Testimony 

Before the Subcommittee on Human 

Resources, Committee on Ways and 

Means, House of Representatives

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 10:00 a.m. EDT 

Thursday, May 20, 2004 SUPPLEMENTAL 

SECURITY INCOME 

Sustained Management 

Attention Needed to 

Address Residency 

Violations 

Statement of Robert E. Robertson, Director 

Education, Workforce, and Income Security Issues 

GAO-04-789T 
Overpayments resulting from residency violations totaled about $118 million 

between 1997 and 2001. However, this figure, which represents only 

violations detected by SSA, likely understates the true level of the problem. 

Additionally, the extent of violations appears to vary by geographic region, 

with overpayments being more prevalent in several large metropolitan areas. 

GAO found that 54 percent of all overpayments detected by SSA during this 

period occurred in just 15 counties. In addition, we found that recipients 

born outside the United States accounted for at least 87 percent of all 

residency overpayments. 

SSA’s ability to detect and deter residency violations is impeded by three 

kinds of weaknesses. First, the agency relies heavily on self-reported 

information from recipients to determine domestic residency, often without 

independently verifying such information. Second, SSA makes insufficient 

use of existing tools to detect violations, such as its “risk analysis” system, 

redeterminations, and home visits. Finally, the agency has not adequately 

pursued independent sources of information from other federal agencies or 

private organizations to detect nonresidency of SSI recipients. GAO 

recognizes that the SSI program is complex to administer, and residency 

requirements are particularly difficult to enforce because they can 

necessitate time-consuming, labor-intensive verification checks, such as 

home visits. However, SSA has not employed a systematic, comprehensive 

approach to this problem that would allow the agency to use its available 

systems and procedures more efficiently and reduce the program’s exposure 

to additional violations. 

Top 15 Counties for SSI Residency Overpayments (1997-2001) 

New York

Queens

 New York

 Kings

 Bronx

 New

 Jersey

 Passaic

Illinois

Cook

California

San Francisco

Alameda

San Mateo

Santa Clara

Los Angeles

Riverside

Orange

San Diego

Florida

Dade

The Supplemental Security Income 

(SSI) program paid about $36 

billion in benefits to about 6.9 

million recipients in 2003. In 

recent years, the Social Security 

Administration (SSA) has identified 

a general increase in the amount of 

annual overpayments made to 

recipients who are not present in 

the U.S. as required by SSI program 

guidelines—a problem we refer as 

“residency violations”. This 

problem has caused concern 

among both program 

administrators and policy makers. 

As such, GAO was asked to 

determine what is known about the 

extent to which SSI benefits are 

improperly paid to individuals who 

are not present in the United States 

and to identify any weaknesses in 

SSA’s processes and policies that 

impede the agency’s ability to 

detect and deter residency 

violations. 

GAO has made recommendations 

to the Commissioner of Social 

Security that will allow the agency 

to make optimal use of existing 

tools and new data sources to 

better detect potential residency 

violators. 

www.gao.gov/cgi-bin/getrpt?GAO-04-789T.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact Robert E. 

Robertson (202) 512-7215 or 

RobertsonR@gao.gov. 

Highlights of GAO-04-789T, a testimony 

before the Chairman, Subcommittee on 

Human Resources, Committee on Way 

and Means, House of Representatives 

May 20, 2004

SUPPLEMENTAL SECURITY INCOME

SUSTAINED MANAGEMENT ATTENTION 

NEEDED TO ADDRESS RESIDENCY 

VIOLATIONS 
Page 1 GAO-04-789T 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here to discuss the Supplemental Security Income (SSI) 

program. The Social Security Administration (SSA) administers the SSI 

program, which is the nation’s largest cash assistance program for the 

poor. SSI provides financial assistance to people who are age 65 or older, 

blind or disabled, and who have limited income and resources. In 2003, 

about 6.9 million recipients were paid about $36 billion in SSI benefits.1

Benefit eligibility and payment amounts for SSI recipients are determined 

by complex and often difficult to verify factors such as individual living 

arrangements, including whether a person resides in the United States 

(U.S.). Thus, the SSI program tends to be difficult to administer and 

susceptible to overpayments.2

 In recent years, SSA has identified a general 

increase in the amount of annual overpayments made to recipients who 

are not present in the U.S. as required by SSI program guidelines—a 

problem we refer to as “residency violations.” 

