UNITED STATES 

GOVERNMENT 

MEMORANDUM 

FORM G-115f (1-92) 

RAILROAD RETIREMENT BOARD 

TO Guadalupe Contreras 

Chief ofRUIA, Internet and Support (RIA) 

Through: Kimberly Price-Butler 

Director Policy and Systems 

FROM Karl T. Blank j ~ £ /?t/--

General Coull$ 

July 27, 2016 

L-2016-33 

SUBJECT : Benefit Determinations based upon "The Work Number" 

Employment Database 

This is in response to your memorandum dated May 12, 2016 to the Office 

of General Counsel inquiring whether the Railroad Retirement Board (RRB) 

is prohibited by the Privacy Act of 1974 (Privacy Act) (5 U.S.C. § 552a) 

from using information obtained from The Work Number (TWN) to deny or 

recover benefits from individuals under the Railroad Retirement Act (RRA) 

( 45 U.S.C. § 231 et seq.) or the Railroad Unemployment Insurance Act 

(RUIA) ( 45 U.S.C. § 351 et seq.) without independent verification of the 

data. As explained below, in my opinion, the Data Integrity Board (DIB) of 

the RRB must determine, in accordance with 0MB guidance, that there is a 

high degree of confidence in accuracy of TWN information. 

As background, TWN is a user-paid verification of employment database 

owned by Equifax, Inc. (T ALX Corporation). TWN is a privatelymaintained data source designed to help users identify unreported income. 

TWN allows organizations such as social service organizations to locate an 

individual's current place of employment or uncover unreported income, 
2 

based on the most recent payroll data from over 2,500 employers 

nationwide. 1 In its report Railroad Retirement Board - Actions Needed to 

Reduce Continued Risk of Fraud and Improper Payments (GAO-l 5-535T, 

issued on May 1, 2015), GAO stated that information sources such as TWN 

"could potentially provide RRB with more timely earnings information on 

claimant's work histories" and that RRB should "explore options to obtain 

more timely earnings data to ensure that claimants are working within 

allowable program limits prior to being awarded benefits." (GAO Report, 

p.7). Additionally, it should be noted that in Legal Opinion, L-2015-14, I 

previously reviewed the new Privacy Act routine uses for System of Record 

Notices (SORN) RRB-21, Railroad Unemployment and Sickness Insurance 

Benefit System, and RRB-22, Railroad Retirement, Survivor, and Pensioner 

Benefit System, and held that creation of new routine uses would allow for 

disclosure of the subject wage information concerning RRA 

applicants/annuitants to TWN. 

In your memorandum, you indicated that the RRB plans to use TWN to 

obtain earnings data to determine benefit eligibility and prevent erroneous 

payments, potentially resulting in an adverse determination. You stated that 

the Privacy Act requires independent verification (5 U.S.C. § 552a(p)(c)(2)) 

of any income before the RRB can take any adverse action on the 

individual's benefits (5 U.S.C. § 552a(p )(1)). You also stated that in most 

computer matching activities this is not an issue as the match is done with a 

partner Federal/State agency and in cases of matches, the RRB is able to 

independently verify the earnings by contacting the employers for the 

individual that had the positive match. However, you indicated that a unique 

situation occurs when, for instance, a positive match through TWN, or 

another commercial provider, with no means to independently verify the 

earnings information where the employer has contracted the wage 

verification services through the same provider. 

Section 552a (p) (5 U.S.C. § 552a(p)) of the Privacy Act provides, m 

pertinent part, that: 

(p) Verification and Opportunity to Contest Findings. - ( 1) In order to 

protect any individual whose records are used in a matching program, no 

recipient agency, non-Federal agency, or source agency may suspend, 

terminate, reduce, or make a final denial of any financial assistance or 

1 See Footnote number 11 on Page 6 of the GAO report cited in the text of this Memorandum. 
3 

payment under a Federal benefit program to such individual, or take other 

adverse action against such individual, as a result of information produced 

by such matching program, until-

( A )(i) The agency has independently verified the information; or 

(ii) The Data Integrity Board of the agency, or in the case of a nonFederal agency the Data Integrity Board of the source agency, 

determines in accordance with guidance issued by the Director of 

Office of Management and Budget that-

(1) the information is limited to identification and amount of benefit paid 

by the source agency under a Federal benefit program; and 

(II) There is a high degree of confidence that the information provided 

to the recipient agency is accurate; 

(B) The individual receives a notice from the agency containing a 

statement of its findings and informing the individual of the 

opportunity to contest such findings; and 

(C)(i) The expiration of any time period established for the program 

by statute or regulation for the individual to respond to that notice; or 

(ii) in the case of a program for which no such period is established, 

the end of the 30-day period beginning on the date on which notice 

under subparagraph (B) is mailed or otherwise provided to the 

individual. 

(2) Independent verification referred to in paragraph (I) requires 

investigation and confirmation of specific information relating to an 

individual that is used as a basis for an adverse action against the individual, 

including where applicable investigation and confirmation of-

(A) The amount of any asset or income involved; 

(B) Whether such individual actually has or had access to such asset 

or income for such individual's own use; and 
4 

(C) The period or periods when the individual actually had such asset 

or mcome. 

According to 0MB guidance (56 FR 19599 (April 23, 1991)) to Federal, 

State and local agencies on implementing certain provisions of the Privacy 

Act of 1974, as amended, concerning independent verification requirements, 

the 1990 amendments authorize an agency's Data Integrity Board (DIB) to 

waive the independent verification procedures when it finds a high degree of 

confidence in the accuracy of the data. 2 

The amendments create an alternative to the requirement that agencies 

independently verify the accuracy of information developed through a 

matching program before using it to make an adverse determination. 

