Social Security Administration
Office of The Inspector General
Mission Statement
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.
Vision and Values
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.
Semiannual Report to Congress
October 1, 2007 — March 31, 2008
Message from the Inspector General
A Message from the Inspector General
This year, the Inspector General community marks its 30th year of service under
the Inspector General Act of 1978, which established our offices as an
independent and objective means of maintaining public accountability and increasing
transparency in the Executive Branch. Since its inception in 1995,
the Social Security Administration Office of the Inspector General has never
lost sight of this core mission, developing new and innovative approaches to
long-standing problems—and informing public policy decision-making to avoid
new ones.
Nevertheless, we have as our unique challenge oversight of the largest social
insurance program in the world, serving more than 50 million people annually.
This office strives to assess the Agency’s ability to
provide timely and accurate customer service, while at the same time ensuring
good stewardship of taxpayer funds.
This delicate balancing act has taken on a new urgency as my office, along
with SSA and Congress, wrestle with how best to reduce a growing backlog of
appealed disability claims. In
February 2008, I testified before a subcommittee of the House Appropriations
Committee on this issue, describing our initiatives focused on this vexing problem—and
many of those are
detailed within this report. We have conducted reviews and audits of SSA’s
disability program structure and operations, making recommendations for changes.
Moreover, our Cooperative
Disability Investigative Program continues to be an important part of the solution
by assisting disability examiners and administrative law judges in making accurate
claims decisions.
The key to my office’s ability to effectively address this and all of
our many initiatives has been a cadre of talented and knowledgeable employees,
and I would like to express my gratitude to
them for their unwavering dedication to the mission. Finally, I must express
my appreciation to our partners in the Social Security Administration and the
Congress for their support and
cooperation in our continued efforts to serve the American public by improving
and protecting Social Security programs for future generations.
Patrick P. O’Carroll, Jr.
Inspector General
Semiannual Report to Congress
October 1, 2007 — March 31, 2008
Social Security Administration
Office of the Inspector General
Contents
A Message from the Inspector General.........................1
Executive Summary................................................................5
Introduction to Our Organization...............................6
Impact..........................................................................................8
Value.........................................................................................19
People........................................................................................29
Reporting Requirements and Appendices.....................35
Glossary of Acronyms.........................................................53
Executive Summary
With this report, the Social Security Administration (SSA), Office of the Inspector
General (OIG) proudly presents
its accomplishments from October 1, 2007 – March 31, 2008.
The sections of this report correspond to the three major goals—
impact, value, and people—set forth in the OIG Strategic Plan: Fiscal Years
2006 – 2010. Highlights of our many noteworthy
achievements in audit, investigations, and legal counsel appear in each of these
categories as follows.
Impact
We work to have a positive impact on SSA programs and operations by enhancing
their integrity, efficiency, and effectiveness.
Toward this goal, we received more than 52,000 allegations from SSA employees,
the Congress, the public, law enforcement
agencies, and other sources during the first half of Fiscal Year (FY) 2008.
During this period, our agents closed more than
5,400 criminal investigations, with over 1,000 arrests, over 600 indictments
and informations, and more than 1,100 criminal
prosecutions, and civil monetary penalty (CMP) assessments. Our Cooperative
Disability Investigative (CDI) Program
continues to be one of our most successful initiatives, contributing to the
integrity of SSA’s disability programs. During this
reporting period, the efforts of our CDI Units resulted in more than $106 million
in SSA program savings.
Our auditors also had a significant impact during this reporting period, issuing
40 reports and making recommendations on a
wide variety of challenges facing the Agency. Our audit work over the past 6
months includes a review of SSA’s administrative
law judges’ (ALJ) caseload performance to measure its impact on the projected
hearing requests over the next 5 years. In addition,
in an ongoing effort to improve the integrity of the Social Security number
(SSN), our auditors reviewed the effectiveness of SSA’s
internal controls for issuing SSN Verification Printouts, a process intended
to allow numberholders to obtain documentation
of their SSNs. Our auditors also followed up on a previously issued audit to
assess the Enumeration at Entry process.
Value
Our organization strives to provide valuable products and services in a timely
manner to Congress, SSA and other key decision-
makers while sustaining a positive return for each tax dollar invested in OIG
activities. During this reporting period, our auditors
identified more than $630 million in questioned costs and over $309 million
in Federal funds that could be put to better
use. Highlighted audits include a review of SSA’s effectiveness in verifying
income and resources for individuals applying for
the new Medicare Part D prescription drug program, and an assessment of SSA’s
ability to effectively adjust monthly benefits
for beneficiaries who were entitled to both retirement and disability benefits
before full retirement age.
In the first half of FY 2008, we are reporting over $200 million in investigative
accomplishments, with over $38 million in
SSA recoveries, restitution, fines, settlements, and judgments; and over $162 million
in projected savings from investigations
resulting in the suspension or termination of benefits. In addition, we participated
in multi-agency investigations that resulted in over $18
million in savings, restitution, and recoveries for other agencies. Highlighted
investigations in this section revealed evidence of disability
program fraud, representative payee fraud, and SSN misuse.
During this reporting period, our attorneys initiated 273 CMP actions (Section
1129 cases) that involved false statements or
representations made in connection with obtaining or retaining benefits or payments
under Titles II and XVI of the Social Security
Act (the Act). Included in our investigative accomplishments above is over $3
million in penalties and assessments that our attorneys
imposed through our CMP program.
People
The collective effort of our employees continues to be the driving force behind
this organization’s success in meeting its mission.
We provide an encouraging and rewarding work experience with the goal of retaining
these exceptional individuals. OIG leadership
fosters an environment where employees can realize their potential through training
and developmental programs. Each year, OIG
components convene training conferences to inform their employees about new
procedures at various levels of our organization. In addition,
the OIG Organizational Health Committee assesses employee satisfaction levels
and addresses employee concerns. Further during
this reporting period, the OIG implemented its first Leadership Development
Program to prepare qualified OIG employees for future
leadership positions.
As is reflected in our significant accomplishments, we never waver in our dedication
to our core mission of inspiring
public confidence by detecting and preventing fraud, waste, and abuse in SSA’s
programs and operations. We will continue to work with
our partners in SSA, the Congress, and other Federal agencies to ensure the
integrity and reliability of the Social Security programs
upon which so many Americans depend for their economic security.
Introduction to Our Organization
The SSA OIG comprises the Immediate Office of the Inspector General and four
major components: the Offices of Audit,
Investigations, Resource Management, and the Chief Counsel to the Inspector
General.
Immediate Office of the Inspector General (IO)
IO provides the Inspector General with staff assistance on the full range of
his responsibilities. IO staff provides liaison
with all agencies sharing common interests with OIG and ensures coordination
with Congressional committees, SSA, the Social
Security Advisory Board, and the President’s Council on Integrity and Efficiency.
IO also includes the Office of Quality Assurance and
Professional Responsibility (OQAPR), which is responsible for two critical functions.
First, it conducts exhaustive reviews of each of the
OIG’s component offices to ensure compliance with Federal laws and regulations,
Agency policies, and relevant professional standards.
OQAPR also conducts thorough and timely investigations should allegations of
misconduct be lodged against an OIG employee.
Office of Audit (OA)
OA conducts and supervises financial and performance audits of SSA programs
and operations, and makes recommendations to
ensure that program objectives are achieved effectively and efficiently. Financial
audits determine 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
other projects on issues of concern to SSA, the Congress, and the general public.
Office of Investigations (OI)
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,
and third parties, as well as by SSA employees
while performing their official duties. This office serves as OIG’s liaison
to the DOJ on all matters relating to the investigation 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)
OCCIG provides independent legal advice and counsel to the Inspector General
on a wide range of issues, including statutes,
regulations, legislation, and policy directives. OCCIG administers the CMP program,
and advises the Inspector General on investigative
procedures and techniques, as well as on legal implications and conclusions
to be drawn from audit and investigative material. In addition,
OCCIG manages OIG’s external and public affairs program, preparing OIG
publications and handling Congressional, media, and
public requests for information.
Office of Resource Management (ORM)
ORM provides administrative and management support to the Inspector General
and OIG components. ORM formulates and executes
the OIG budget and confers with the Office of the Commissioner, the Office of
Management and Budget (OMB) and the Congress on
budget matters. ORM is responsible for strategic planning and performance reporting,
and facility and property management. ORM
develops and maintains OIG’s administrative and management policy and procedures,
and performs all human resource support activities
for OIG. ORM also plans, designs, develops, tests, implements, and maintains
hardware, software, and telecommunications networks
to support OIG’s mission.
Impact
The first goal of the OIG Strategic Plan is Impact. We are committed to enhancing
SSA’s effectiveness and efficiency through
our investigative, audit and legal activities. Through our best efforts, we
strive to have maximum impact on SSA’s programs and
operations to ensure their continued integrity and reliability.
During this reporting period, we completed numerous audits, investigations,
and legal initiatives covering major SSA program and
management areas, which had a significant impact on the detection and prevention
of fraud, waste, and abuse. The summaries
presented below are indicative of our work over the past 6 months.
Audit Impact Initiatives
OA contributes to this strategic goal by conducting and supervising comprehensive
financial and performance audits and by
making recommendations to maximize the effective operations of Social Security
programs. These audits, along with short-term
management and program evaluations, focus on those SSA programs and activities
most vulnerable to fraud and abuse.
SSA Operations: Administrative Law Judges’ Caseload Performance
This audit evaluated the effect of varying levels of ALJs’ caseload performance
on the Office of Disability Adjudication and Review’s
(ODAR) ability to process projected hearing requests and address SSA’s
growing backlog of pending disability claims. We found that
ODAR’s ability to accomplish these goals will continue to be negatively
impacted by the caseload performance of some ALJs if their
current performance levels continue. In FY 2006, fully available ALJs processed
an average of 485 cases for the year, ranging from a low
of 40 to a high of 1,805. There is currently no official minimum number of cases
an ALJ is required to process.
Based on our analysis, at the FY 2006 production level, ODAR would not be able
to process all of the projected hearing requests
over the next 5 years. We estimated that if ALJs continue to process cases at
the FY 2006 level, and the number of fully and partially
available ALJs remains the same, the backlog will increase by about 150,000
cases by FY 2012. However, if fully available ALJs were
to perform at the production levels of 500 to 550 cases, ODAR would be able
to process all hearing requests and reduce the backlog
through FY 2012.
We recommended, and SSA agreed, that it should (1) establish an ALJ performance
accountability process based on availability;
(2) assess offices’ caseload performance and take appropriate corrective
actions; and (3) evaluate caseload management procedures
and share best practices among regions.
SSN Protection: Controls for Issuing SSN Verification Printouts
Under the Privacy Act, SSA must make an SSN Verification Printout available
to numberholders who request one. In this audit,
we assessed the effectiveness of SSA’s internal controls over this process.
We interviewed officials from 42 SSA field offices, and we
visited 21 of those offices to observe the SSN printout issuance process. We
also reviewed Federal laws and SSA regulations and policies,
and we analyzed transaction data of some of the 6.3 million SSN printouts issued
in FY 2006.