My testimony today focuses on a report we issued in July 2003 in response 

to a request from this subcommittee.3

 You asked us to (1) determine what 

is known about the extent to which SSI benefits are improperly paid to 

individuals who are not present in the U.S. and (2) identify any 

weaknesses in SSA’s processes and policies that impede the agency’s 

ability to detect and deter residency violations. 

In summary, SSA detected overpayments of $118 million for residency 

violations between 1997 and 2001,4

 but interviews with the Office of 

Inspector General (OIG) and agency officials suggest that the agency only 

detected a portion of the violations that occur each year, at least in some 

parts of the country. The extent of violations appears to vary by 

geographic region, with overpayments being more prevalent in several 

large metropolitan areas in five states—California, Florida, Illinois, New 

Jersey, and New York. We also found that recipients born outside the U.S. 

 1

This figure includes both federal funds and state supplemental funds. 

2

In 2001, outstanding SSI debt and newly detected overpayments for the year totaled $4.7 

billion. 

3

See U.S. General Accounting Office, Supplemental Security Income: SSA Could Enhance 

Its Ability to Detect Residency Violations, GAO-03-724 (Washington, D.C.: July 29, 2003). 

4

More recent data on overpayments due to residency violations were not available at the 

time of this testimony. 
Page 2 GAO-04-789T 

accounted for at least 87 percent of all residency overpayments. Three 

kinds of weaknesses have historically impeded SSA’s ability to detect and 

deter residency violations. First, to verify domestic residency, the agency 

has often relied on self-reported information from recipients and visual 

inspection of documents that can be easily manipulated, such as rent 

receipts and letters from neighbors or clergy. Second, the agency has 

historically made limited use of tools at its disposal to detect possible 

violators, such as its risk analysis system to screen for high-risk cases 

more likely to result in overpayments. Third, SSA has not adequately 

pursued the use of independent, third-party data, such as emerging 

immigration databases or recipient bank account information, to help 

detect residency violations. 

In response to our report recommendations, SSA indicated that it is 

considering implementing several initiatives that may provide a more 

complete picture of residency violations in the SSI program and improve 

its ability to detect and prevent such violations in a more efficient, timely 

manner. These include investigating the potential for obtaining access to 

foreign automated teller machines to track banking transactions over time, 

requesting assistance from state Medicaid fraud investigators to help SSA 

perform more home visits to verify recipients’ residence, and investigating 

the potential of examining arrival/departure records maintained by the 

Department of Homeland Security to identify recipients who leave the 

country for more than 30 consecutive days. While it is too early to assess 

how effective these initiatives may be, we support SSA’s commitment to 

studying this problem further and its willingness to explore new data 

sources and improvements to existing processes as a way of detecting 

potential violations in a more timely manner. Thus, we view these 

initiatives as positive first steps. However, sustained management 

attention to identifying and preventing residency violations will be needed 

to further strengthen the integrity of the SSI program. 

Individuals may apply for SSI benefits at any of about 1,300 SSA field 

offices. During the initial interview, SSA staff solicit information on 

applicants’ financial situation and the disability being claimed. Applicants 

are required to report any information that may affect their eligibility for 

benefits, such as income, resources, and their living arrangements 

(including current residence). Similarly, once individuals receive SSI 

benefits, they are required to report changes in their address or residence 

to SSA in a timely manner. The Social Security Act (Section 1614 

(a)(1)(B)(i)) requires that an individual be a resident of the U.S. to be 

eligible for SSI payments. SSA guidelines define a resident of the U.S. as a 

Background 
Page 3 GAO-04-789T 

person who has established a dwelling in the U.S. with the intent to live in 

the country. Section 1611(f) of the act also provides that no individual is 

eligible for SSI payments for any month during all of which the individual 

is outside the U.S. Recipients who fail to establish residency in accordance 

with SSI program guidelines or do not report absences of 30 days or more 

may be overpaid, and subject to monetary penalties and administrative 

sanctions such as suspension of benefits. Similarly, SSI recipients who 

become ineligible for SSI benefits because they violate SSI residency 

guidelines may also be ineligible to receive Medicaid benefits. 

To a significant extent, SSA depends on program applicants and current 

recipients to accurately report important eligibility information. To verify 

this information, SSA may use computer matches to compare SSI records 

against recipient information in records of third parties such as other 

federal agencies. SSA also periodically conducts “redetermination” 

reviews to verify important eligibility factors, such as income and 

resources, to determine whether recipients remain eligible for benefits 

after the initial assessment. 

