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21–377 2016

PROTECTING SOCIAL SECURITY FROM WASTE, 

FRAUD, AND ABUSE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SOCIAL SECURITY 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

MAY 18, 2016

Serial 114–SS04 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

KEVIN BRADY, Texas, Chairman 

SAM JOHNSON, Texas 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

PAT MEEHAN, Pennsylvania 

KRISTI NOEM, South Dakota 

GEORGE HOLDING, North Carolina 

JASON SMITH, Missouri 

ROBERT J. DOLD, Illinois 

TOM RICE, South Carolina 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

DAVID STEWART, Staff Director 

NICK GWYN, Minority Chief of Staff 

SUBCOMMITTEE ON SOCIAL SECURITY 

SAM JOHNSON, Texas, Chairman 

ROBERT J. DOLD, Illinois 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

TOM RICE, South Carolina 

XAVIER BECERRA, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

JIM MCDERMOTT, Washington 


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C O N T E N T S 

Page 

Advisory of May 18, 2016 announcing the hearing .............................................. 2 

WITNESS 

The Honorable Patrick P. O’Carroll Jr., Inspector General, Social Security 

Administration ..................................................................................................... 6 


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PROTECTING SOCIAL SECURITY FROM 

WASTE, FRAUD, AND ABUSE 

WEDNESDAY, MAY 18, 2016 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON SOCIAL SECURITY, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:01 a.m., in Room 

B–318, Rayburn House Office Building, the Honorable Robert Dold 

presiding. 

[The advisory announcing the hearing follows:] 


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Mr. DOLD. The hearing will come to order. Good morning and 

welcome to today’s hearing on Protecting Social Security from 

Waste, Fraud, and Abuse. Today we will hear from the Social Security Inspector General on what he sees are the big challenges facing Social Security, and where Social Security can do a better job 

at protecting taxpayer dollars. 

For those of you who may not know, Mr. O’Carroll has served as 

Social Security Inspector General for the past 12 years and will be 

retiring at the end of the month. Under his leadership the Office 

of Inspector General has engaged in a number of antifraud initiatives, including the expansion of the Cooperative Disability Investigations units. Overseeing investigations that have lead to the recovery and savings of hundreds of millions of trust fund dollars, the 

conviction of hundreds of crooks, and has protected Social Security 

employees from threats of violence against employees and facilities. 

Mr. O’Carroll we want to thank you for your service to our country 

and congratulations on a well deserve retirement. 

As you know well, hardworking taxpayers fund Social Security 

Administration and they rightly expect that the Social Security Administration will do all it can to prevent waste, fraud and abuse. 

So when Americans hear and read in the news about stories of 

hundreds of millions of dollars, of fraud in Puerto Rico, and New 

York, or the agency spending over $300 million on an IT project 

that has yet to even work, you can’t blame them for asking questions. Sometimes Social Security’s track record does not inspire all 

that much confidence. 

As members of this subcommittee, it is our job to make sure that 

Social Security is spending their money in a way that doesn’t violate the taxpayers’ trust by paying benefits to those trying to cheat 

the system or wasting funds on projects that don’t work. As the 

longest serving inspector general for the SSA, Mr. O’Carroll knows 

all about the challenges the agency faces that put tax dollars at 

risk. For example, and as many of you may know, this subcommittee has raised concerns over the years about Social Security’s long-term strategic planning. 

Today we will hear that Social Security still does not have a plan 

that includes specific measurable goals or outlines a strategy to 

make sure Americans get the service they expect and deserve from 

Social Security. And this is after they have spent about $1.5 million on contractors to help them. 

Social Security faces some very real challenges that I am afraid 

are only going to get worse over time and the representative payee 

program is one of them. A recent study by the Institute of Medicine 

raised serious questions about Social Security’s ability to decide if 

someone needs a representative payee. Earlier this year the Social 

Security Advisory Board also raised serious concerns about this 

program. 

Last fall the Bipartisan Budget Act included the biggest changes 

to Social Security since 1983, and some additional tools to help 

fight fraud. This includes expanding Cooperative Disability Investigations units to cover every State and new and harsher penalties 

for those who attempt to defraud Social Security. These tools along 

with others are a step in the right direction when it comes to protecting taxpayer dollars. 


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Mr. O’Carroll we thank you for being here today, thank you 

again for your service to our country. We look forward to hearing 

your testimony. 

I now would like to recognize Mr. Becerra for his opening statement. 

Mr. BECERRA. Mr. Chairman, thank you very much. 

Mr. O’Carroll, congratulations to you on your service to our country and to the many people who rely on Social Security. 

Mr. Chairman, Social Security must work continuously to prove 

to all those people in America who paid into it, over the years, that 

their benefits will be there. And that is perhaps why over 80 years 

Social Security has been able to pay in full and on time to every 

American who contributed since its inception. 

The other thing that Social Security must do is make sure, like 

any organization, it provides quality service in dispensing those 

benefits because people have paid through their taxpayer dollars 

for that. 

And finally, as the chairman points out, the last thing we want 

to see is that the money that people contribute to Social Security 

into the trust fund is used for the wrong reasons, whether because 

of fraud, or waste or abuse. And so the Social Security system and 

all the people, the good people who work for it, including Mr. 

O’Carroll, have an obligation for the people who are paying their 

salaries and paying for this to happen to do it the right way. 

Over the last decade there are some 10 million more Americans 

today who are receiving Social Security benefits than there were 

just back in 2006, 10 million more. And because of the baby 

boomers that is going to continue to increase for quite some time. 

More and more Americans are now finally being able to take advantage of the benefits that they paid years and years to be able 

to earn and receive. 

And because Social Security has so many highly skilled employees who are there to provide the services, they have been able to 

have an on time, in full track record for 80 years. But that line of 

defense for good customer service and to fight fraud is in jeopardy. 

I would like to put up some slides. 

What we have seen here in this first slide is, it documents what 

we already know. Inadequate funding of Social Security has taken 

a toll. Let’s go to the next slide. 

Mr. O’Carroll—who is about to testify in his written testimony 

to us—makes a point, as workloads have increased and its own 

workforce has undergone a retirement wave, the Social Security 

Administration had to encounter a difficult fiscal climate and resulting in budgetary constraints. 

Resources for Social Security overall in its services and operations for more than 160 million Americans who are paying into it, 

and some 50 to 60 million Americans who are receiving their benefits, those resources have fallen. The severe underfunding is evident here in these slides as you can see. 

