20Top%20Management%20Issues