SSA detected overpayments of $118 million for residency violations 

between 1997 and 2001, but interviews with OIG and SSA officials suggest 

that the agency detects only a portion of the violations that occur each 

year, at least in some parts of the country. Special initiatives of limited 

duration conducted by SSA and its OIG have uncovered additional 

residency overpayments. According to our own analysis of SSA’s data, 

residency overpayments appear to vary by geographic region, with the 

majority of overpayments having been detected in several large 

metropolitan areas. Finally, we determined that most of the overpayments 

detected during this period were attributable to recipients who were born 

outside the U.S. 

SSA detected an average of about 46,000 recipient residency violations 

annually between 1997 and 2001, resulting in $118 million in 

overpayments. While SSA’s data show that less than 1 percent of all SSI 

recipients violate residency requirements annually, SSA field staff and OIG 

officials suggest that the problem may be more prevalent. For example, 

over the past few years, SSA and its OIG have initiated a number of studies 

estimating that residency violations in certain regions of the country may 

represent as much as 26 percent of SSI cases in those areas. These local 

studies were generally limited in duration and were performed within 

specific geographic areas: 

SSA Detected 

Overpayments of 

$118 Million for 

Residency Violations 

over 5 Years, but More 

May Go Undetected 

Residency Violations May 

be More Prevalent than 

SSA Has Detected 
Page 4 GAO-04-789T 

• A 1997 SSA and OIG joint study of SSI residency used home visits in 

southern California to identify potential residency violations. The study 

concluded that about 25 percent of SSI recipients in one field office were 

living outside of the country. The study also determined that 47 percent of 

SSI recipients from this field office could not be located at their reported 

residence, an indication that they may be violating residency requirements. 

• A 1998 OIG eligibility study in El Paso, Texas, found that about 26 percent 

of recipients investigated were violating residency requirements. This 

project identified about $3 million in residency overpayments. 

• In 1998 and 1999, joint SSA/OIG studies examined 32,641 recipients in New 

York and California who had not used their Medicaid benefits for at least 1 

year.5

 Using redetermination reviews, these studies found that 1,281 

recipients (about 4 percent) were living outside the U.S.6

Our analysis of SSA’s data showed that overpayments due to residency 

violations are more prevalent in a number of large metropolitan areas. For 

example, overpayments from violations detected in Los Angeles County, 

California, represented 10.5 percent of the nation’s SSI residency 

overpayments between 1997 and 2001. Overall, we found that just 15 

counties in 5 states—California, Florida, Illinois, New Jersey, and New 

York—accounted for 54 percent of all residency overpayments detected by 

SSA during this period. (See fig. 1.) In addition to Los Angeles County, 

there were other counties with a significant percentage of SSI residency 

overpayments: Queens County, N.Y. (5.2 percent); New York County, N.Y. 

(5.0 percent); Kings County, N.Y. (4.8 percent); San Diego County, Calif. 

(4.1 percent); and Bronx County, N.Y. (3.5 percent). Moreover, of 

approximately 3,000 U.S. counties, 50 accounted for 77 percent of all 

residency overpayments detected by SSA during this time. (See fig. 1.) 

 5

The rationale for targeting these cases was that financially needy individuals who were 

aged or disabled are likely to use Medicaid services on a regular basis. Thus, SSI recipients 

who have not used Medicaid for long periods of time may have left the U.S. or died. 

6

These studies considered the effect of only one potential indicator of residency 

violations—Medicaid nonutilization. 

Many Violations Are 

Geographically 

Concentrated 
Page 5 GAO-04-789T 

Figure 1: Top 15 Counties for SSI Residency Overpayments, 1997-2001 

New York

Queens

New York 

Kings

Bronx

New Jersey

Passaic

Illinois

Cook

Florida

Dade

 California

 San Francisco

Overpayments

(millions of dollars)

 $ 12.4

 $ 6.2

 $ 5.9

 $ 5.7

 $ 4.9

 $ 4.2

 $ 3.9

 $ 3.9

 $ 3.3

 $ 2.9

 $ 2.7

 $ 2.5

 $ 2.2

 $ 1.6

 $ 1.5 

Los Angeles, Calif.

Queens, N.Y.

New York, N.Y.

Kings, N.Y.

San Diego, Calif.

Bronx, N.Y.

Orange, Calif.

Santa Clara, Calif.

Dade, Fla.

Cook, Ill.

San Francisco, Calif.

Alameda, Calif.

Passaic, N.J.

San Mateo, Calif.

Riverside, Calif.

Source: GAO.