If you were to take a look at the chart on the left, the funding 

that Social Security has received overall has fallen over the last 6 

years. And if you were to take out the money that Congress has 

given to do fraud detection, to fight the fraudsters, the cuts would 

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curity Administration provides to a growing number of people collecting the benefits, which are reflected in the chart to the right. 

We are providing, as Congress, fewer and fewer resources to an 

agency that is having more and more people who are putting— 

making a demand on its services and rightfully so because they 

paid for them. 

Congress is shortchanging Social Security and Americans who 

paid for that Social Security are watching Social Security move towards a system of mediocrity. Congress is baking in mediocrity, 

into the Social Security system, if we don’t provide the resources 

to handle a growing number of Americans who expect to get their 

services. 

Now Social Security still does its work at less than 1 percent cost 

in administration. Put it another way, you won’t find a company, 

an insurance company or any company in America that can say it 

operates at 1 percent administrative cost. And if you can, please 

put them before us because we want to learn from them. But Social 

Security is doing yeoman’s work with fewer and fewer resources. 

Mr. O’Carroll will testify to some of the activities that Social Security must do, but let’s remember a few things. If Social Security 

has fewer frontline people working for it today, and this chart reflects it, than it had in 2010, to deal with an increase in the number of tens of millions of people who are receiving benefits, some 

10 million more people over the last 10 years, it becomes very difficult for those people—a shrinking number of workers—to provide 

those services. 

And so Mr. Chairman, it is important—next slide please—as you 

can see backlogs grow. Next slide—wait times for appeals for people who paid into the system grow. The next slide. And people 

making calls to Social Security for services must wait longer. It is 

not the way we should operate. We have to make sure that Social 

Security can have the resources it needs to provide the services to 

people who paid into the system. 

Mr. Chairman, with that, I will yield back the balance of my 

time. 

Mr. DOLD. Thank you, Mr. Becerra. 

As is customary any member is welcome to submit a statement 

for the hearing record, but before we move on to our testimony 

today I want to remind our witness to limit your oral statements 

to 5 minutes. Obviously your entire statement will be placed into 

the record for the hearing. 

Without objection, all the written testimony will be made a part 

of the hearing record. So we have one witness today, seated at the 

table is Patrick P. O’Carroll, Jr., Inspector General of the Social Security Administration. Mr. O’Carroll, you are recognized for your 

oral testimony. 

STATEMENT OF THE HONORABLE PATRICK P. O’CARROLL, JR., 

INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION 

Mr. O’CARROLL. Good morning Chairman Dold, Ranking Member Becerra, and members Black, Renacci, Kelly, Smith, Larson 

and Mr. McDermott. I regret that Chairman Johnson could not 

make it today. I am happy to be here. 


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Last August a 38-year old teacher’s aide received her last Social 

Security disability check after 8 years of collecting them for a bad 

back, a condition that never existed. A disability examiner stopped 

payment based on evidence from our Cooperative Disability Investigations unit in Baltimore in one of its very first cases. This 

woman told SSA she couldn’t drive or take care of herself because 

of a back disorder and depression. She even used a walker at a 

medical exam. However, CDI observed her walking, working, driving, and actively living her life with no sign of back pain or mental 

problems. She soon admitted she didn’t deserve the benefits. That 

one case saved us all about $100,000, probably much more given 

her young age. The Baltimore CDI unit exists because of this subcommittee, so on behalf of the taxpayers I thank all of you. 

During my tenure as Inspector General, you have demanded rigorous oversight that has helped make Social Security better for all 

of us. So today as always I am pleased to appear before you for 

what is probably my last time. Thank you for asking me to share 

my observations gleaned from a decade of overseeing Social Security’s programs and operations. 

Despite the many things that we have accomplished together, 

much work remains. All of us will likely rely on Social Security at 

some point and SSA has a long tradition of serving citizens and 

meeting their needs. But that mission must never outweigh the 

agency’s responsibility to be a good steward of the $2.5 billion it 

pays out each and every day. 

I want to share three ways that SSA can achieve this balance. 

First, the agency must prioritize program integrity and look for innovative ways to identify improper payments and fraud. Thanks to 

your subcommittee, the Bipartisan Budget Act contains a provision 

increasing the cap on SSA’s program integrity spending and it allows SSA to use those funds to work CDRs, open new CDI units 

and hire special assistant U.S. attorneys. I am pleased that the act 

authorizes SSA to access employer data about disability applicants’ 

wages. 

For years we have seen potential from many other data matches, 

government agencies, and third party sources that will reduce payment errors and identify fraud proactively. This has been a personal crusade of mine as IG and I hope to continue my work on 

this issue even after I retire. 

Second, SSA must modernize and secure its information systems. 

One of its first efforts to modernize the Disability Case Processing 

System or DCPS has come under serious scrutiny. We have already 

issued two reviews on DCPS to inform the subcommittee about its 

challenges. And we have two ongoing DCPS audits that will shed 

more light on a process that has not been very transparent. 

SSA must also do more to remediate the significant deficiency 

and internal controls and information security that we have reported over the past 4 years. In an environment where high profile 

data breaches have occurred at other agencies, we must ensure the 

same does not happen at SSA. 

Third, SSA must maintain its antifraud momentum and support 

OIG efforts. In 2014 we arrested over 100 people, many of them retired New York City police officers and firefighters, in a single disability fraud scheme, totaling $30 million dollars. After you held a 


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hearing on that case you asked SSA for a plan to address disability 

fraud. In response, the acting commissioner asked us to expand 

CDI. And now you have given SSA a mandate in the Bipartisan 

Budget Act to further expand CDI to all 50 States. 

We have opened 12 new CDI units in less than 2 years, an impressive feat of collaboration and cooperation. We have also saved 

taxpayer money as a result with dozens more cases like the teacher’s aide that I discussed at the beginning. 

Finally, the recent arrests of attorney Eric Conn and Judge 

David Daugherty demonstrate our commitment to pursing third 

party facilitators, people who violate the public trust by exploiting 

their knowledge of the system for personal gain. 

Our efforts to identify and dismantle these schemes will save 

taxpayers many millions of dollars and increase public confidence 

in the integrity of SSA’s programs. As I prepare to step down, I 

know OIG will continue to protect Social Security from fraud, 

waste and abuse. Acting Inspector General Gale Stone and her outstanding staff will work with you and the agency to provide independent oversight of these vital programs. 

It has truly been an honor to serve the American public in this 

capacity. Thank you for asking me to be here today and for your 

commitment to improving Social Security. And I will be happy to 

answer any questions. 