Based on our review, we believe the Agency should strengthen controls for issuing
SSN printouts. Our review found that an SSN
printout is treated by some third parties as equal or superior to a Social Security
card in verifying a person’s identity. However, the
SSN printout issuance process lacks adequate controls to ensure the requestor’s
identity before releasing this sensitive, personally
identifiable information. Additionally, there are no limits on the number of
SSN printouts that an individual can obtain in
a year or a lifetime, as there are for Social Security cards. We determined
that over 55,000 numberholders obtained three or
more SSN printouts during FY 2006. Our review further found that SSA managers
have little information to monitor and control the
number of SSN printouts issued.
We recommended, and SSA agreed, to (1) clarify SSA policies and the SSN printout
language; and (2) extend outreach to third
parties to raise awareness of SSA’s SSN verification services. SSA also
agreed to track actions taken to issue SSN printouts.
SSA disagreed with our recommendation to remind staff to issue printouts only
when the numberholder expresses an immediate need.
SSN Protection Follow-Up: Assessment of the Enumeration at Entry Process
The Enumeration at Entry (EAE) process allows lawfully admitted permanent residents
to apply for an SSN on the Department
of State’s Form DS 230, Application for Immigrant Visa and Alien Registration.
Once the Department of Homeland Security (DHS)
admits the immigrant, it sends SSA certain data elements needed for SSN assignment.
In this audit, we assessed the effectiveness of
the EAE process and determined the status of corrective actions SSA has taken
to address recommendations in our March 2005 report,
Assessment of the Enumeration at Entry Process.
We found that SSA took action on six of the seven recommendations from our
previous review, but that some of the weaknesses we
identified in 2005 continue. We estimate that SSA assigned 2,116 multiple SSNs
to immigrants through EAE during our
6–month audit period. This figure represents about 5 percent of the 44,084 original
SSNs the Agency assigned to EAE applicants during
that time. Immigrants continued to apply for SSNs both through EAE and at field
offices, resulting in a duplication of effort for SSA;
and the Agency’s systems could not process 16,053 (11 percent)
of the 147,422 EAE records SSA received in FY 2007 because of
data compatibility issues.
SSA agreed with our recommendations to (1) conduct random reviews of enumeration
feedback message resolutions and take
appropriate measures to improve field office performance; (2) periodically assess
the EAE process to determine whether immigrants
continue to apply for SSNs through both EAE and field offices; and (3) work
with the Department of State and DHS regarding
data compatibility problems, and review and correct pending EAE applications.
In addition, SSA agreed to consider collection of alien
registration numbers for a future release of the Social Security number application
process.
Congressional Response Report: Unimplemented Audit Recommendations Since January 2001
In a December 7, 2007 letter, the Honorable Henry Waxman, Chairman of the Committee
on Oversight and Government Reform, House
of Representatives, asked that we provide a list of recommendations made by
SSA OIG from January 1, 2001 to the present that have
not been implemented by Agency officials. We requested status information from
SSA’s Office of Budget, Finance, and Management,
Audit Management and Liaison Staff, which is responsible for SSA’s audit
management liaison activities with the Government Accountability
Office and the OIG.
From January 1, 2001 to January 4, 2008, we performed 711 audits, presenting
2,440 recommendations to SSA. We found that SSA
had not implemented 497 (20 percent) of the 2,440 recommendations. Of the 497,
SSA had agreed to 275 (55 percent). For the remaining
222 recommendations, SSA disagreed, partially agreed, or a response is
still pending. The largest number of high priority recommendations that
remain unimplemented relate to SSN protection and systems security and critical
infrastructure protection.
Since 2001, we have met or exceeded our performance goal of achieving Agency
agreement on 85 percent of our recommendations.
As evident by the acceptance rate, we have maintained a good working relationship
with SSA. Furthermore, the Agency’s
implementation of approximately 79 percent of our recommendations reflects management’s
responsiveness and commitment to addressing
the management challenges facing the Agency. Some delays surrounding implementation
are the result of limited available resources.
SSA Operations: SSA’s Ability to Reach Individuals Using the Social Security Statement
SSA sends an annual Social Security Statement to all eligible individuals,
informing them of their annual posted earnings and providing benefit estimates.
We conducted this audit to
review SSA’s ability to reach individuals using the Statement.
In FY 2006, SSA reported that over 145 million Statements were mailed
to eligible wage earners and estimated that 5 million of those were
returned. SSA also reported that the Internal Revenue Service (IRS) could not
provide addresses for 21 million individuals. We
reviewed records for wage earners (1) for whom SSA could not obtain a current
address; and (2) whose Statements were returned to SSA as
undeliverable.
Although some of the reasons individuals do not receive a Statement are beyond
SSA’s control, we found that SSA’s current process does not
ensure that all wage earners receive a Statement. First, Statements mailed to
foreign addresses often do not reach the intended recipients due to
incomplete address information provided by the IRS. In addition, we found that:
some “Address Unknown” individuals had recent contact with
SSA; some low-income wage earners were not receiving Statements; and SSA mail
operations were not maintaining accurate workload reports.
Finally, we believe SSA’s estimate of 5 million returned Statements is
low.
SSA agreed with all of our recommendations, including that SSA: (1) change
or discontinue the process of delivering Statements to individuals in
foreign countries; (2) avoid mailing Statements with incomplete addresses; (3)
account more accurately for Statements that are returned as
undeliverable; and (4) evaluate allowing online access to the Statement.
Investigative Impact Initiatives
OI examines and investigates allegations of fraud, waste, abuse, and mismanagement
in SSA programs and operations. These
allegations may involve benefit fraud, SSN misuse, violations by SSA employees,
or fraud related to grants and contracts. Our
investigations often result in criminal or civil prosecutions and the imposition
of CMPs against offenders. These investigative efforts
impact SSA program integrity by deterring those contemplating fraud against
SSA in the future. Our work in the areas of program
fraud, enumeration fraud, SSN misuse, and employee misconduct ensures the reliability
of SSA programs and their future operations.
Investigative Results
(10/01/07– 3/31/08)
Allegations Received
52,381
Cases Opened
5,122
Cases Closed
5,417
Arrests
1,078
Indictments/Informations
695
Criminal Prosecutions1
946
Civil/CMPs
221
1 The number of convictions in Federal, State, local, or foreign courts, and
convictions under the Uniform Code of Military Justice, including cases resulting
in a pretrial diversion agreement.
We have altered our reporting of Investigative Results to align ourselves with
the terminology and definitions utilized by the President’s Council on
Integrity and Efficiency. The table above
reflects these changes
Other 0.76%
Social Security Number 8.04%
Title XVI-Aged 2.79%
Title XVI-Disability 43.01%
Title II-Retirement 10.97%
Employee Related 1.39%
Title II-Disability 33.03%
Cases Opened by Program Category 10/01/2007 – 03/31/2008
Cases Closed by Program Category 10/01/2007 – 03/31/2008
Social Security Number 10.17%
Title II-Disability 29.55%
Title II-Retirement 16.74%
Title XVI-Aged 2.18%
Title XVI-Disability 39.15%
Employee Related 1.44%
Other 0.78%
Allegations Received by Source (10/01/07 – 3/31/08)
Law Enforcement
20,092
SSA Employees
12,874
Private Citizens
8,537
Anonymous
6,293
Other
2,979
Beneficiaries
1,000
Public Agencies
606
TOTAL
52,381
Allegations Received by Category
(10/01/07 – 3/31/08)
SSI Disability
20,488
Disability Insurance
18,134
SSN
5,785
Old-Age, Survivors Insurance
3,364
Other
2,716
Employee
1,430
SSI Aged
464
TOTAL
52,381
Employee Fraud: SSA Employee Fails to Disclose Employment to HUD
Acting on a referral from the Department of Housing and Urban Development (HUD)
OIG, our San Francisco office investigated
an SSA employee for failing to disclose her employment to HUD. Between April
1997 and November 2006, the employee completed
applications and intentionally withheld information regarding her SSA employment
in order to obtain HUD Section 8 housing
subsidies. The employee received $64,452 in subsidies to which she was not entitled.
The SSA employee pled guilty to theft of Government property. She was sentenced
in January 2008 to 6 months’ home detention
and 3 years’ probation, and was ordered to pay full restitution to HUD.
SSA has indefinitely suspended the employee.
Employee Fraud: SSA Employee Involved in Credit Card Fraud Ring
Our Los Angeles office investigated an SSA employee for selling information
from SSA records. This investigation was based on
a request from a credit card agency, which provided SSA with a list of several
hundred compromised SSNs. Our investigation
revealed that one SSA employee had accessed the records associated with a majority
of these compromised SSNs. We further determined
that the SSA employee was paid by an accomplice to obtain additional identifying
information associated with specific SSNs
and names. The accomplice then sold the information to individuals who opened
fraudulent credit card accounts. Several credit
card companies and banks were victims of this scheme, which caused an estimated
fraud loss of $2.5 million.
The employee pled guilty to conspiracy and accessing a protected computer to
conduct fraud. She was sentenced in December 2007 to
5 years’ probation, 12 months’ home detention, and 200 hours of community
service. She was also ordered to pay restitution of $424,214
to several banks, and was banned from employment in any position where she has
access to confidential personal data such as
SSNs or driver’s license numbers. SSA has terminated the employee.
Bankruptcy Fraud Project: Woman Files 12 Bankruptcy Petitions
Our Memphis office opened an investigation based on a referral from the United
States Attorney’s Office (USAO) for the Western
District of Tennessee. The referral indicated that a woman had filed Federal
bankruptcy petitions using SSNs not assigned to her. A
review of bankruptcy records determined that she had filed 12 bankruptcy petitions
since 1997. Our investigation further revealed that
between March 2003 and August 2005, the woman used five SSNs assigned to other
individuals to file bankruptcy. The woman
also failed to disclose any of the prior petitions when filing.
In January 2008, after pleading guilty to bankruptcy fraud, the woman was sentenced
to 2 years’ supervised release, and was ordered to
pay restitution of $3,800 to a private citizen.
Fugitive Felon Program
The OIG’s Fugitive Felon Program identifies fugitive felons and parole
and probation violators through automated data matches
between SSA’s beneficiary rolls and Federal and State warrant databases.
The impact of this program reaches beyond Social Security
to local communities across the United States. Our data-sharing efforts with
local, State, and Federal law enforcement agencies contributed
to the arrest of over 6,600 fugitives during this reporting period, over 14,000
in FY 2007, and over 65,500 arrests since the program’s
inception in 1996. The following are highlights of fugitive felon activities
during the past 6 months.
Fugitive Felon Program: Kidnapper Assumes Alias to Evade Arrest
In January 2008, the U.S. Marshals Service (USMS) requested assistance from
agents in our Vancouver, Washington office in locating
a 62-year-old man who disappeared in 2005 after serving 89 months in the Oregon
State Penitentiary for kidnapping. The man had
outstanding warrants for failure to register as a sex offender in the State
of Washington and for a parole violation (after the kidnapping
conviction) in Oregon.
After reviewing the man’s criminal record, which included numerous aliases
and SSNs, we determined that he was using an alias and
currently living in Georgia and receiving SSI disability payments. According
to SSA records, the injuries documented for the missing
fugitive and the SSI recipient matched. The Savannah, Georgia, USMS office interviewed
the man at his residence in Baxley, Georgia
and he denied using an alias until confronted by a fingerprint match determination.