County

 Alameda

 San Mateo

 Santa Clara

 Los Angeles

 Riverside

 Orange

 San Diego
Page 6 GAO-04-789T 

SSA’s data also showed that individuals born outside the U.S. accounted 

for at least 87 percent of all SSI residency overpayments between 1997 and 

2001.7

 Residency overpayments were most common among recipients who 

were born in Latin America, the Caribbean, and South/Southeast Asia, but 

included other areas as well, such as the Middle East. Recipients from the 

Philippines accounted for the greatest amount of residency violations or 

$24 million of all SSI residency overpayments during this period. SSA data 

also showed that recipients from just 14 countries and 1 U.S. territory 

accounted for about 73 percent of all residency overpayments during this 

period. These include the Dominican Republic, (12.3 percent), Mexico (7.6 

percent), Puerto Rico (7.5 percent), India (7.1 percent), and Iran (3.4 

percent). (See fig. 2.) 

 7

The percentage of total residency overpayments attributed to recipients born outside of 

the U.S. may be higher than 87 percent because SSA could not identify a specific country of 

birth for recipients that represent about $10 million in SSI overpayments. 

Most Overpayments Were 

Made to Recipients Born 

Outside the U.S. 
Page 7 GAO-04-789T 

Figure 2: Top 15 Countries of Origin for SSI Residency Overpayments, 1997-2001 

a Puerto Rico is a United States territory. 

Source: GAO.

Mexico

Haiti

Dominican Republic 

Puerto Ricoa

El Salvador 

Columbia

Peru 

 

Overpayments 

(millions of dollars)

$ 14.5

$ 9.0

$ 5.9

$ 2.5

$ 1.6

$ 1.3

$ 1.2 

 

 Country of origin

Dominican Republic

 Mexico

 Puerto Rico

 Haiti

 Columbia 

 El Salvador

 Peru 
Page 8 GAO-04-789T 

Philippines

India

Iran

Vietnam

China

Korea

Pakistan

Taiwan

 Overpayments

(millions of dollars)

$ 24.0

$ 8.4 

$ 4.1

$ 3.5

$ 3.4

$ 2.0

$ 1.3

$ 1.3 

Philippines

India

Iran

Vietnam

China

Korea

Pakistan

Taiwan

Country of origin
Page 9 GAO-04-789T 

SSA’s ability to detect and deter residency violations has been impeded by 

three kinds of weaknesses. First, the agency has relied heavily on selfreported information from recipients to determine domestic residency, 

often without independently verifying such information. Second, SSA has 

made insufficient use of its existing tools for identifying potential 

violations, such as its risk analysis system to screen for high-risk cases. 

SSA has also not made optimal use of redetermination reviews, home 

visits, monetary penalties, and administrative sanctions to deter future 

violations. Finally, the agency historically has not made adequate use of 

independent data sources from other federal agencies or private 

organizations to detect nonresidency of SSI recipients. 

SSA has relied on self-reported information, such as documents and 

statements from recipients, to establish proof of U.S. residency. Our prior 

work has shown that about 77 percent8

 of all payment errors in the SSI 

program were attributable to recipients who do not comply with reporting 

requirements.9

 In our recent review, about half the SSA field staff we 

interviewed reported that they relied on recipients to self-report important 

information with respect to travel outside the U.S. SSI program guidelines 

have generally directed SSA staff to accept recipients’ assertions 

concerning residency unless they have reason to question the accuracy of 

their statements. If SSA field staff have reason to believe that a recipient 

has been outside the country for more than 30 days, they may request 

additional documentation such as a plane ticket, passport (or similar 

evidence which establishes date of entry into the U.S.), or a signed 

statement from one or more U.S. residents such as neighbors, clergy, or 

others who may have knowledge of the individual’s whereabouts. 

However, program guidelines do not require field staff to perform any 

additional verification steps to establish recipients’ residency. 10

 8

This figure represents data from fiscal years 1991 through 1995. 

9

See U.S. General Accounting Office, Supplemental Security Income: Action Needed on 

Long-Standing Problems Affecting Program Integrity, GAO/HEHS-98-158 (Washington, 

D.C.: Sept. 14, 1998). 

10SSI program guidance allows field staff to use home visits in selected circumstances, such 

as in response to a report from a third party that a recipient is outside the U.S. In addition, 

home visits may be employed if a recipient fails to provide information requested by SSA 

staff, or if a recipient does not respond to letters and/or telephone calls from staff asking 

them to appear at the local office. However, program guidelines give field office managers 

discretion in determining when to use home visits and allow them to take into 

consideration factors such as the safety of staff who perform such visits. 