[The prepared statement of Mr. O’Carroll follows:] 


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Mr. DOLD. Mr. O’Carroll, thank you for your testimony. I want 

to remind members that again we will have 5 minutes for questioning each. I will start that time. 

So, Mr. O’Carroll, again thank you for your service to our country 

in the Social Security Administration. As your time as the I.G. is 

coming to close, I certainly know that protecting taxpayer resources 

is a priority of yours and certainly of ours. If we can take a look 

at, and just have you expand on, your top three things that we can 

be doing or that the Social Security Administration should be doing 

to save taxpayer dollars without compromising service to the public. 

Mr. O’CARROLL. Well, a number of issues on that, Mr. Chairman. First, and the biggest one I think we are all concerned about, 

is the IT security of Social Security. That is something that is a 

high priority of this committee, and a high priority of my organization. We have been watching all the other breaches of government 

agencies on it. We have been trying to identify what vulnerabilities 

there are at SSA, plug those holes up, and give advice to SSA. Anyway that is right at the top of it. 

The next one we have been talking about, which is what the 

Budget Act recommended, is that we need to be proactive. SSA 

needs to be proactive in its stewardship. And what we are doing 

is expanding the CDI program, which has been something that, I 

guess we generated out of this committee at the very beginning of 

my term. It is extremely effective; it is at the front end; it is before 

fraud is committed. It is a partnership of us, SSA and the States. 

It is very effective, works very well and sends a signal that we 

don’t tolerate fraud of SSA’s programs. 

Mr. DOLD. In your testimony you also discuss the Disability 

Case Processing System or the DCPS, and some of the concerns 

that you have with regard to this program. Can you talk to us a 

little bit more about what DCPS is supposed to do, the current status of the project and how much Social Security has spent thus far 

to date? 

Mr. O’CARROLL. Yes, Mr. Chairman. DCPS is of great concern 

to us and the committee. We have been pretty much hand in glove 

with the committee in the oversight of SSA and the development 

of this system. And if people remember, it’s about 6 years in process. Within the last year—the SSA has gone off in a different direction in the development of it. A portion of the $300 million that has 

been put into this project is being saved. And at the same time, a 

new form of development is being used to start this new system on 

it. And that is where we have our concerns. 

Our concern with it is that they’re using pretty much a new type 

of development system to develop this processing system. And what 

happens with it is—I have got to say from our standpoint as auditors, it gives us concern. It is called Agile. And what it does, is that 

it inserts developers in with the users. It is very responsive. It is 

being used in the public sector. However, our major concern with 

this thing is the scope. This will probably be one of the biggest governmental Agile projects there is. One of the other parts of it is 

that as it develops, working with the user on it, it pretty much is 

a fluid process. And where we are concerned with it is that normally with an audit what you do is, you contract with the conVerDate Sep 11 2014 12:15 Oct 24, 2016 Jkt 021377 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\21377.XXX 21377

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tractor. They will say they will make a delivery on a certain date. 

If that date isn’t met, then you go back to the contractor and you 

readjust your procurement. 

With this type of a thing, there aren’t any real specific deliverable dates. What we are trying to do now is work with SSA, and 

have our auditors along to try to go along with the process on it, 

and see if there are ways that we can identify, sort of milestones 

along the way for deliverables. Because I am pretty sure a year 

from now if this product doesn’t come out, the first thing you are 

going to ask us is, Where did it go astray? What we need to do is 

start coming up with some guideposts along the lines of it. 

And what I have got to tell you is, it is not just us that are concerned with it. It is as I said the first time for a massive government project like this. MacKenzie is a contracting company that 

went out, took a look at this thing, and they have said they have 

some concerns; one on the scope, the size of it, and deliverable 

dates. So they too have concerns like we do. 

So I think it is one of those things that needs oversight by the 

committee, bringing SSA in frequently. We would like to be along 

with those meetings on it. Getting updates on it will help. And we 

assure you that we are doing two more status reports on it as we 

speak. We will keep informing along the way. 

Mr. DOLD. So as you mentioned, this is the first time the Agile 

method is being used on such a large scale project? 

Mr. O’CARROLL. It is. 

Mr. DOLD. Are you optimistic that this is going to work? And 

you also mentioned in your testimony that you believe it will save 

$300 million? Or what is—— 

Mr. O’CARROLL. I didn’t say that. The agency has indicated 

that there will be cost savings coming from it. We haven’t been 

able to identify that. 

Mr. DOLD. And can you give me just kind of an overall cost estimate of what you think this is going to run? 

Mr. O’CARROLL. Well, that is one of our other major concerns 

on it. We don’t know, because there are two ways. One is the core 

that is being done. It is being identified in terms of what the costs 

are going to be for the core. But the problem that we foresee with 

it is the personalization. Each of the States out there after they get 

the core, will then personalize it as much or as little as that State 

needs. In each of those cases, that is another cost out there that’s 

hard to be able to ascertain. We don’t know what the core is going 

to be and what each of the States is going to be asking for. So 

again, that is where our concerns are on it. It is hard to get any 

specifics. 

Mr. DOLD. Okay. Thank you. Mr. Becerra you are recognized. 

Mr. BECERRA. Thank you, Mr. Chairman. 

Again, Mr. O’Carroll, thank you for the work you have been 

doing. And I am going to continue to probe on this issue, because 

I think you need the resources to go out there and do the fraud detection act. I remember visiting with you in our Los Angeles bureau that you have out there. Your team is excellent, they are 

doing yeoman’s work. They wish they had more resources and more 

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vantage of that Social Security money that other people have paid. 

So thank you for everything your team has done. Please not only 

applaud them, tell them we hear them. We are trying to get more 

resources to do their work. 

I want to call your attention to the slide that I mentioned earlier, 

because it points out on the left side, the left chart, how Social Security has received less funding over the years, which makes it 

tough. The one exception of course, that we put up there, is in the 

light blue. That is the money for you to do those investigative 

projects to go after folks. Now you just mentioned that last year we 

gave you the authority to expand to 50 States. How many States 

were you in before when we said go to 50 States? 

Mr. O’CARROLL. About that point there, we are right in the low 

30s, so we are up in the high 30s, into the 40s. Just about at 40 

now. 

Mr. BECERRA. Good. And I remember when you came to Los 

Angeles I think you were barely at around 20. 

Mr. O’CARROLL. Yes. 

Mr. BECERRA. Twenty States that had an investigative team to 

go out there and detect fraud. So now you are up to 40 and with 

this money you will probably get to go to the 50 States, which is 

what we need to do. We don’t want to stop Social Security recipients from getting their money simply because we don’t have 

enough fraud detection in that State to prevent that. 