He was arrested in February 2008 and is currently
awaiting extradition to Salem, Oregon.
Fugitive Felon Program: 67-Year-Old Man Arrested for Felony Sex Offense
As part of an initiative to locate and apprehend sex offenders in Pierce County,
Washington, agents in our Seattle office arrested a
67-year-old Title II retirement beneficiary without incident in January 2008.
The man was wanted for failure to appear related to a
felony sex offender charge. The outstanding warrant had been issued by the Pierce
County Sheriff’s Office in 1982.
Cooperative Disability Investigative Program
Our CDI Program continues to be one of our most successful initiatives, contributing
to the integrity of SSA’s disability programs. CDI is a
joint effort of the OIG, SSA, State Disability Determination Services (DDS),
and State and local law enforcement personnel. Our 19 CDI
Units in 17 States work to obtain sufficient evidence to identify and resolve
issues of fraud and abuse related to initial and continuing
disability claims. The following table highlights the successes of the CDI program,
which yielded over $106 million in SSA program
savings during this reporting period.
Cooperative Disability Investigative Program Results
(October 1, 2007 – March 31, 2008)
State
Allegations Received
Confirmed Fraud Cases
SSA Savings1
Non-SSA
Savings2
Arizona
98
70
$4,680,135
$1,177,600
California3
485
328
$18,516,385
$14,193,605
Colorado
90
62
$4,054,240
$1,268,296
Florida
61
71
$3,259,310
$3,104,102
Georgia
170
86
$5,246,222
$1,582,933
Illinois
40
39
$2,328,455
$944,515
Louisiana
54
33
$2,031,690
$1,256,466
Massachusetts
90
61
$3,847,881
$1,639,540
Missouri
97
56
$3,782,345
$1,310,480
New Jersey
74
70
$4,496,801
$3,968,630
New York
139
102
$6,185,460
$5,927,940
Ohio
276
188
$12,019,878
$6,720,710
Oregon
168
136
$8,692,100
$7,729,560
Tennessee
63
50
$3,361,180
$1,703,235
Texas4
165
145
$9,278,525
$4,811,281
Virginia
103
70
$4,655,000
$3,814,546
Washington
176
154
$9,620,410
$7,528,135
Total
2,349
1,721
$106,056,017
$68,681,574
1 SSA program savings are projected at a flat rate of $66,500 for initial claims
that are denied as a result of CDI investigations. When a CDI investigation
supports the cessation of an in-pay case, SSA program savings are projected
by multiplying the actual monthly benefit times 60 months.
2 Non-SSA savings are also projected over 60 months whenever another governmental program withholds benefits as a result of a CDI investigation, using estimated or actual benefit amounts documented by the responsible agency.
3 California has two units, one in Los Angeles, and the other in Oakland.
4 Texas has two units, one in Dallas, and the other in Houston.
The following CDI case summaries highlight major investigations we conducted
during this reporting period which enhanced SSA
program integrity and the reliability of SSA’s operations.
CDI: Hurricane Katrina Evacuee Attempts to Collect Disability Benefits for Mental Illness
Our Houston CDI Unit investigated a Hurricane Katrina evacuee who filed an
SSI disability claim due to nervousness, paranoia,
and depression. The Texas DDS referred this case due to suspected malingering.
CDI Unit investigators, acting in an undercover capacity,
interviewed the man, who appeared very calm and attentive and showed no signs
of paranoia or depression. In fact, the man was very
cooperative and cordial to the investigators. The man stated he was not working
because he was waiting on his disability check. When
asked whether he was disabled, the man and his wife both laughed in response
to the question. The man and other family members all advised
that there was nothing wrong with him. His wife also advised that she receives
a disability check for mental issues. However, the wife
grinned and acknowledged that nothing was wrong with her. During the interview,
he was able to provide his date of birth, read, keep up
with the interview, and appropriately answer questions without assistance.
The Texas DDS denied the man’s SSI claim. Additionally, based on a Report
of nvestigation provided by our Houston CDI
Unit, the DDS terminated the woman’s SSI payments.
CDI: Horse Trainer Applies for Disability Benefits Due to Seizures
Our Salem, Oregon CDI Unit investigated a 42-year-old Oregon man who applied
for Title II disability benefits, alleging a seizure
disorder. The case was referred to our Salem CDI Unit by the Albany SSA Office
after they discovered inconsistencies regarding the man’s
ability to drive, his need for in-home care, and his activities of daily living.
On his disability application, the man reported that he needed to be watched
at all times due to his seizures. He indicated that his wife
acted as his caregiver. The man’s statement was in stark contrast to a
Title II disability claim filed a few months prior by his wife.
On the wife’s application, she stated that she required care and that her
husband was the caregiver. In addition, she reported that her
husband worked on their horse farm. Witness interviews and investigator observations
of the husband and wife revealed that both were
actively running a horse training business on their property, specializing in
training unbroken and/or wild horses. The man’s
application for Title II disability benefits was denied. The wife’s disability
claim had already been denied.
CDI: Taxi Cab Driver Receives Disability Benefits While Working
Our Baton Rouge CDI Unit investigated a 56-year-old Terrytown, Louisiana man
who received Title II disability benefits since
November 1994 for disorders of the back. The Terrytown SSA office referred this
case after receiving an anonymous call reporting the
man was employed as a taxi cab driver since 1995. In addition, the caller reported
that the man had testified in a State Custody Court
Hearing that he was employed and earned over $1,500 per month.
The owner of the cab company was interviewed and stated that the man is an
independent contractor who has worked at the company
since 1997. Additional third-party interviews, surveillance, and local government
occupational license record checks confirmed that the man
was employed full-time as a taxi cab owner/operator.
As a result of the investigation, the man’s disability benefits were terminated
in December 2005. The man pled guilty to making a false
statement, and was sentenced in December 2007 to 10 months’ home confinement
(with electronic monitoring) and 5
years’ probation. He was also ordered to pay restitution of $108,884 to
SSA.
CDI: Woman Uses Father’s SSN to Conceal Employment
Our Atlanta CDI Unit investigated a 60-year-old woman who had received Title
II disability benefits since 1999
due to a job-related back injury. An anonymous individual alleged that the woman
was working in a family-owned
business and using her father’s SSN to conceal her earnings. CDI Unit investigators
developed information
confirming that the woman had been employed since 1999.
SSA removed the earnings fraudulently posted to the woman’s father’s
record, which reduced the father’s SSA retirement benefits. The
Atlanta SSA District Office terminated the woman’s benefits and assessed
an overpayment of $52,854.
Value
The second goal of the OIG Strategic Plan is Value. All OIG initiatives strive
to provide value to SSA, Congress, other key decision-
makers, and the public by delivering timely and reliable audit, investigative,
and legal products and services. To achieve the intended value,
these products and services must effectively meet the needs of all whom we serve
while maximizing our available resources. To do
this, we integrate best-practice strategies and the newest technologies to increase
our productivity and maximize our return on
investment to the public.
Value Attained Through Audits
The focal point of many of our audits is the identification of SSA programmatic
and operational areas where funds could be put
to better use. In addition, we have often isolated situations where we have
questioned approaches and their costs, and have
recommended alternatives to yield program and operational savings.
During this reporting period, our auditors issued 40 reports with recommendations
identifying over $630 million in questioned
costs and over $309 million in Federal funds that could be put to better use.
Some of our most notable audits are summarized below.
SSA Operations: SSA’s Effectiveness in Verifying Eligibility Requirements
for Individuals Applying for the Medicare
Part D Prescription Drug Program
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003
established the new Medicare Part D Prescription Drug
Program. While the Centers for Medicare and Medicaid Services are primarily
responsible for this program, SSA assists the public with
filing low-income subsidy applications. SSA’s primary role is to determine
whether a person will be eligible for a subsidy based on income
and resources. In this audit, we assessed the effectiveness of SSA’s income
and resource verification process for individuals applying
for the Part D low-income subsidy.
We estimated that SSA approved Medicare Part D low-income subsidies to approximately
276,000 applicants whose income and/or
resources exceeded eligibility limits. The enrollment of these individuals would
result in estimated expenditures of approximately
$473 million during a 12-month period. This occurred primarily because SSA did
not secure the needed information to verify income and
resource amounts on subsidy applications. Furthermore, we estimated that SSA’s
new redetermination process is unlikely to correct
these errors in approximately 130,000 of the 276,000 cases.
SSA disagreed in most cases that it made incorrect low-income subsidy eligibility
determinations, stating that the Agency had made the best possible determinations
based on information available at the time. We recommended that SSA (1) verify
stated income and resource amounts; (2) work more
closely with the IRS to obtain timely income and resource data to verify eligibility;
and (3) ensure that its redetermination process
identifies and terminates improperly awarded subsidies currently in effect.
Value
Benefit Payment Audit: Adjustment of Disabled Wage Earners’ Benefits at Full Retirement Age
The Act contains two provisions that affect the calculation of monthly benefits
for beneficiaries who were entitled to both
retirement and disability benefits before full retirement age (FRA).
The first provision eliminates a benefit reduction for beneficiaries who are
simultaneously entitled to disability
benefits, but elected a reduced retirement benefit to avoid a workers’
compensation or public disability benefits offset. For these beneficiaries,
SSA must eliminate the benefit reduction and increase the benefit amount at
FRA.
The second provision affects beneficiaries who elected reduced retirement benefits
and subsequently become entitled to disability
benefits. For these beneficiaries, SSA must reduce the disability benefit for
each month the individual was previously entitled to a
reduced retirement benefit.
In this audit, we assessed whether SSA accurately calculated benefits under
these two provisions. We found that SSA had
not properly adjusted the benefits of 2,782 disabled wage earners at FRA. As
a result, we estimated that: (1) SSA underpaid
these beneficiaries about $39.9 million; and (2) unless SSA takes prompt corrective
action, 2,685 of these beneficiaries will be
underpaid about $68.1 million over their remaining life expectancies. We also
found that SSA overpaid about $3.2 million to
3,220 beneficiaries because it did not apply the correct reduction factor for
the months of entitlement to retirement benefits before FRA.
SSA agreed with our recommendations, including that it identify and take corrective
actions for those beneficiaries who were
incorrectly paid, and establish appropriate controls to ensure reduction factors
are properly adjusted at FRA.
Follow-Up: Impact on SSA’s Programs When Auxiliary Beneficiaries Do Not Have Their Own SSNs
In this audit, we assessed whether SSA implemented the recommendations in our
September 2002 report, Impact on the Social
Security Administration‘s Programs When Auxiliary Beneficiaries Do Not
Have their Own Social Security Numbers. That audit
identified 126,471 auxiliary beneficiaries who did not have their own SSNs on
the primary wage earner’s Master Beneficiary Record
(MBR), causing $8.9 million in improper payments.