According to the House report, "the alternative procedure permits a Data 

Integrity Board to waive the independent verification procedure * * * for 

qualifying disclosures." (House Conference Report 101-964, p. 978, October 

27, 1990). 

Note that this alternative is not a general exception to the requirement; it is 

available only for a specific type of matching data and only when the agency 

has taken certain steps. 

Program officials may petition the DIB of the recipient Federal agency in the 

case of a Federal matching program, or the Federal source agency in the case 

of a Federal/State matching program to waive the independent verification 

requirement only after they have taken the following steps: 

- Identification of the · Type of Matching Data Eligible for the 

Waiver. Eligible data are only information that identifies the 

individual and the amount of benefits paid to the individual under a 

Federal benefit program. A clear example of the kind of data 

exchange that is eligible for waiver consideration is the furnishing 

to States by the Social Security Administration of Cost of Living 

Adjustment (COLA) information that consists of the name of the 

benefit recipient, the benefit amount including the amount of the 

COLA change, and other information. In this example, the name 

and benefit amount would be eligible for the waiver procedure; the 

2 The Railroad Retirement Board's DIB consists of the Chief Financial Officer, the Inspector General, and 

the Chief Information Officer, who serves with the Chair. See Administrative Circular REF (RRB)-2, 

August 28, 2015, p.2. 
5 

"other information" would not. Another example would be the 

furnishing by the Department of Defense of information about the 

Reserve status of military personnel to the Department of Veterans 

Affairs for purposes of determining credit for educational benefits 

programs provided that the information consisted of the name, rank 

and reserve status, i.e., active or inactive during the reporting time 

period. In both of these examples, the data that is conveyed is 

unambiguous; e.g., the COLA increase is five percent for all 

recipients; here is a list ·of reservists who performed duty such that 

they are eligible for the benefit. Where the information is 

furnished is less precise ( e.g., it consists of underlying eligibility 

information-amount of earned income, amount of unearned 

income, number of dependents) and is different for each 

participant, such data is not a candidate for the waiver procedure. 

- Conducting Thorough Determinations of Data Accuracy. Once an 

agency has determined that the data being exchanged qualifies for 

the waiver procedure, the agency must present convincing 

evidence to the DIB of the recipient agency ( or source agency in 

the case of a Federal/non-Federal Match) to permit the Board to 

assert a high degree of confidence in the accuracy of the data. 

Note that the Amendments do not require that the agencies conduct 

thorough audits of their systems, only that they have information 

relating to the quality of data. Among the elements an agency may 

wish to present to a DIB are the following, (not all of which may 

be necessary or appropriate): 

- A description of the databases involved (both source and 

recipient) including information on how data are acquired and 

maintained so as to permit accuracy assessments. 

- The system managers' overall assessment of the reliability of 

the systems and the accuracy of the data they contain (both 

participants). 

- The results of any audits or risk assessments conducted (both 

participants). 
6 

- Any material or significant weaknesses identified in response 

to requirements of the Federal Managers Financial Integrity Act 

or related legislation and any applicable 0MB Circulars (both 

participants). 

- Any assessments of the effectiveness of the agencies 

Personnel Security Programs (both participants). 

- The security controls in place for the systems and the security 

risks associated with those systems (both participants). 

- Any historical data relating to program error rates (recipient 

agency). 

- Any information relating to the currency of the data ( source 

agency). For example, a source agency updates data each 

quarter. A recipient agency should probably not use data that it 

received in January to make a determination in March since 

newer data will be available then. In some cases, the source 

agency may wish to provide confidence intervals to help the 

recipient agency determine when the data is so old as to be 

suspect; e.g., data is 99 percent accurate within one week of 

receipt, 95 percent accurate within two weeks of receipt, 85 

percent accurate within three weeks of receipt. Alternatively, a 

source agency may wish to warn a recipient agency not to use 

the data after the date on which the database is updated. Note 

that this list is not meant to be exhaustive, nor will each item be 

suitable for every matching program. Agencies should use 

whatever is appropriate to their particular circumstances, so 

long as the resultant finding is that the DIB has a high degree of 

confidence in the accuracy of the data. Obviously, since much 

of the data used by the recipient agency in the determination 

must come from the source, the source should be prepared to 

cooperate in the development of the waiver determination. The 

evaluations should be renewed each time the matching 

agreement is renewed. Moreover, any changes to the database 

that would affect data quality should be reported to the DIB 

which must then determine whether to continue the 

certification. 
7 

Once the DIB has found a matching program eligible for 

waiver, it should notify all program officials expeditiously. It 

should also notify the source agency. The DIB should be 

prepared to include information about waivers granted as part 

of its Matching Report to 0MB and its agency head. 

Based on the 0MB guidance set forth above, it is my opinion that the RRB 

is prohibited by the Privacy Act from using information obtained from TWN 

to deny or recover benefits from individuals under the RRA or the RUIA 

without independent verification of the data. However, the RRB 's DIB may 

consider whether the matching program with TWN is eligible for waiver 

thereby allowing the agency to waive the independent verification 

procedures if the DIB determines that there is a high degree of confidence in 

the accuracy of the data provided by TWN. Subject to the 0MB guidance 

set forth above, this will create an alternative to the requirement that the 

RRB independently verify the accuracy of information developed through 

its matching program with TWN before using it to make an adverse 

determination.