Would you be able to expand to 50 States if we cut—that light 

blue chart, the column there that gives you that extra money— 

would you be able to go to 50 States? 

Mr. O’CARROLL. No. Well, two things on it. One is that we are 

very dependent on SSA for the funding of the CDI units as we expand. My cost of a CDI unit is the lead investigator. SSA picks up 

all the other costs. As you are saying, those costs are balancing out 

with other things and the costs decline. It will decline on that—— 

Mr. BECERRA. Could you expand to 50 States if you didn’t get 

those extra resources? 

Mr. O’CARROLL. Probably not. Again, it is at SSA’s behest that 

we are going to do it. 

Mr. BECERRA. Yes. In other words, to do your good work, to 

hire the quality people, you need the resources? 

Mr. O’CARROLL. Uh-huh. 

Mr. BECERRA. And so, what makes it difficult for the Social Security Administration is if Congress continues to shortchange Social Security’s ability to do its work, whether in fraud detection or 

in basic service. Let me go to the next chart that I showed previously. 

There you go. Now there is a hidden backlog that is growing and 

growing. And while you have extra money to do the fraud detection, there are a whole bunch of services out there where we are 

not providing the adequate funding to get the job done. And it 

could be something as simple as making sure someone’s bank account change is adequately addressed so we don’t have any potential fraud in the future. Or someone gets correct information about 

their Medicare account. Or someone repays an overpayment that 

they got from Social Security that should not stay with them. Or 

perhaps they were underpaid and now Social Security has to give 


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them a little bit back. All of those things are being delayed because 

the Social Security Administration has lost about 10 percent of its 

workforce and it has gained about 10 million new people to service 

in about the last 10 years. 

Let’s go to the next chart: Appeals. You are familiar with this because so much of the fraud occurs with people who apply for Social 

Security benefits and don’t deserve it. Yet you have a whole bunch 

of folks who do deserve, who are waiting now, in the hundreds of 

days, to have their appeal for benefits heard, to get them. And this 

is what happens when—in late 2006, 2007, 2008, 2009 we started 

to provide more resources to bring down that backlog. But 2010 the 

cuts started, 2011 cuts, 2012, 2013, 2014, 2015. Finally 2016 we 

gave a little bit more. You can see what happens when you don’t 

provide the resources. 

And so, Mr. O’Carroll, I think all of us want to make sure that 

you can do your work because you have to be the front line. If 

someone gets through that door for the wrong reasons, it is going 

to take us a while to find them and capture them and get them 

off the rolls. But if you could do your work well, and that is why 

you got that extra money now to go to 50 States, then we have one 

level of protection. But we need to make sure that all the good people of Social Security have the resources they need to make sure 

the services are properly performed. If we could go to the next 

chart. 

No one wants to wait three times as long to have their phone call 

answered, even if they are not trying to do any kind of fraud. They 

are just trying to get their services. But if there aren’t personnel 

doing that because they had to help your fraud detection unit get 

the information they need, then all of a sudden people are waiting 

on the phone a long time. And so this is a matter of making sure 

our priorities are straight. People paid for their Social Security 

benefits, they earned them. We should make sure they have the 

services that go with them. Thank you. 

Mr. DOLD. Thank you, Mr. Becerra. 

Mr. O’CARROLL. May I add one comment on that, Mr. Chairman? A couple of things: one is that, Mr. Becerra, we talked about 

in the past that line on the first chart, the increase in the light 

blue there, that isn’t to my advantage on that type of thing. That 

represents different tasks that have been placed on SSA, CDRs 

specifically, that are very expensive. They go up. I have to say as 

you are taking a look at the size of SSA going down, I can put a 

chart up of the OIG and it will mirror that exactly. I have 10 percent less people than when I started. And amongst other things, 

different demands are being made on SSA for antifraud activities 

and stewardship, which we applaud. We think it is well worth it 

and the return to the taxpayer is good. But, by the same token too, 

we need more resources. SSA needs resources too. That is the balance that each of us as managers make. 

And in my case what I am doing is that by expanding CDI, it 

is getting me into the States. It is helping us with antifraud. It is 

not costing the taxpayers. 

Mr. BECERRA. Thank you. 

Mr. DOLD. Mr. Smith, you are recognized. 


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Mr. SMITH of Nebraska. Thank you, I would refrain from suggesting that all things are solved when more money is spent. I 

would hope that we could focus on technology and innovation, but 

that is not my question here today. 

In September 2015, you had an evaluation of SSA’s listing of impairments. You had indicated that the SSA is making progress on 

updating its listings, but hasn’t updated some of the listings in decades. When were the mental impairments listings last updated? 

Mr. O’CARROLL. Mr. Smith, the last time of our work on this 

thing was in 1985. And we have noticed that SSA has the intention 

of updating it. We were told, one day, possibly April or May of this 

year, an update is coming out. It has not come out as of yet. So 

we are talking about pretty much 20 years of old data. 

Mr. SMITH of Nebraska. Right. Now the SSA recently released 

a proposed regulation that would deny second amendment rights 

incidentally to certain individuals with disabilities who receive Social Security benefits. Which listings will they be using to make 

this determination? 

Mr. O’CARROLL. They will be using those same 1985 disability 

listings, specifically the one for mental disability, which is 12.0. 

Mr. SMITH of Nebraska. Okay. So the Social Security Administration repeatedly failed to meet even the self imposed and recommended deadlines to update the listings. And some listings have 

not been updated since the 1980s as you indicated. Certainly this 

is unacceptable. And now the Social Security Administration will 

be using these outdated listings to make judgments about some 

people’s second amendment rights. Is that accurate? 

Mr. O’CARROLL. That is correct. That is the direction things are 

going in, yes. 

Mr. SMITH of Nebraska. So the Social Security Administration 

has recently proposed using the need for representative payee as 

a determining factor for whether an individual should be denied his 

or her second amendment rights. Mr. O’Carroll, your office has 

identified concerns with the Social Security Administration’s capability determination process used to assess whether an individual 

needs a representative payee. Can you describe the way the capability determination process works, and discuss some of the issues 

that you have found? 