We found that SSA implemented two of the three recommendations it agreed to
in our prior report and had made an effort to
implement our final recommendation to add the SSNs to the MBRs of all auxiliary
beneficiaries currently receiving benefit
payments. However, we still identified 63,134 auxiliary beneficiaries without
an SSN on the MBR, and $7.6 million in improper payments,
including (1) $7.5 million in OASDI benefits improperly paid due to the deaths
of auxiliary beneficiaries; and (2) $89,938 in incorrect
SSI payments made because the appropriate amount of the auxiliary beneficiaries’
OASDI benefits was not recognized as income when
their SSI payments were calculated.
About 96 percent of the auxiliary beneficiaries in these cases were first entitled
to benefits before June 1989. Although the Act only
requires SSA to obtain satisfactory proof of SSNs from individuals first entitled
to benefits in June 1989 or later, obtaining such proof
for all beneficiaries may help reduce improper payments. We recommended that
SSA take all feasible steps to add the SSNs to the MBRs
of all auxiliary beneficiaries currently receiving benefits (including those
beneficiaries who were first entitled to benefits prior to June 1989).
SSA agreed with our recommendation.
Benefit Payment Audit: Administrative Costs Claimed by Various DDSs
The DDSs in each State, the District of Columbia, and Puerto Rico determine
whether applicants meet the medical requirements for
Disability Insurance and SSI in accordance with Federal regulations. Each DDS
is authorized to purchase consultative examinations and
existing medical evidence from the claimants’ treating sources. SSA reimburses
the DDSs for 100 percent of allowable costs up to its
approved funding authorization.
During this reporting period, we issued five DDS administrative cost audit
reports. We evaluated the internal controls over the
accounting and reporting of administrative costs; determined whether costs claimed
were allowable and funds properly drawn; and
assessed limited areas of the general security controls environment.
In total, we reported $1,975,414 in questioned costs and $1,780,086 in funds
put to better use. Most of our recommendations relate to the DDS’
need to comply with Federal regulations and SSA policies and procedures. The
individual audit reports and their financial
impacts are listed below. SSA generally agreed with our recommendations.
DDS Administrative Cost Audit Reports
DDS
Audit Number
Questioned Costs
Funds Put to Better Use
Rhode Island
A-01-06-15069
$1,751,060
$0
Alabama
A-08-07-17151
$0
$0
Connecticut
A-15-07-27176
$0
$0
Washington
A-09-07-17103
$0
$1,516,055
District of Columbia
A-15-08-18019
$224,354
$264,031
Totals
$ 1,975,414
$ 1,780,086
Benefit Payment Audit: Controls over Miscellaneous Payments Made Through the Single Payment System
Certain types of benefit payments are processed through SSA’s Single Payment
System (SPS); for example, the issuance of death underpayments to
non-beneficiaries or the re-issuance of a returned Lump Sum Death Payment. The
SPS was designed to ensure the timeliness of these payments, stop
duplicate and erroneous payments, and provide management information. We conducted
an audit to determine whether SSA had adequate controls
over payments made via the SPS.
Between July 1, 2002 – April 10, 2006, SSA issued approximately $373 million
in SPS death underpayments to 327,580 non-beneficiaries. Based
on our review, we estimate that SSA improperly paid $7.3 million to 11,912 non-beneficiaries.
We also found that SSA did not have adequate
documentation to support $98 million in death underpayments paid to 50,030
non-beneficiaries, and did not obtain or record the SSNs of 176,029
non-beneficiaries. We also identified 2,281 individuals who may have received
duplicate SPS payments totaling $48.3 million.
We recommended that SSA: (1) take corrective actions on improper and duplicate
SPS payments identified by our audit; (2) remind staff of procedures
to follow when determining underpayment amounts payable to non-beneficiaries;
(3) retain written applications for death underpayments; (4)
establish an SPS alert for instances in which an SSN is not recorded;
and (5) remind staff to take steps to identify and prevent duplicate payments.
SSA agreed with our recommendations.
Representative Payee Audit: The Henry Ittleson Center – An Organizational Representative Payee for SSA
SSA Region II requested that we conduct an audit of the Henry Ittleson Center
for Child Development (Ittleson Center) after
being alerted by Ittleson’s parent organization, the Jewish Board of Family
and Children’s Services, Inc. (JBFCS), to an allegation of
misappropriated SSI funds. We conducted this audit to determine whether SSI
payments sent to the Ittleson Center on behalf of some of its
residents were properly used for the intended recipients and that related expenditures
were properly supported.
We found that the Ittleson Center did not have effective safeguards over the
receipt and disbursement of SSI payments. Additionally,
we found SSI payments were not used and accounted for in accordance with SSA’s
policies and procedures. We determined that 468 payments
totaling about $33,000 for 39 SSI recipients from January 1, 2001 through
March 31, 2006 were not properly safeguarded or accounted for in accordance
with Federal regulations and SSA’s policies and procedures. Because of
the lack of financial records, we were unable to determine how the Ittleson
Center used the SSI funds it received.
We recommended, and SSA agreed, to (1) determine whether SSI payments
received by the Ittleson Center were misused, and if misuse
occurred, take appropriate action; (2) work with JBFCS and the Ittleson Center
to establish effective internal controls over the receipt and management
of SSI payments and to ensure that complete financial records supporting the
receipt, recording, disbursement and maintenance of SSI payments
are maintained; and (3) determine whether other JBFCS facilities are serving
as representative payees, and, if so, ensure that they are doing so in
accordance with applicable regulations and SSA policies and procedures.
Value Attained Through Investigations
During this reporting period, the efforts of our investigators yielded significant
results arising from the successful prosecution of cases that
we developed. Our investigators achieved over $200 million in investigative
accomplishments, with over $38 million in SSA recoveries,
restitution, fines, and settlements/judgments, and over $162 million in projected
savings from investigations resulting in the suspension
or termination of benefits.
The table (shown at right) represents the efforts of OI personnel nationwide
to recover SSA funds paid in fraudulent benefits or
through other illegal actions.
SSA Funds Reported
(10/01/07 – 3/31/08)
Recoveries
$23,576,850
Fines
$2,383,206
Settlements/Judgments
$605,530
Restitution
$11,635,333
Estimated Savings
$162,227,111
Total
$200,428,030
The following case summaries are indicative of the more than 5,400 investigations
that we closed during this reporting
period. The cases we have highlighted illustrate the many instances where our
investigative efforts have resulted
in a significant return on investment.
SSN Misuse: Former Companion Steals Doctor’s Identity
Agents from our St. Louis office investigated a woman who stole the identity
of her doctor, with whom she had been romantically involved.
The investigation revealed that the woman used the stolen identity to obtain
a Missouri identification (ID) card. Using the ID card, the
woman financed a vehicle, obtained mortgage loans, and opened a business, resulting
in losses totaling more than $96,000.
The woman pled guilty to misuse of an SSN, and was sentenced in November 2007
to 6 months’ imprisonment, 90 days’ home
confinement, and 3 years’ supervised release. She was also ordered to pay
full restitution to various financial institutions.
SSN Misuse: Woman Opens Nine Bank Accounts with Stolen SSNs
Agents from our Seattle office, in cooperation with the Federal Bureau of Investigation
and the King County, Washington Sheriff’s Office,
investigated a woman suspected of committing SSN misuse and bank fraud as part
of “Operation Name Game.” This operation
identified suspects in the State of Washington who perjured themselves in Washington
State courts to obtain legal name changes. Our
investigation revealed that the woman was responsible for opening nine bank
accounts with stolen SSNs, including two using the true
name and SSN of a victim.
In January 2008, after pleading guilty to bank fraud, the woman was sentenced
to 5 months’ incarceration, 5 months of home confinement,
and 5 years’ supervised release. She was also ordered to pay restitution
of $15,406 to a financial institution.
SSN Misuse: Former Bank Vice-President Involved in a Credit Card Fraud Conspiracy
Agents from our St. Louis office, the U.S. Secret Service, and the U.S. Postal
Inspection Service discovered that a former bank vice-
president was responsible for a large credit card fraud conspiracy. Fraudulent
lines of credit in the form of business credit cards
with credit limits of $25,000 were issued. At the suspect’s direction,
the credit applications were completed for businesses that did not
exist, using the identities of other conspirators. Some of these individuals
were paid for the use of their identities. In return for the credit
cards, the suspect received kickbacks ranging from $2,000 to $5,000, resulting
in a loss of over $1.4 million to the financial institution.
In February 2008, after a being convicted in a jury trial for bank and credit
card fraud, the former bank vice-president was sentenced
to 114 months’ incarceration and 5 years’ supervised release and was
ordered to pay restitution of more than $1.4 million to the
bank and a special assessment of $3,600. In addition, a Missouri State Representative
was forced to resign from the Missouri House of
Representatives as part of his plea agreement in this case. He is awaiting sentencing.
SSN Misuse: Tax Preparer Commits Identity Theft
Agents in our Seattle office investigated a tax preparer who issued herself
over 25 instant loans using the identities of her tax clients.
Our investigation revealed that the woman reviewed confidential client files
and used the clients’ identifying information to complete
the loan applications. The woman was able to fraudulently obtain $24,700 in
instant loans.
In November 2007, after pleading guilty to bank fraud and aggravated identity
theft, the woman was sentenced to 39 months’
incarceration and 5 years’ supervised release and was ordered to pay restitution
of $24,700 to the loan company.
Representative Payee Fraud: Payee Starves SSA Beneficiary
Acting on a referral from the Butler County, Missouri Public Administrator’s
Office, our St. Louis office investigated a representative payee
for stealing funds from a Title II retirement beneficiary. The investigation
revealed that the representative payee misused the beneficiary’s
funds and left her near starvation. The beneficiary was suffering from the late
stages of Alzheimer’s disease.
In December 2007, after pleading guilty to making false statements to SSA and
converting benefits, the representative payee
was sentenced to 6 months’ home confinement and 5 years’ probation,
and was ordered to pay restitution of $46,965 to SSA. The SSA
beneficiary has been placed in a nursing home, and the Butler County Public
Administrator’s Office has assumed guardianship.
Representative Payee Fraud: Father Misuses Son’s SSI Payments
Our Salt Lake City office investigated a referral from the St. Cloud, Minnesota
SSA office alleging that the father (and representative
payee) of an SSI disabled child recipient failed to report that the child had
been removed from his custody. From April 2004 – August
2006, the father continued to receive the child’s SSI payments. During
that time, the father participated in a SSA review and falsely
stated that he maintained custody of the disabled child. SSA determined that
the father wrongfully received and misused $15,681 of
the child’s SSI payments.
In January 2008, after pleading guilty to wrongful conversion of SSI payments,
the father was sentenced to 4 months’ home
confinement and 3 years’ probation. In addition, he was ordered to pay
restitution of $15,681 to SSA.
Disability Program Fraud: Mortgage Broker Conceals Work Activity
Our St. Louis office conducted this investigation based on a referral received
from the Clayton, Missouri SSA office. The investigation revealed
that a Title II disability beneficiary worked as a mortgage broker, earning
over $200,000 annually, while collecting SSA disability
benefits. When arrested, the woman lived in a $795,000 home she purchased by
falsifying her loan application. The home was later placed
in foreclosure by the mortgage company. The investigation also revealed that
in 2005, the woman forged the signature of a bankruptcy
judge on a bankruptcy document.