Mr. O’CARROLL. Yes, Mr. Smith. A couple of those on it—and 

I might add that we don’t have much work done on this thing.— 

What’s been coming up in this program is fairly new so we are still 

trying to work our way through it. But of major concern at the moment is the way SSA develops. I have got to say there are two 

issues on it, besides the second amendment issue. We have a lot 

of concern over the rep payee program in general. We have done 

a lot of work on it. It’s one of those things, a subjective decision 

on the part of the claims rep from SSA as to whether or not it appears a person can handle their own personal issues and whether 

they need assistance. And oftentimes that is going to be just 

whether or not they can pay bills, whether they are able to feed 

themselves, and issues along those lines. 

So there is not a scientific decision on it. It is one of pretty much 

personal opinion. And oftentimes what has been happening is that 

there are more and more people that are needing it and especially 


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as we are noticing with the expansion of the aged into the beneficiary force. There it is going to be more and more needed. 

So anyway, our biggest concern is that the level of decision on 

it is more in terms of just being able to take care of yourself, not 

whether or not you can have the right to carry a gun. 

Mr. SMITH of Nebraska. Okay. I appreciate that and I know 

that a lot of effort is being made to do the right thing. I would 

hope, and I want to support those types of efforts. But I also am 

very careful, especially as it relates to constitutional rights. 

Rewinding just a bit from your comments about the fraud that 

was determined. What followed the determination of that fraud 

that occurred? 

Mr. O’CARROLL. Which fraud that occurred? I am sorry, Mr. 

Smith. 

Mr. SMITH of Nebraska. I think the teacher’s aide that you mentioned. 

Mr. O’CARROLL. Oh. What happened with those is that—and 

again I guess the beauty of the cooperative disability investigations 

unit is that in those units we have disability examiners in place 

with us—when they have a suspicion that somebody is not actually 

as disabled as they claim they are, they turn it over to the unit. 

So what happened before with the lady is that it was brought to 

our attention, and we investigated it. In this case here it was presented for prosecution. 

Mr. SMITH of Nebraska. So then prosecution took place with a 

conviction? 

Mr. O’CARROLL. It is still in process. In fact, this one is a fairly 

recent one so I am not even too sure where it is in the process. But 

we did present it to a U.S. attorney. 

Mr. SMITH of Nebraska. With a conviction, what might happen? 

Mr. O’CARROLL. With a conviction on it we would probably be 

taking a look at a significant fine and up to 10 years in prison. 

Mr. SMITH of Nebraska. Thank you. 

Mr. DOLD. Thank you, Mr. Smith. The gentleman from Connecticut, Mr. Larson, you are recognized. 

Mr. LARSON. Thank you very much, Mr. Chairman, and thank 

you for conducting this hearing. Mr. O’Carroll, thank you for your 

incredible service to your country and the responsible job that you 

are doing; making sure that we are focusing on fraud, abuse and 

waste and weeding that out. It is essential, especially to a program. 

As Mr. Becerra pointed out, it is the most efficient and effective 

government program, but it cannot be sustainable if all the pieces 

aren’t working. And actually what we have here is an insurance 

issue. Social Security is an insurance problem. And there is fraud 

in insurance. Fraud needs to be weeded out, and we need inspectors to do that, just like the private sector provides. 

They say, insurance program. Why? Because this is funded 

through something we call FICA, the Federal insurance contribution program. Whose contribution? Yours: the people of this country. And yet the last time we have done anything with this program was in 1983. Can I see a show of hands in the audience of 

anyone’s whose insurance premiums have gone up since 1983? Of 

course they have, all across the board. But we have not addressed 

that issue at all in Congress. We have shied away from it. 


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While in private, everybody knows that when you pay into a system, especially a system that sees all the baby boomers coming 

through, we have got to make adjustments. I maintain and I hope 

we have a hearing on this because I think there is an easy pragmatic solution; a bill that we have out there that increases the benefits of Social Security by 2 percent. It says that no one can retire 

into poverty. It makes the new level 125 percent of poverty, going 

to CPIE. It is something the AARP has long advocated. You would 

have adequate funding. The expenses that the elderly incur would 

actually be based on their cost a/k/a medical devices, doctor visits, 

pharmaceuticals, heating and cooling their homes. 

And also, how about giving the elderly a tax cut that will only 

go right back into the economy? Because again, the last time we 

touched this program significantly was in 1983 so that you are 

taxed on your Social Security. If you are single and make more 

than $25,000 and if you are a married couple and make more than 

$32,000, that is a disgrace. And people are out there working because they have to, or some even if they don’t have to because they 

desire to be out there and work. 

We enact a proposal in which 11 million seniors will get a tax 

cut immediately. The big question then is, how do you pay for this? 

Well, we have two ways to pay for this. We say we should scrap 

the cap, but following the change that this committee made in the 

tax law, we should start at $400,000. $400,000 means that that 

would impact four-tenths of 1 percent of the American people. They 

will receive more in benefits, but they would pay more. 

As you all know, Bill Gates, for example, stops paying into the 

Social Security fund at noon on January 1st. And so there is a certain fairness to it all. But the most important thing that we can 

do is increase this fund by 1 percent. It hasn’t been touched. If 

your insurance company told you, look, your insurance rates are 

only going to go up by 1 percent this year, everyone would go 

through a sigh of relief. We have not taken that stance, a very 

pragmatic, and simple, and straightforward way that doesn’t increase the national debt. It doesn’t create a burden on anyone. 

But you might say, well even 1 percent—of course, as you know 

congressman, when the employer pays half, and the employee pays 

half, and we have self funded people—still can be a large expense. 

Okay, let’s phase that in over 25 years. That means the increase 

to preserve the program will be .05 percent; .05 percent, in order 

to preserve the most efficiently run government program. As Mr. 

Becerra pointed out, any insurance company would die to have a 

loss ratio in this area of efficiency, less than 1 percent. And this 

proposal, I am saying, is the only one that is actuarially sound as 

we are required by law to make sure that we produce a program 

that is 75 years solvent. This will take us into the next century. 

.05 percent for someone making $50,000 a year is 50 cents a 

week; fifty cents a week to save Social Security, to make sure that 

it’s adequately funded so that we end this discussion once and for 

all in the committee, and that millennials will know that yes, this 

program’s going to be there for them, for 50 cents a week if you 

are making $50,000. That to me is a pragmatic solution. 

Thank you for your service. I hope the committee and I hope my 

colleagues, who I know are interested in solving this problem, on 


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the other side, will grant us a hearing on what I think is a very 

pragmatic, straightforward solution to Social Security. 

Mr. DOLD. Thank you, Mr. Larson. And I think there was something about a Starbucks cup there that you forgot to mention? 

Mr. LARSON. Well, I did. It is just if you want to know—thank 

you for bringing that up. Usually I have gone all across the country 

and actually I raise this up every time. Bob, thank you so much. 

This is usually a big hit, because I say to every single elderly 

group where I am from, what do you think this costs? They all 

know. They go, $4.50. I go, That is right or 9 weeks of Social Security payments; 9 weeks of Social Security payments if you are making $50,000 a week. 

And that is what it amounts down to. When people say there is 

a pragmatic way where both tax cuts can be achieved, no one ends 

up retiring into poverty, especially women who have worked and 

paid their quarters and who get the short end of the stick—I was 

going to use other language, but—with Donald Trump maybe I 

could use this language. But I will rephrase it—— 

Mr. DOLD. The next cup of coffee is on you. 

Gentleman from Ohio, Mr. Renacci you are recognized. 

Mr. RENACCI. Thank you, Chairman Dold. And I want to also 

thank Chairman Johnson for calling this hearing to allow Mr. 

O’Carroll to have the opportunity really to discuss the challenges, 

the future challenges facing the Social Security Administration. 

I want to thank you, Mr. O’Carroll, for your testimony and for 

agreeing to testify in front of the committee today. Additionally, I 

want to thank you for your many years of public service and your 

last 10 years of service as Inspector General for the Social Security 

Administration. It is really appreciated. 

I have heard from numerous constituents in northeast Ohio who 

have been impacted by fraud or attempted fraud with Social Security, specifically Social Security numbers. Social Security numbers 

play a vital role in daily life of every American. Attempts to defraud and steal the identities of Americans, especially senior citizens is a concern that I now share with—I know I share with many 

of my colleagues. 

I also had my identity stolen. My Social Security number was 

stolen. A tax return was filed. So I do have some history with it 

as well. That is why I am concerned when the government puts the 

personal information of millions of Americans at risk by sending 

out so many documents. I have been committed to protecting Americans from identity theft; stopping the use of Social Security numbers when it just isn’t necessary. In fact last year, we were able 

to pass into law the Johnson-Doggett legislation ending the use of 

Social Security numbers on Medicare cards. So it is definitely my 

concern when I learn Social Security includes—many of the Social 

Security letters and filings include—Social Security numbers on so 

many documents. So I kind of want to, while you are here, ask you 

some questions about that. 

So what is Social Security’s plan to stop mailing out Social Security numbers? Is there some plan? Something that is being looked 

at or potentially that could be done? 

Mr. O’CARROLL. Yes. And like you, I applaud the fact that one 

of our first, or one of my first under my watch, issues was identity 


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theft and the misuse of the SSN and the publication of the SSN. 

We pretty much, first through this committee, brought it to the attention to the military, and then we brought it to the attention of 

HHS and then Medicare. And now internally we have been taking 

a look at SSA. We audited all the forms that are going out. We 

identified which forms are using the SSN still, brought them to the 

attention of SSA, and made the recommendation that it be taken 

off. And SSA has responded that the number they use is so core 

in their business process that it is difficult to do. 

So what we are asking the agency to do is to come up with 

timelines in terms of which ones they can take off and to start 

being able to tell us and the committee when they are going to stop 

using them on documents. But it is probably going to take a while. 

Mr. RENACCI. Thank you. I also know that when tax returns 

are filed, when a W–3 is filed—we now have it so that people get 

their W–2 at the end of January. And hopefully next year most 

companies are going to actually under law, have to file with the Social Security Administration their W–2 information. But I know 

there is a delay even there, in getting it to the IRS. What are some 

of the things that Social Security Administration will do to try to 

move those documents a little quicker if possible to the IRS to 

match up this information? 

Mr. O’CARROLL. I will tell you Congressman, we haven’t 

worked on that one yet. So I really can’t make a comment on it. 

But what I can do is we will take a look at it and get back to you. 

Mr. RENACCI. I would appreciate that. These are the issues 

that I know affect identity theft. And again, I want to thank you 

for what you have done. I appreciate your work and dedication to 

our country and your service. I yield back. 

Mr. O’CARROLL. Thank you very much. 

Mr. DOLD. Thank you, Mr. Renacci. The gentleman from Washington, Dr. McDermott, you are recognized. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. Mr. O’Carroll, 

first I have a question about death reporting. Are all States required to report to you deaths that occur within the State? 

Mr. O’CARROLL. Yes, they—by me, meaning SSA, they do report to SSA. However, the way they report is different in terms of 

some using the electronic death reporting method, which is extremely accurate and quick. The ones still using the paper ones— 

which I think is now probably about 10 States are still doing 

paper—those are usually not as accurate. There are a lot of issues 

with them. 

Mr. MCDERMOTT. Issues being that you send out checks to people who have passed away. You are continuing to send checks? 

Mr. O’CARROLL. Correct. Our biggest concern of that one is the 

timely notification of SSA of a death and the accuracy of it. You 

also don’t want to be reported as dead when you are alive. 

Mr. MCDERMOTT. You require States to report electronically to 

you, can you? 

Mr. O’CARROLL. No, it is not mandatory. So what has happened 

is that there is a lot of encouragement for it. HHS is the primary 

agency and they have been pushing the States to do it. But there 

are a few States—in many cases it is going to be on the electronic 

systems in the State and bringing that State up to a standard so 


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that they can transmit electronically. But we are making the recommendation based on our finding that the accuracy level is so 

much better when it is electronic than when it is manual. We really encourage it. 

Mr. MCDERMOTT. From health research, it is a lot better. And 

HHS is getting the data directly electronically. They can do a lot 

more research in terms of what is happening in the country medically. 

Mr. O’CARROLL. Absolutely. 

Mr. MCDERMOTT. And so I was wondering how many States 

you are saying. You are saying there are about 10 States that still 

are not? 

Mr. O’CARROLL. Yes. 

Mr. MCDERMOTT. I would ask if you would send us a list who 

they are that are dragging their feet on this, so that we have an 

idea where these are coming from. 

Mr. O’CARROLL. Yeah. An example of that would be New York 

State that is not doing it electronically yet. New York City, the biggest contributor in the State, is. So it is spotty and we can give you 

a list of those. 

Mr. MCDERMOTT. Okay. Thank you. 

The other thing, thing about waste, fraud and abuse—my understanding is that in 2015 your office received about 150,000 complaints and that you opened 8,400 investigations and only 2,200 resulted in indictment, a conviction or information in lieu of indictment and that the civil monetary penalties amounted to 343. Now 

if I—I take this because they are the figures we got from—— 

Mr. O’CARROLL. Semiannual. 