In January 2008, after pleading guilty to mail and wire fraud, the woman was
sentenced to 33 months’ imprisonment and 5 years’
supervised release. She was ordered to pay full restitution of $153,857 to SSA
and $70,718 to the mortgage company.
Disability Program Fraud: Disability Beneficiary Obtains Second SSN to Conceal Employment
Agents in our Iselin, New Jersey office, with assistance from the U.S. Secret
Service, investigated a Title II disability beneficiary
for fraudulently obtaining a second SSN in order to conceal his work activity.
The man used the second SSN to work, while receiving
SSA benefits under his original SSN. In January 2008, after pleading guilty
to theft of Government funds, he was sentenced to
6 months of home incarceration, and was ordered to pay SSA restitution of $68,185.
Disability Program Fraud: Man Uses Father’s SSN to Conceal Work
Based on a referral from a Pennsylvania SSA office, our Atlanta office investigated
a Title II disability beneficiary who concealed his work
activity by using his father’s SSN. SSA determined that the man received
$147,719 in benefits to which he was not entitled. In
December 2007, after being found guilty of theft of Government funds, the man
was sentenced to 2 years’ incarceration and 3 years’
supervised release. In addition, he was ordered to pay full restitution to SSA.
Disability Program Fraud: SSI Recipient Operates Daycare
Agents in our Cleveland office, after receiving a referral from the local SSA
office, conducted an investigation of an SSI disability recipient
for concealing her operation of a day care facility. The ensuing investigation
became a joint effort with the Special Investigations
Unit of the Cayahoga County Department of Jobs and Family Services. The investigation
revealed that the woman not only operated
a day care facility, but advertised in a local Cleveland newspaper. She also
concealed her marital status and defrauded the State of Ohio
Aid to Dependent Children and Food Stamp programs.
The woman pled guilty to Social Security and mail fraud, and was sentenced
in December 2007 to 3 years’ probation and
6 months’ home detention with electronic monitoring. She was also ordered
to pay restitution of $65,123 to SSA and $20,319
to the State of Ohio.
Deceased Payee Project: Man Uses Bank Card to Collect Deceased Mother’s SSA Funds
Our Clearwater, Florida office conducted this investigation as part of the
National Deceased Payee Project (BIC D), which
identifies widows and widowers of Title II beneficiaries whose benefits continued
to be paid after their death. The investigation
determined that a woman receiving widows benefits died in January 2003, and
that benefits had continued to be direct-deposited into her
checking account. Her son accessed the funds via Automated Teller Machines and
through point-of-sale transactions. The son admitted
to misappropriating funds intended for his deceased mother.
In November 2007, after pleading guilty to theft of Government funds, the man
was sentenced to 5 years’ supervised probation, and
was ordered to pay restitution of $28,414 to SSA.
Double Check Negotiation (DCN) Project: Woman Claims Non-Receipt of 15 SSI Payments
An investigation conducted by our Indianapolis office revealed that a woman
receiving SSI disability payments claimed non-receipt of
payments on seven occasions. In addition, the woman was the representative payee
for an SSI disabled individual and claimed non-
receipt of payments for this recipient on eight occasions.
The woman pled guilty to theft, and was sentenced in October 2007 to 1 year
of probation. She was ordered to pay restitution
of $4,252 to SSA.
Value Attained Through Legal Initiatives
OCCIG’s efforts to administer that portion of the CMP program which deals
with violators of Section 1129 of the Act maximize the
resources available to us and create a positive return on investment. Section
1129 of the Act allows for the imposition of a CMP
against those who make false statements or representations in connection with
obtaining or retaining benefits or payments under
Titles II, VIII, or XVI of the Act. In addition, CMPs may be used to penalize
representative payees for wrongful conversion of payments
made under the Social Security programs, and to penalize individuals who knowingly
withhold a material fact from SSA. After
consultation with DOJ, OCCIG is authorized to impose penalties of up to $5,000
for each false statement, representation, conversion, or
omission. A person may also be subject to an assessment, in lieu of damages,
of up to twice the amount of any resulting overpayment.
The following table and cases highlight the value achieved through our Section 1129 efforts for this reporting period.
False Statements Under Section 1129 Results
(10/01/07 – 3/31/08)
Cases Received 372
Cases Initiated 273
Cases Closed 412
Penalties and Assessments $3,092,932
Number of Hearings Requested 14
Two ALJ Rulings Uphold OCCIG Penalty Determinations
OCCIG imposed a $62,393 CMP and assessment in lieu of damages against a Georgia
woman for making false statements to
SSA. The woman, who was operating her own advertising business, told SSA that
she was not working from 1999 through 2003 due to
complications from a liver transplant. However, SSA received information that
the woman was earning significant sums during those years.
Upon investigation, the woman confessed to the false statements, but she later
appealed the imposition of the $62,393 penalty claiming
that she did not have the requisite mental capacity, nor the financial condition
to pay the penalty. Nonetheless, an ALJ found that the
OCCIG penalty was appropriate considering the woman’s repeated false statements,
and her inability to show that she could not pay the
penalty.
In another contested action, OCCIG imposed a $35,528 CMP and assessment in
lieu of damages against a divorced Texas woman,
serving as representative payee for her two children. The woman told SSA that
her two children were living with her and that she
would use their benefits for them. However, SSA received information from the
children’s father that the children were living with him
and that he did not receive any of the children’s benefits from the mother.
SSA appointed the father the new representative payee, and
OCCIG imposed the CMP. The mother appealed the CMP, but the ALJ concluded that
penalties and assessment imposed by OCCIG
were warranted and reasonable.
Long-time SSI Recipients Conceal Significant Assets and Resources
A California couple received SSI benefits since 1994. During yearly reviews
to determine their continued eligibility, the couple consistently
reported that they had no income and only $1,200 in a savings account. A savvy
SSA claims representative discovered that the
couple had undisclosed resources of cash and property overseas where they traveled
frequently, and that they kept large amounts of
cash which would have made them ineligible to receive SSI benefits. They each
agreed to pay $150 per month to pay back the benefits
they fraudulently received, plus a $10,000 penalty each.
OCCIG Settles Representative Payee Fraud Case
A mother who served as her son’s representative payee not only failed
to inform SSA when her son was incarcerated, and therefore no
longer entitled to his disability benefits, but continued to cash his benefit
checks, which she spent on her own needs. The mother also
falsely told SSA that she spent his benefits on her son’s personal needs.
OCCIG settled the case for a $15,000 penalty to be withheld from
the woman’s own monthly SSI benefits.
Man Using Wife’s SSN to Work Gets $15,000 CMP; Employer Agrees to $25,000 Settlement
The SSA Fraud Hotline referred this case to the Atlanta CDI Unit after receiving
an anonymous report about a man concealing
his employment by working under his wife’s SSN. Our CDI Unit investigators
interviewed employees at the man’s place of employment
and discovered that the man has been employed full time for the past 2 years.
The owner of the business was interviewed and
provided a written statement to investigators advising that the man has always
worked at his company using his wife’s SSN. In addition,
the owner reported that any wages from his company appearing under the wife’s
SSN are actually wages belonging to the man.
SSA terminated the man’s Title II disability benefits, which resulted
in an overpayment of $24,314. OCCIG obtained a $15,000 default
judgment against the man for three false statements made to conceal the fact
that he was working full-time under his wife’s SSN, and
negotiated a $25,000 CMP settlement with the man’s employer for knowingly
allowing the man to work under his wife’s SSN.
Penalty Imposed Against California Man for Making Numerous False Statements
OCCIG imposed a penalty and an assessment in lieu of damages totaling $48,999
against a California man for making numerous false
statements to SSA. The man, while collecting SSI disability benefits in his
own name, applied for SSI disability benefits using his
brother’s name and SSN, and a fraudulent driver’s license. The false
statements resulted in improper SSI payments of $13,499.
OCCIG Imposed $25,000 CMP for Nine DCNs
OCCIG imposed a $25,000 penalty against a Kentucky woman for negotiating both
her original and replacement SSI benefit checks
on nine separate occasions. Each time she contacted SSA to obtain a replacement
check, she stated she had not received the original
benefit check. Our investigation indicated that the woman had a long history
of DCNs dating back to 1993, and that she had negotiated
both the original and replacement checks on 25 separate occasions since
that time.
People
The third goal of the OIG Strategic Plan is People. The collective effort of
our employees continues to be the driving force behind this organization’s
success in meeting its mission. We provide an encouraging and rewarding work
experience with the goal of retaining these exceptional individuals.
OIG leadership fosters an environment where employees can realize their potential
through training and developmental programs. Each year,
OIG components convene training conferences to inform their employees about
new procedures at various levels of our organization. In addition,
the OIG Organizational Health Committee conducts an annual assessment of employee
satisfaction levels and addresses employee
concerns.
Budget
For FY 2008, our annual appropriation is $92 million, which funds 590
work years and related support costs. Of this amount,
approximately 88 percent goes toward the salaries and benefits of our employees.
The remaining 12 percent pays for our support
costs—specifically rent, telecommunications, and discretionary spending
(travel, training, and general operational procurements). This budget
allocation supports our efforts to meet or exceed the expectations stipulated
in our Third Edition Strategic Plan for Fiscal Years 2006-2010. The
goals and accomplishments measured in our Strategic Plan are also published
in the Annual Congressional Budget Justification.
Human Capital Planning and Management
We actively pursue and work to retain the best possible employees. First, our
budget and staffing plan forecasts employee departures based
on historical trends and human resource data, which allows us to establish optimal
timeframes for recruiting new employees. Moreover, OIG
managers monitor staffing to ensure that vacant positions are filled promptly,
ensuring that OIG components have the ability to fulfill their
respective missions.
Our human capital specialists and recruiters participate in job and career
fairs nationwide. These events target underrepresented groups in
the labor market, allowing us to maintain a truly diverse workforce. Once we
identify the best candidates, we employ a structured interview
process to fairly assess their qualifications. Through these efforts, we hired
30 employees in FY 2008.
Also during this reporting period, the Inspector General selected nine outstanding
employees for our first Leadership Development Program. This
18-month training and development program will provide OIG with a cadre of highly
qualified candidates for future leadership vacancies. The
program included a mentor training session in late March 2008, and the first
assignments began in April 2008.
Information Technology
We provide and maintain most of our own information technology (IT) systems.
Our IT specialists utilize state-of-the-art tools and place
a high priority on ensuring that our employees have the latest proven technologies
with which to perform their work.
During this reporting period, we continued to build a comprehensive administrative
database that will allow for interconnectivity between
OIG’s components, and we released a budget application that automates workflow
and tracking of travel, training, and procurement
transactions. An additional module for facilities management is near completion
and is being refined prior to its release. We
are also working to identify other business processes that can be automated
to increase our efficiency and decrease our costs.
In support of the President’s goal to expand electronic services, we maintain
an Internet website that is informative and useful to
the public. Citizens using our web-based services will find them easy-to-understand.
A workgroup comprised of auditors, investigative
personnel, legal experts, and administrative technicians continuously monitors
the OIG website to ensure that all information is
accurate and up-to-date.