Mr. MCDERMOTT [continuing]. In your office. Tell me why you 

only offered—opened 8,400 cases out of 150,000? Is that simply resources, or is it that you looked at them and said, this case isn’t 

worth opening. There is only $50 here, or there is only $1,000. Do 

you have some cut off? Does it have to be $1 million worth before 

we open an investigation, or $50,000, or $10,000? How do you make 

that screening to open 8,400 cases? 

Mr. O’CARROLL. Boy, I am glad you asked that question. We 

are probably the largest hotline in government for fraud allegations 

being made. Yes, we get 150,000 plus allegations a year. Two 

things: a number of things kind of go into what we call the waterfall. How it comes down from the initial information and it eventually becomes a case. Hopefully an arrest is made. 

A couple of things go into it, one is the accuracy of the information that we are getting. Oftentimes we are getting calls on the 

hotline where a person will call up and say, my next door neighbor 

is in the backyard doing manual labor and I know they are on disability. We really can’t do anything with that, you know, unless we 

have specific information on who the person is, what their Social 

Security numbers is, and other type of information. So the first 

step is validating the information coming in. 

Next step on it is that we have to start figuring out whether we 

have representation in that location where it is. Some States we 

have one agent for the entire State. That is where we start getting 

into the resources. 


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Mr. MCDERMOTT. So your hotline records the name of the next 

door neighbor. 

Mr. O’CARROLL. Uh-huh. 

Mr. MCDERMOTT. But then they ask, do you know his Social 

Security number? They say, no. That one never would be opened. 

Mr. O’CARROLL. Agreed. If they don’t know that information 

or—also what is happening oftentimes is, believe it or not, we still 

say the hotline; we talk about telephone calls being made. But to 

be truthful, Congressman, the biggest issue now is often times electronic. So we are getting a lot of stuff over the web. And when that 

is coming in one way information, we don’t have the chance to go 

back to get secondary information from them. 

So if that initial response that we get doesn’t have enough information in it we can’t, we oftentimes can’t do anything. But if it is 

really significant—— 

Mr. MCDERMOTT. In our offices, we have a legislative correspondent. We send back emails to people. You never send an 

email back and say, could you give us more information or can you 

give us information in this category, so we can actually know who 

it is we are looking at next door? 

Mr. O’CARROLL. Well, where we run into difference from you is 

that when they contact your office they want to be re-contacted. 

When people contact us, most of the time they want anonymity. 

That is where our problems are. They don’t want us to know who 

they are, for fear that—yeah, so the neighbor sees the car out in 

front of the house and figures their neighbor informed on them. So 

those are all the issues. 

I can talk for a long time on this one. 

Mr. DOLD. The gentleman from Pennsylvania, Mr. Kelly, you 

are recognized. 

Mr. KELLY. Thank you, Chairman. Mr. O’Carroll, good to see 

you again and thank you so much for dedicating your life. I am 

sure there are/were things you could have done that may have been 

more pleasant, more profitable, but thanks for doing what you have 

done. 

I admit, there is a misconception out there in the general public 

that we have these cushy jobs. When I get back home, I tell people, 

yeah, we only work a half day; it is either the first 12 hours or the 

second 12 hours. So I know everybody in your agency does the 

same thing. 

You know, when we met the other day someone said, the percentage of fraud is 1 percent. Is that a realistic figure? 

Mr. O’CARROLL. No. 

Mr. KELLY. No, okay. So we agree it is not realistic. And I 

would just say from being in the private sector, in addition to putting in 6.2 percent of my pay, I also matched everybody that I 

worked with every day, to have some type of mutual success. So 

from an employer standpoint, it was signing checks, and it was 

12.4 percent. 

Just so we understand, Social Security is made up by people who 

work. 6.2 percent of the associate’s paycheck matched by 6.2 percent of the business owner’s. That is 12.4 percent out of every paycheck up to $118,500. So I think on Mr. Gates is probably, Mr. LarVerDate Sep 11 2014 12:15 Oct 24, 2016 Jkt 021377 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\21377.XXX 21377

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son, probably about 7:30 in the morning. So I don’t think it would 

be noon. 

But when it comes to fraud and we have talked about this, in the 

private sector fraud is totally unacceptable because it puts you out 

of business. Realistically we are nowhere near 1 percent fraud on 

this, are we? 

Mr. O’CARROLL. Well, that is as we talked about last week. 

What we would like is a baseline in order to be able to see if, you 

know, different efforts that are being done by us and SSA are being 

effective. It would be I guess useful to be able to establish a number on it. But I think it is also about going on record that no other 

benefit program yet has established its fraud rate. So it would be 

unlike business where businesses have an understanding of what 

a rate is. I look often times at what the fraud rate is in the insurance industry and wonder whether it would be the same in a benefit program. But I do—our concern is that we know it is more 

than 1 percent, but don’t have a specific number. 

Mr. KELLY. But without a baseline we don’t know. We know the 

huge difference between a private entity running a business, and 

the government running a business. When a private entity is not 

able to control fraud, it goes out of business. In a government entity, all we do is throw more money at it. Somehow hardworking 

American taxpayers are going to have to find a way to cough up 

more money, or we are going to have to find a way to extract more 

money from them. 

But when it comes to fraud, the programs themselves—look at 

just credit card fraud. You look around the country and this is almost getting back to an old thing. When they caught John 

Dillinger, they asked him, so why do you rob banks? He said, because that is where the money is. I would think the same thing 

with these programs. They are so easy to break into. It is so easy 

to go ahead and do this. While there are some penalties—only if 

you are caught and run through the process and are actually convicted—we are making it so easy for people to do it. It is really, 

you can’t stop it because it is so easy to do. That is my perception. 

I have been in a private, family owned business my whole life. 

We would not be here, 63 years later, if we were able to not worry 

about where money was being stolen from; just go collect more. So 

the model changes very dramatically. I have—Mr. Larson, we are 

on the same page, from its very inception and conception, Social 

Security was designed in a particular sense in a particular way. It 

has morphed into something far different. 

And I think when you look at the population of beneficiaries— 

I know we want to take care of people, especially the most vulnerable and those the most at risk—but I think we have developed 

into a program that just can’t say no. And then wonder why we are 

not able to do it. A tremendous burden is put on the private sector 

to continue to fund this program, which is at great risk right now. 

If we don’t get this fixed, the insolvency problem will take care of 

itself. We will be insolvent. We do have the ability to extract more 

money from taxpayers. We do have the ability to throw money at 

problems. I am not sure we have the political will to do what is 

right. 


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So again, I don’t want to take up all our time. In fact, we are 

done. I sincerely appreciate what you have done. You and I have 

had conversations, on about a year from now, where you will be. 

I wish I was going to be there with you. I am not going to be. Still 

I want to sit down and talk with you, because I think that the real 

fixes are here. The question is, do we have the stomach to actually 

do what is necessary to keep this program into effect? 

There are too many people that I represent that absolutely rely 

on Social Security being solvent for the retirement age. The golden 

years are not turning into golden years for them. They are turning 

into more worry. So I appreciate everything you have done. 

Mr. Chairman, thank you for holding this [hearing.] Mr. Larson, 

is the cup half full or half empty? 

Mr. LARSON. It better be half full. 

Mr. KELLY. You and I are going to work together on this Social 

Security thing. I appreciate it. Thank you. 

Thanks, Mr. Chairman. I yield back. 

Mr. DOLD. The gentleman yields back. The gentleman from 

South Carolina, Mr. Rice, is recognized. 

Mr. RICE. Mr. Chairman, the Inspector General was kind 

enough to come and meet with me in my office about a lot of these 

issues last week so I am going to yield. 

Mr. DOLD. The gentleman yields back. The gentlelady from Tennessee, Mrs. Black, you are recognized. 

Mrs. BLACK. I thank the gentleman for yielding. 

Thank you so much, Mr. Chairman, for allowing me to sit in, although I am not a member of this subcommittee I have been in the 

past. I just really appreciate your service as has already been said. 

Mr. O’Carroll, I know as has been said by my colleagues from 

Pennsylvania, there are probably other areas that you could have 

made a whole lot more money in, perhaps you would even have as 

much hair as on this picture in our notebook, but we really, really 

do appreciate you coming before us and helping us to make sure 

that our taxpayer dollars are used in the best way that we can. I 

know the constituents in my district really appreciate it when I can 

tell them that we are overseeing the money they give to the Federal Government. 

And so I go to this question in response: a recent GAO report on 

Social Security Administration stated that IT modernization is a 

significant priority for the agency. In fact, the President’s budget 

actually requested $300 million in mandatory funding to modernize 

the SSA’s IT system. 

Given that SSA has already spent well over $300 million on the 

disability case processing system, and is still not yet operational, 

how confident are you that the proposed $300 million will cover the 

entire modernization project as the budget claims? 

Mr. O’CARROLL. Well, Congresswoman, we have great concerns. 

That is probably one of the reasons why I am here and why we 

have been coming before the committee on this issue. We have 

been saying all along that, you know, the modernization of IT of 

SSA is extremely important. It is extremely expensive and extremely difficult. It is going to require a lot of oversight. 

And part of that oversight is taking a look at this one project 

that we have many concerns about. I have got to say, you know, 


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monthly meetings with, the oversight committees to, you know, update them on what is going on with it; this is a step in the right 

direction. The biggest thing, you know, for me and where I am sitting right now is that, as with any administration on it, we are at 

the end of this administration. You know, no one knows how to 

predict what is going to be happening in the future, but a lot of 

the different plans and processes and everything else at SSA could 

be, you know, set back, with administration changes. 

So it is going to be, I guess, incumbent on this committee to keep 

the IT modernization of SSA in the forefront. And what we will do 

as the IG is continue to make recommendations of what they need 

to do and have meetings during any of the transitions that are 

coming. We will explain what our concerns are and what goals 

should be for the agency. We do have significant concerns. 

Mrs. BLACK. And if you were to give a suggestion to this oversight committee, what one suggestion would you give that you 

would say to us; this is what we want you to be looking at and 

holding them accountable? 

Mr. O’CARROLL. Well, I have got to applaud the committee in 

terms of, you know, Chairman Johnson, Ranking Member Becerra. 

This committee has been very focused on IT. Of course, what we 

have seen, and I mentioned in my testimony, is the concern that 

the keys to the castle of all information for American citizens is at 

SSA. A breach of SSA would be catastrophic in terms of the reputation of this organization. 

So for that reason, the modernization of SSA, bringing in all the 

new forms of IT security is very important. My thought on it is 

that—which is happening is—I would say monthly meetings with 

SSA; to look at, one, the projects that they have ongoing, and two, 

the future. Explain what is needed on it so that this committee can 

go forward in terms of doing—predicting where SSA’s needs are 

going to be, because IT is the future. 

The other one for me that I have woven throughout my testimony and everything else, one of the other big issues is going to 

be data matching, which again, goes back to IT. Many of the things 

that, as Congressman Kelly was talking about. If we have data 

matches out there, we don’t necessarily need investigators or need 

to know numbers of what the fraud number is or anything else. If 

we can start using the information out there to make sure that the 

right people are getting the money, making sure that the people 

are alive when they are getting their checks, that type of information, a lot of that can be done without actual people on the ground. 

It can be done with data matching. And that is going to be a robust 

good IT system at SSA. 

Mrs. BLACK. Thank you, and I yield back. 

Mr. DOLD. The gentlelady yields back. 

Mr. O’Carroll, thank you so much for coming before us today. I 

think you can hear from just the questions that we need the Inspector General to make sure that we are safeguarding Social Security. Frankly, this is a program so many of constituents across the 

country rely upon, and we need it to be solvent. We need to make 

sure that this is around and stronger tomorrow than it is today. 

Your office plays a key role in that. 


joloto on DSKB35BYQ1 with HEARING
29 

So as we look at, obviously, IT and cybersecurity and the like, 

the concern is the hundreds of millions of dollars that we spent. We 

want to make sure that, yes, we are getting that protection and we 

want to make sure that those dollars are put to good use. 

So I do share my colleague’s concern with regard to making sure 

that we are doing the proper investments, to make sure Social Security is around in the long haul. But you also have, obviously, an 

obligation on your end to make sure that those dollars are being 

spent wisely and are looked after. 

Medicare; we had Medicare actually before the committee, the 

oversight committee. They actually put their fraud rate at 12 percent. We think it might be higher than that. That works out to be 

about $60 billion annually; a little over $1 billion a week. So obviously, when people see those types of things, they get concerned because we can be using those dollars elsewhere. 

So again, just going back to thank you for the service that you 

have done, the work that you are doing. We know that you want 

to prevent waste, fraud, and abuse as well. And I want to again 

thank you for a long and illustrious career. We certainly thank you 

for your service to our country. With that, this committee stands 

adjourned. 

[Whereupon, at 11:05 a.m., the subcommittee was adjourned.] 

Æ 


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