Finally, our IT staff analyzes industry trends to find new technologies that
may enhance our business processes. In FY 2008, for
example, we have upgraded our systems infrastructure to provide ample, secure
storage for application and user data as well
as additional disaster recovery capabilities. In addition, OIG software specialists
and contract personnel have worked during this
reporting period to implement additional enhancements to our National Investigative
Case Management System, which is already
a model for investigative case management across the Federal Government.
Outreach Efforts
We are always seeking new ways to reach out to the wider Federal community
as well as to members of the public. In a variety of
venues, we share our mission of promoting integrity and excellence in Social
Security programs and operations. These occasions
are important opportunities to exchange information and forge partnerships.
They also give us the chance to educate the public
and inspire their public confidence in Federal programs.
Senior OIG officials addressed national audiences on current issues of interest
during this reporting
period. In February and March 2008, Inspector General O’Carroll served
as a guest lecturer in the Inspectors General
Program at Georgetown University’s Public Policy Institute. In his lecture
on “Public Policy in Action,” Mr. O’Carroll discussed the
OIG’s role in the public policy arena and the relationship of an IG with
the Agency head, Congress, and other stakeholders.
In February 2008, Inspector General O’Carroll testified before the House
Committee on Appropriations,
Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
at a hearing on the Social
Security disability backlog. Mr. O’Carroll shared with the Subcommittee
details of the OIG’s work in assessing factors contributing
to the backlog and assisting SSA in its efforts to reduce disability processing
times.
OIG employees are active in their local communities, in both personal and professional
capacities. Following are
highlights of our outreach efforts during this reporting period:
The Allegation Management Division, in partnership with representatives from
SSA’s Office of Operations, presented an interactive video teletraining
broadcast covering procedures for the Agency’s handling of OIG-referred
allegations. The goal of this outreach effort was to better inform Social Security
field
office employees on the appropriate process for fully analyzing and developing
allegations of fraud, waste and abuse. The program was
broadcast live and replayed several times throughout the day. Through this learning
initiative, OIG anticipates a higher rate of
substantiated allegations.
Susan Yuen from the New York Audit Division has been nominated for the SSA
Volunteer Service Award for her active work in four organizations: the
Organization of Chinese Americans (OCA), the Brecknock Hall Foundation, Bike
New York, and the Medical Reserve Corp (MRC). Ms. Yuen’s participation
with
the OCA included coordinating social and fundraising events. At Brecknock Hall,
Ms. Yuen volunteered on weekends by painting,
plastering and removing trash in conjunction with preservation work at the Hall.
Ms. Yuen assisted with Bike New York by serving as a
riding marshal, responsible for maintaining order and safety by directing massive
crowds of 30,000 bicyclists, and by providing office
assistance prior to the event. At the MRC, Ms. Yuen participated in workshops
for bio/physical terrorism and natural disaster
preparedness.
Agents in our Seattle Field Division made several presentations regarding the
exploitation of the elderly, ID theft education, and safeguarding personal
data.
Agents from the Chicago Field Division serve on advisory boards for the American
Arthritis Foundation, the Geauga County Police Athletic League,
Minnesota State Fraud Investigators Association, and for Smith Park in Chicago.
In addition, an Agent from the Milwaukee office is the local Federal Law Enforcement
Officers Association (FLEOA) Chapter President, and serves as the National Director
for Administration for FLEOA.
Agents from the Kansas City Field Division were instrumental in organizing
the Iowa Public Safety Officers Assistance Fund. The non-profit fund was created
to
provide immediate financial assistance to public safety officers, including
law enforcement, firefighters, and emergency medical services, and
their families in times of crisis. The First Annual Public Safety Officers Motorcycle
Ride raised over $7,000.
Agents from the Atlanta Field Division assisted the FLEOA and the National
Center for Missing and Exploited Children in the annual National Kids Day
Event in Greensboro, North Carolina. The agents participated in fingerprinting
and photographing approximately 200 children.
The Kansas City Assistant Special Agent-in-Charge participated in a “polar
bear plunge” with other Federal agents—the “Freezing Feds”—
and raised over $5,100 for the Special Olympics.
An Agent from the Boston Field Division volunteers with “Everybody Wins,” a national literacy and mentoring non-profit organization.
Hurricane Response Efforts
We continue to be actively involved in pursuing investigations of fraud related
to Hurricanes Katrina and Rita and helping SSA prepare for
similar events in the future. Because the SSN is a key identifier for the various
relief programs, SSA OIG is a critical partner in multi-agency
investigations of hurricane-related fraud. To that end we have assigned an agent
to the DOJ’s
Hurricane Katrina Fraud Task Force in Louisiana, where we have been involved in numerous joint investigations of hurricane-related fraud.
Since the inception of the Task Force, OI has opened 64 investigations and
secured 52 indictments and 45 convictions of individuals for hurricane-related
fraud. For this reporting period, our investigators made 4 arrests, opened 7
cases, secured 6 indictments and 7 convictions. Following are
highlights of our hurricane-related investigative activity during this reporting
period.
Woman Sentenced to 43 Years in Prison for Hurricane-Related Fraud
Our Birmingham office investigated an SSI recipient based on a request for
assistance from a USAO in Alabama. The USAO reported that
the woman was the subject of a Federal Emergency Management Agency (FEMA) investigation
for filing false disaster-relief claims following
Hurricane Katrina.
Our investigation revealed that the woman had been receiving SSI since 1999
based on mental retardation and mood disorders. Moreover, she
had concealed from SSA all income received from filing the false FEMA claims.
SSA subsequently terminated the woman’s SSI payments. The
investigation also revealed that the woman, working with several co-conspirators,
had filed 15 false FEMA claims using false SSNs.
After a jury trial, the woman was found guilty of 22 counts, including theft,
conspiracy, drug distribution, threatening a witness, and possession
of a firearm. Based on the minimum sentencing guidelines, she was sentenced
in January 2008 to 43 years in Federal prison and was ordered to pay
restitution to FEMA of $79,607.
Ringleader of FEMA Fraud Conspiracy Convicted
Agents from our Houston office, the U.S. Postal Inspection Service, DHS, and
the Small Business Administration revealed that a 33-year-
old Houston woman was the chief organizer of a FEMA fraud conspiracy. The woman
came to the attention of Federal law enforcement after
a Government Accountability Office review of Hurricane Katrina and Rita FEMA
claims revealed that more than 40 claims were filed under
different names using Houston mailing addresses associated with the woman. The
investigation identified that the names used in these claims were
friends and relatives of the woman who were living in Houston, not New Orleans
or Lake Charles, as stated in the claims. The woman used different
SSNs without the knowledge or authority of the true assignees in the claims
filed under her name.
Subsequent investigation identified 107 claims filed using names and addresses
connected to the conspiracy. FEMA mailed checks totaling
more than $140,000 based on these claims. In November 2007, after entering a
plea of guilty to conspiracy to commit mail fraud and aggravated
identity theft, the woman was sentenced to 57 months in Federal prison and 5
years’ supervised release. She was also ordered to pay FEMA
restitution of $143,438.
SSI Recipient Defrauds FEMA of $17,906
Agents from our Seattle office and DHS OIG determined that a 36-year-old SSI
disability recipient fraudulently applied for FEMA disaster
relief monies claiming she had been displaced by Hurricane Katrina. Actually,
the woman was residing in the State of Washington when
Hurricane Katrina struck. In addition, the woman failed to report the receipt
of FEMA funds to SSA, causing an SSI overpayment.
On November 29, 2007, after pleading guilty to making material false statements,
the woman was sentenced to three years’ probation and was
ordered to pay restitution of $21,081 ($3,175 to SSA and $17,906 to FEMA).
A Special Thank You
The diligent work, outstanding efforts, and many contributions of our entire
OIG staff make the accomplishments highlighted in this
Semiannual Report to Congress possible.
We would like to thank them for their dedicated spirit and many successes.
Reporting Requirements and Appendices
Reporting Requirements
This report meets the requirements of the Inspector General Act of 1978, as
amended, and includes information mandated by Congress.Section
Requirement
Page(s)
Section4(a)(2)
Review of legislation and regulations
N/A
Section 5(a)(1)
Significant problems, abuses, and deficiencies
6-32
Section 5(a)(2)
Recommendations with respect to significant problems, abuses, and deficiencies
8-11, 19-22
Section5(a)(3)
Recommendations described in previous Semiannual Reports on which corrective
actions are incomplete
Appendices F & G
Section 5(a)(4)
Matters referred to prospective authorities and the prosecutions and convictions
that have resulted
11-18, 23-26
Section5(a)(5) & Section 6(b)(2)
Summary of instances where information was refused
N/A
Section 5(a)(6)
List of audits
Appendix B
Section5(a)(7)
Summary of particularly significant reports
6-32
Section 5(a)(8)
Table showing the total number of audit reports and total dollar value of questioned
costs
Appendix A
Section 5(a)(9)
Table showing the total number of audit reports and total dollar value of funds
put to better use
Appendix A
Section 5(a)(10)
Audit recommendations more than 6 months old for which no management decision
has been made
Appendix A
Section5(a)(11)
Significant management decisions that were revised during the reporting period
N/A
Section 5(a)(12)
Significant management decisions with which the Inspector General disagrees
Appendix D
37
Appendix A: Resolving Audit Recommendations
The following chart summarizes SSA’s responses to our recommendations
for the recovery or redirection of questioned and unsupported costs. Questioned
costs are those costs that are challenged because of a violation of law, regulation,
etc. Unsupported costs are those costs that are questioned
because they are not justified by adequate documentation. This information is
provided in accordance with P.L. 96-
304 (the Supplemental Appropriations and Recession Act of 1980) and the
Inspector General Act of 1978, as amended.
Reports with Questioned Costs for the Reporting Period
October 1, 2007 – March 31, 2008
Number
Value
Questioned
Value
Unsupported
A.
For which no management decision had been made by the commencement of the reporting
period.
19
$668,156,829
$106,173
B.
Which were issued during the reporting period.
9a
$630,347,679
$1,789,163
Subtotal (A + B)
28
$1,298,504,508
$1,895,336
Less:
C.
For which a management decision was made during the reporting period.
15
$649,368,743
$72,736
i.
Dollar value of disallowed costs.
14
$647,428,581
$72,736
ii.
Dollar value of costs not disallowed.
1
$1,940,162
$0
D. For which no management decision had been made by the end of the reporting
period.
13
$649,135,765
$1,822,600
a. See Reports with Questioned Costs in Appendix B of this report.
38
Appendices
The following chart summarizes SSA’s response to our recommendations that funds be put to better use through cost avoidances, budget savings, etc.
Reports with Recommendations that Funds Be Put to Better Use Reporting Period
October 1, 2007 – March 31, 2008
Number
Dollar Value
A. For which no management decision had been made by the commencement of the
reporting period.
5
$260,221,932
B. Which were issued during the reporting period.
7a
$309,539,943
Subtotal (A + B)
12
$569,761,875
Less:
C. For which a management decision was made during the reporting period.
i. Dollar value of recommendations that were agreed to by management.
(a) Based on proposed management action.
5
$256,106,684
(b) Based on proposed legislative action.
0
$0
ii.
Dollar value of costs not agreed to by management.
0
$0
Subtotal (i + ii)
5
$256,106,684
D. For which no management decision had been made by the end of the reporting
period.
7
$313,655,191
a. See Reports with Funds Put to Better Use in Appendix B of this report.
Appendix B: Reports Issued Reports with Non-Monetary Findings
October 1, 2007 – March 31, 2008
Audit Number
Report
Issue Date
A-02-07-17049
The Effectiveness of the Social Security Administration’s 800-Number Automation
Service
10/19/2007
A-14-07-17102
Follow-up on the Social Security Administration’s Monitoring of Potential
Employee Systems Security Violations
10/29/2007
A-77-08-00002
Management Advisory Report: Single Audit of the Common-wealth of Massachusetts
for the Fiscal Year Ended June 30, 2006
11/1/2007
A-02-08-18061
Inspector General Statement on the Social Security Administration’s Major
Management Challenges
11/7/2007
A-15-07-17124
Fiscal Year 2007 Financial Statement Audit Oversight
11/7/2007
A-07-07-17055
Social Security Administration’s Controls over Redisclosure of Sensitive
Information in the Kansas City Region
11/28/2007
A-77-08-00003
Management Advisory Report: Single Audit of the State of Washington for Fiscal
Year Ended June 30, 2006
11/28/2007
A-77-08-00004
Management Advisory Report: Single Audit of the State of Wisconsin for Fiscal
Year Ended June 30, 2006
11/28/2007
A-77-08-00005
Management Advisory Report: Single Audit of the State of Colorado for Fiscal
Year Ended June 30, 2006
11/28/2007
A-04-07-27112
Controls for Issuing Social Security Number Verification Printouts
12/5/2007
A-77-08-00006
Management Advisory Report: Single Audit of the State of Alabama for Fiscal
Year Ended June 30, 2006
12/21/2007
A-77-08-00007
Management Advisory Report: Single Audit of the State of New Jersey for Fiscal
Year Ended June 30, 2006
12/21/2007
A-15-08-28105
Congressional Response - Unimplemented Audit Recommendations Since January 2001
1/31/2008
A-05-07-17082
Compliance with Disability Determination Services Security Review Requirements
2/6/2008
A-07-07-17072
Administrative Law Judges’ Caseload Performance
2/6/2008
A-77-08-00008
Management Advisory Report: Single Audit of the State of Illinois for Fiscal
Year Ended June 30, 2006
2/13/2008
A-77-08-00009
Management Advisory Report: Single Audit of the State of New York for Fiscal
Year Ended March 31, 2006
2/13/2008
A-77-08-00010
Management Advisory Report: Single Audit of the State of Connecticut for Fiscal
Year Ended June 30, 2006
2/13/2008
A-15-07-17061
Process for Awarding Sole Source Acquisitions
2/14/2008
A-08-07-17151
Administrative Costs Claimed by the Alabama Disability Determination Service
2/29/2008
Reports with Non-Monetary Findings
October 1, 2007 — March 31, 2008
Audit Number
Report
Issue Date
A-15-07-27176
Administrative Costs Claimed by the Connecticut Disability Determination Services
2/29/2008
A-04-07-17084
Partnership for Strong Families, an Organizational Representative Payee for
the Social Security Administration
3/14/2008
A-06-08-18005
The Appeals Process for Medicare Part D Low-Income Subsidy Eligibility Determinations
3/14/2008
A-08-07-17143
Follow-up: Assessment of the Enumeration at Entry Process
3/20/2008
A-15-08-28012
Performance Review of the Social Security Administration’s Contract with
E-Structors, Inc. For the Disposal of Sensitive Documents (Limited Distribution)
3/20/2008
A-77-08-00011
Management Advisory Report: Single Audit of the Commonwealth of Puerto Rico
Department of the Family for the Fiscal Year Ended June 30, 2004
3/28/2008
A-77-08-00012
Management Advisory Report: Single Audit of the Commonwealth of Puerto Rico
Department of the Family for the Fiscal Year Ended June 30, 2005
3/28/2008
A-13-07-17074
Follow-up: The Social Security Administration’s Management of Its Federal
Employees’ Compensation Act Program
3/31/2008
Reports with Questioned Costs
October 1, 2007 — March 31, 2008
Audit Number
Issue Date
Report
Dollar Amount
A-09-07-17119
10/25/2007
Controls over Miscellaneous Payments Made Through the Single Payment System
$105,690,039
A-77-08-00001
11/1/2007
Management Advisory Report: Single Audit of the State of Florida for the Fiscal
Year Ended June 30, 2006
$47,065
A-01-07-27116
12/12/2007
Social Security Administration Employees Receiving Benefits
$245,311
A-01-06-15069
12/13/2007
Administrative Costs Claimed by the Rhode Island Disability Determination Services
$1,751,060
A-06-06-16135
2/19/2008
The Social Security Administration’s Income and Resource Verification Process
for Individuals Applying for Help with Medicare Prescription Drug Plan Costs
$473,494,350
A-01-07-17038
3/14/2008
Follow-up on the Impact on the Social Security Administration’s Programs
When Auxiliary Beneficiaries Do Not Have Their Own Social Security Numbers
$7,577,002
A-09-07-17134
3/14/2008
Adjustment of Disabled Wage Earners’ Benefits at Full Retirement Age
$43,074,961
A-15-08-18019
3/20/2008
The District of Columbia Disability Determination Division’s Internal Controls
over the Accounting and Reporting of Administrative Costs
$224,354
A-02-07-27077
3/27/2008
The Henry Ittleson Center - An Organizational Representative Payee for the Social
Security Administration
$32,700
TOTAL
$632,136,842
Reports with Funds Put to Better Use
October 1, 2007 — March 31, 2008
Audit Number
Issue Date
Report
Dollar Amount
A-01-07-27116
12/12/2007
Social Security Administration Employees Receiving Benefits
$124,176
A-15-07-17095
1/11/2008
The Social Security Administration’s Ability to Reach Individuals Using
the Social Security Statement
$1,911,000
A-04-07-17028
1/22/2008
Adjustment of Overpayment Balances Related to Title II Critical Payments
$14,040,881
A-06-06-16135
2/19/2008
The Social Security Administration’s Income and Resource Verification Process
for Individuals Applying for Help with Medicare
Prescription Drug Plan Costs
$223,594,840
A-09-07-17134
3/14/2008
Adjustment of Disabled Wage Earners’ Benefits at Full Retirement Age
$68,088,960
A-09-07-17103
3/20/2008
Administrative Costs Claimed by the Washington Disability Determination Services
$1,516,055
A-15-08-18019
3/20/2008
The District of Columbia Disability Determination Division’s Internal Controls
over the Accounting and Reporting of Administrative Costs
$264,031
TOTAL
$309,539,943
Appendix C: Reporting Requirements Under the Omnibus Consolidated Appropriations Act of FY 1997
To meet the requirements of the Omnibus Consolidated Appropriations Act of 1997, P.L. 104-208, we are providing requisite data for the first half of FY 2008 from the Offices of Investigations and Audit in this report.
Office of Investigations
We are reporting over $38 million in SSA funds as a result of our investigative activities in this reporting period. These funds are broken down in the table below.
Investigative Activities
1st Quarter
2nd Quarter
Total
Court Ordered Restitution
$5,731,555
$5,903,778
$11,635,333
Recoveries
$13,420,798
$10,156,052
$23,576,850
Fines
$990,585
$1,392,621
$2,383,206
Settlements/Judgments
$305,704
$299,826
$605,530
TOTAL
$20,448,642
$17,752,277
$38,200,919
Office of Audit
SSA management has informed us that it has completed implementing recommendations from 11 audit reports during this time period valued at over $2.6 billion.
Social Security Administration Employees Receiving Benefits(A-01-07-27116, 12/12/2007)
No Recommendation – SSA took action during the audit on actual findings. The implemented value of this recommendation is $124,176.
An Individual Representative Payee for the Social Security Administration in the San Francisco Region (A-09-07-17063, 7/3/2007)
We recommended that SSA ensure that the Representative Payee use actual rather than estimated expenses to complete the Representative Payee Reports for all beneficiaries in its care. The implemented value of this recommendation is $3,349.
Contract for the Migration of I.Levy Software at Disability Determination Services (Limited Distribution) (A-07-07-17033, 5/24/2007)
We recommended that SSA continue to monitor the interest payments made on contracts and make additional improvements to its oversight process, when appropriate. The implemented value of this recommendation is $3,000.
Adjustment of Widow’s Insurance Benefits at Full Retirement Age (A-01-07-27122, 5/14/2007)
We recommended that SSA review the 10,210 cases in our population and take action to pay the additional amounts due the widows. The implemented value of this recommendation is $137,808,597.
Administrative Costs Claimed by the Commonwealth of Puerto Rico Disability Determination Program (A-06-06-16117, 3/26/2007)
We recommended that SSA ensure unliquidated obligations totaling $465,323 in FY 2004 and $641,927 in FY 2005 are reviewed and obligations no longer valid are deobligated.
Direct Deposits for Multiple Title XVI Recipients into the Same Bank Account (A-02-06-25141, 3/23/2007)
We recommended that SSA pursue recovery efforts, as warranted, for overpayments identified in this report. The implemented value of this recommendation is $264,390.
Government Pension Offset Exemption for Texas School Districts’ Employees (A-09-06-26086, 1/08/2007)
We recommended that SSA reexamine the decisions to grant an exemption from
Government Pension Offset (GPO) for the 168 spouses in our sample. We also recommended
that SSA identify and reexamine any decisions to grant exemptions from GPO for
spouses in the population
of 20,248 1-day workers employed by the 7 school districts. We also recommended
that SSA review the 1-day worker programs at the other eight Texas independent
school districts identified in the allegation to determine whether their 1-day
workers programs would result in inappropriate
GPO exemptions. The implemented value of these recommendations are $2,537,391,759.
Supplemental Security Income Recipients Whose Medicare Benefits Were Terminated Due to Death(A-01-06-26105, 11/14/2006)
We recommended that SSA review the cases in our audit population and take appropriate action to terminate the Supplemental Security Income (SSI) payments for the deceased individuals and remove the erroneous death information for those individuals who are alive and reinstate their Medicare benefits. The implemented recommendation is valued at $237,103.
Survivor Benefits Paid in Instances When the Social Security Administration
Removed the Death Entry from a Primary Wage Earner’s Record (A-06-06-26020,
9/26/2006)
We recommended that SSA perform death verifications for each of the 307 records with survivor benefit payments identified in the report and take appropriate action. The implemented value of this recommendation is $4,600,155.
Impact of Statutory Benefit Continuation on Supplemental Security Income Payments Made During the Appeals Process (A-07-05-15095, 5/10/2006)
We recommended that SSA remind SSA components of the proper procedures for terminating SSI benefits following medical cessation decisions. The implemented value of this recommendation is $13,869,533.
Collection of Old-Age, Survivors and Disability Insurance Overpayments to Representative Payees for Deceased Beneficiaries (A-13-03-13049, 7/21/2004)
We recommended that SSA identify and refer all eligible delinquent representative payee OASDI overpayment debts to Treasury’s Financial Management Service for tax refund and administrative offset. The implemented value of this recommendation is $2,278,241.
Appendix D: Significant Management Decisions With Which the Inspector General Disagrees
Controls for Issuing Social Security Number Verification Printouts (A-04-07-27112, 12/5/2007)
Results of Review: Our objective was to determine whether SSA’s internal
controls over the issuance of Social Security Number (SSN) Verification Printouts
(SSN Printout) were effective. In FY 2006, SSA issued about 6.34 million SSN
Printouts. The SSN Printout contains the same basic information as the Social
Security card. Accordingly, controls over the issuance of these documents should
be adequate to ensure the individual requesting an SSN Printout is the correct
numberholder. However, we found that SSA’s controls over the issuance of
these sensitive documents were much less stringent than for Social Security
cards.
Because SSA believed the Privacy Act allows numberholders a right to this information—without
placing undue burden on the requestor—the Agency disagreed with several
of our recommendations, which were designed to strengthen controls within the
SSN Printout issuance process.
Recommendation: We encouraged the Agency to issue a reminder to field office staff that SSN Printouts should only be issued when the numberholder expresses an immediate need for a verification of the SSN.
Agency Response: SSA disagreed. The Agency stated that its current policy does not dictate that the numberholder express an “immediate need” for this information, and the Privacy Act protects an individual’s right to access his or her records. Furthermore, OMB’s Privacy Act guidelines indicate that the granting of access may not be conditioned upon any requirement to state a reason or otherwise justify the need to gain access to a particular record.
Appendix E: Collections from Investigations and Audits
The Omnibus Consolidated Appropriations Act of 1997 (P.L. 104-208) requires us to report additional information concerning actual cumulative collections and offsets achieved as a result of OIG activities each semiannual period.
Office of Investigations
Total Restitution Reported by DOJ as Collected for SSA
FY
Total Number
of Individuals
Assigned Court
Ordered Restitution
Court Ordered
Restitution for
This Period
Total Restitution
Collected by DOJ
2006
578
$18,817,909
$1,447,402
2007
655
$26,435,626
$898,7641
2008
318
$11,635,333
See Footnote 2
TOTAL
1,551
$56,888,868
$2,346,166
1Reflects collection for October 1, 2006– June 30, 2007.
2DOJ advised it is currently migrating collection data to a new computer system and the data is unavailable at this time. Last available collection data is for the period ending June 30, 2007.
Recovery Actions Based on OI Investigations
FY
Total Number of Recovery Actions Initiated
Amount for Recovery
2006
1,865
$35,492,314
2007
2,514
$44,081,776
2008
1,131
$23,576,850
TOTAL
5,510
$103,150,940
Office of Audit
The following chart summarizes SSA’s responses to our recommendations for the recovery or redirection of questioned and unsupported costs. This information is prepared in coordination with SSA’s management officials and was current as of March 31, 2008.
SSA’s Responses to OIG’s Recommendations
Recovery or Redirection of Questioned and Unsupported Costs
FY
Reports with Questioned Costs
Questioned/Unsupported Costs
Management Concurrence
Amount Collected or to be Recovered
Amount Written-Off/Adjustments
Balance
2006
24
$1,373,740,596
$1,245,415,125
$1,235,508,053
$129,567,145
$8,665,398
2007
36
$1,261,104,0451
$865,934,681
$493,510,844
$362,660,638
$404,932,563
2008
9
$632,136,842
$3,556,026
$3,331,672
$0
$628,805,170
TOTAL
69
$3,266,981,483
$2,114,905,832
$1,732,350,5692
$492,227,783
$1,042,403,131
1This dollar amount shows an increase in Questioned Costs due to new findings in report, Supplemental Security Income Recipients Eligible as Disabled Adult Children Under the Old-Age, Survivors and Disability Insurance Program (A-13-07-17073).
2The amounts in the table regarding collections, recoveries, and write-offs/adjustments were not verified by the OIG.
Appendix F: Significant Monetary Recommendations From Prior FYs for Which Corrective Actions Have Not Been Completed
Impact of Statutory Benefit Continuation on Disability Insurance Benefit Payments Made During the Appeals Process (A-07-05-15094, 12/21/2006)
Results of Review: We evaluated the financial impact on the Disability Insurance
(DI) Trust Fund when beneficiaries continued receiving DI benefits while appealing
a medical
cessation decision. We estimated that SSA paid approximately $86.4 million in
DI benefits to beneficiaries who received an appeals decision from an ALJ between
October 1, 2002 – September 30, 2004. Of this amount, we projected that
about $43.9 million became overpayments when an ALJ reaffirmed that the
beneficiary was no longer eligible to receive DI benefits.
Recommendation: SSA enhance the business process to allow more timely decisions on medical cessation appeals.
Valued at: $44,997,323 in funds put to better use.
Agency Response: SSA agreed with the recommendation.
Corrective Action: Improvements to the timely processing of medical cessation cases involving benefit continuation should be done. However, in making such improvements, consideration should be given to current staffing levels and the ability to maintain the timely processing of other priority workloads. A balanced approach in managing all workloads with an eye on receipt patterns is important while making enhancements to improve the processing of medical cessation appeals.
ODAR is working with the Office of Systems to generate alerts for both paper
and electronic cases to ensure that claimants whose benefits should be terminated
are
processed in a timely manner. ODAR also plans to modify the relevant instructions
once the additional automation measures are in place. In addition, ODAR is working
on an electronic CDR process that will further enhance the hearing offices’
ability to decide medical cessations more timely.
Impact of Statutory Benefit Continuation on Supplemental Security Income Payments made During the Appeals Process (A-07-05-15095, 5/10/2006)
Results of Review: We evaluated the financial impact on the General Fund when
recipients continued receiving Supplemental Security Income (SSI) payments while
appealing a medical cessation decision. We estimated that SSA paid over $199
million in SSI payments to recipients who received an appeals decision from
ODAR (formerly the Office of Hearings and Appeals) between October 1, 2002 –
September 30, 2004. Of this amount, about $146 million became
overpayments when Office of Hearings and Appeals reaffirmed the recipient was
no longer eligible to receive SSI payments.
Recommendation: Enhance the business process to allow more timely decisions on medical cessation appeals.
Valued at: $158,778,983 in funds put to better use.
Agency Response: SSA agreed with the recommendation.
Corrective Action: Enhancing the business process may allow for improved stewardship and more timely decisions regarding SSI cessation cases and benefit continuation during the appeal period. SSA intends to decrease processing time in all disability appeals through the implementation of eDib and the new disability regulations.
Processing times reflected in the report indicate that SSA is following the
regulations and ALJs are following HALLEX guidelines that include assignment
of continuing benefit disability cessation cases as 7th of 11 categories of
priority cases they may be processing. There are significant reasons for the
categorization of these priorities, and SSA cannot justify moving this category
of cases ahead of the others. Although SSA recognizes its responsibility to
stewardship, the Agency must at times balance that against service obligations.
Therefore, at this time, SSA is not in a position to support segregating cases
that are receiving benefit continuation and
processing those cases first.
Significant Monetary Recommendations From Prior Semiannual for Which Recent Corrective Action Has Been Made
Impact of Statutory Benefit Continuation on Supplemental Security Income Payments Made During the Appeals Process (A-07-05-15095, 5/10/2006)
Recommendation: Remind SSA components of the proper procedures for terminating SSI benefits following medical cessation decisions.
Valued at: $13,869,533 in funds put to better use.
Appendix G: Significant Non-Monetary Recommendations From Prior FYs for Which Corrective Actions Have Not Been Completed
The Social Security Administration’s Program For Issuing Replacement Social Security Cards to Prisoners (A-08-06-16025, 7/13/2006)
Results of Review: In response to the Intelligence Reform and Terrorism Prevention Act of 2004, SSA implemented policies that require applicants for replacement Social Security cards to produce specific identity documents. However, prisoners are not always able to produce such documents. To assist these prisoners, SSA field offices may enter into written agreements or Memoranda of Understanding (MOU) with prisons, which allow authorized prison officials to certify that they have extracted relevant information from the official prisoner record to verify the prisoner’s identity. While some prison officials attempted to comply with this requirement, we observed that some did not. As a result of our review, we made several recommendations.
Recommendation: Perform a review at each prison with which it is considering executing an MOU to ensure its procedures for establishing prisoner identity are sufficient to ensure SSN integrity and compliance with the intent of the Intelligence Reform and Terrorism Prevention Act of 2004.
Agency Response: SSA agreed with the recommendation. The Agency formed a workgroup to address this recommendation and other issues dealing with the enumeration of prisoners. The workgroup will provide the appropriate support to implement this recommendation.
Corrective Action: In January 2007, SSA employees visited a Federal prison in Petersburg, Virginia to observe the prisoner intake process and discuss the types of documents used to identify a Federal prisoner. Based on this visit, the workgroup agreed on a prisoner enumeration process covering all Federal facilities. The Agency has made significant progress in completing an MOU with the Bureau of Prisons. The workgroup has reconvened and is currently developing policy and procedures to cover State and local facilities.
Recommendation: Require that field offices perform annual on-site reviews of
prison procedures for submitting prisoner replacement SSN applications and required
evidence
and take corrective action as needed Agency Response: SSA agreed with the recommendation.
Corrective Action: SSA agreed in principle that periodic onsite reviews of prisons would be a good idea. The prisoner enumeration workgroup is investigating this issue to determine what is practical given the limited resources in the region and field offices.
Glossary of Acronyms
ALJ
Administrative Law Judge
ATM
Automated Teller Machine
CDI
Cooperative Disability Investigative Program
CMP
Civil Monetary Penalty
DCN
Double Check Negotiation
DDS
Disability Determination Services
DHS
Department of Homeland Security
DOJ
Department of Justice
EAE
Enumeration at Entry
FEMA
Federal Emergency Management Agency
FLEOA
Federal Law Enforcement Officers Association
FRA
Full Retirement Age
FY
Fiscal Year
GPO
Government Pension Offset
HHS
Department of Health and Human Services
HUD
Department of Housing and Urban Development
ID
Identification card
IO
Immediate Office
IRS
Internal Revenue Service
IT
Information Technology
MBR
Master Beneficiary Record
MOU
Memorandum of Understanding
OA
Office of Audit
OASDI
Old-Age, Survivors, and Disability Insurance
OCCIG
Office of the Chief Counsel to the Inspector General
ODAR
Office of Disability Adjudication and Review
OI
Office of Investigations
OIG
Office of the Inspector General
SPS
Single Payment System the Act
Social Security Act
SSA
Social Security Administration
SSI
Supplemental Security Income
SSN
Social Security Number
USAO
U.S. Attorney’s Office
USMS
U.S. Marshals Service
How to Report Fraud
The SSA OIG Fraud Hotline offers a means for you to provide information on suspected fraud, waste, and abuse. If you know of current or potentially illegal or improper activities involving SSA programs or personnel, we encourage you to contact the SSA OIG Fraud Hotline.
Call 1-800-269-0271
Write Social Security Administration
Office of the Inspector General
Attention: SSA Fraud Hotline
P. O. Box 17768Baltimore, MD 21235
Fax 410-597-0118
Internet www.socialsecurity.gov/oig
To obtain additional copies of this report please visit our web site at www.socialsecurity.gov/oig