Reliance on SelfReported Information 

and Other 

Vulnerabilities Have 

Impeded SSA’s Ability 

to Detect and Deter 

Violations 

SSA Has Relied Heavily on 

Self-Reported Information 

That Can be Manipulated 
Page 10 GAO-04-789T 

We also learned that some of the documents accepted by SSA as proof of 

residence are subject to manipulation or forgery. For example, staff in one 

field office noted that documents such as rent receipts can be purchased 

from a local drugstore and easily forged. Other field staff said that 

statements from neighbors could be falsified or manipulated to support 

assertions that an individual has not traveled outside the country. Field 

staff also reported that recipients may use multiple passports in order to 

conceal extended stays outside the country. For example, staff in two SSA 

regions we visited said that SSI recipients sometimes use a foreign 

passport to exit and reenter the country while maintaining a separate, 

“clean” U.S. passport for evidence of continuing residency. 

Given the agency’s reliance on self-reported information, SSA field staff 

often used their personal experience, judgment, and ad hoc interviewing 

procedures to detect potential residency violations. In particular, SSA field 

staff have looked for inconsistencies in recipient statements or a 

recipient’s inability to answer simple questions about where they live. For 

example, recipients may be asked about the names of people living in their 

household, or basic facts about their neighborhood such as the location of 

a well-known landmark. Staff may also ask whether a recipient owns 

property outside the U.S. Questionable or inconsistent answers to such 

questions may result in requests to provide additional documentation. 

However, effectively identifying residency violators has often depended on 

the experience and persistence of individual staff. 

Our review also found that the procedures for documenting recipients’ 

residency varied widely among the offices we visited, in particular, the 

number and types of evidentiary documents requested by staff. While staff 

in several offices reported that they often request only the most basic 

documentation required by SSI program guidelines, staff in other offices 

told us that they routinely ask for additional documentation for recipients, 

such as a second passport or other travel documents to determine whether 

the individual has been outside the country for more than 30 days. While 

these steps are not required, some field staff reported that they have been 

effective in identifying potential violators and deterring future violations. 

SSA staff reported a number of reasons for different documentation 

requirements such as variance in individual office policies, personal 

preferences based on experience, time pressures to complete cases, and 

the inability to effectively verify supplied documentation. 
Page 11 GAO-04-789T 

SSA has not made optimal use of several tools that could be used to detect 

residency violations. These include its “risk analysis system” for screening 

cases more likely to result in overpayments, its “redetermination reviews” 

of recipients’ eligibility, and home visits to verify recipients’ whereabouts. 

SSA has used statistical risk analysis techniques for many years in the SSI 

program to identify recipients who are more likely to be overpaid due to 

excess income or resources. Since SSA lacks adequate staff resources to 

conduct an annual review of every recipient, it uses this technique to 

identify recipients who are most likely to have a change in their eligibility 

status or benefit amount. 11

Despite the proven effectiveness of its risk analysis system to help the 

agency identify cases with the highest potential for overpayments, SSA has 

not used this tool to specifically identify potential residency violations. To 

determine whether it would be possible for SSA to more effectively 

identify potential residency violators by using its existing systems, we 

developed and tested a statistical model of factors possibly associated 

with residency violations.12 Using this model as a screen, we examined all 

recipients who were currently in violation of residency requirements as of 

April 2003,13 and found that recipients born outside the U.S.—noncitizens 

as well as naturalized citizens—were more than 40 times as likely to be 

violating residency requirements than were native-born recipients. 

Similarly, recipients with prior residency violations were about 10 times as 

likely to be current violators compared with recipients who have no prior 

violations. We also found that recipients who used post office boxes were 

somewhat more likely to be receiving benefits outside the country than 

those without post office boxes. Given the potential usefulness of this 

limited modeling demonstration, it may be possible for SSA to expand and 

 11SSA’s risk analysis system incorporates about 48 different characteristics—or variables—

to help the agency determine which recipients will be selected for annual redetermination 

reviews. Recipients identified as being at higher risk for overpayments are designated as 

High Error Profile cases and may be subject to more frequent reviews that entail personal 

contact with SSA field office staff. Those recipients identified as being less likely to incur 

an overpayment are designated as Medium or Low Error Profile and may only receive a 

redetermination conducted by mail rather than in person. Some Low Error Profile cases 

are only examined once every 6 years. 

12The variables used in our model are not an exhaustive list of potential variables that SSA 

could use in its risk analysis system. They represent just a few of the characteristics that 

were frequently cited by prior reviews as well as SSA and OIG staff as potentially good 

predictors of residency violations. 

13SSI recipients with residency violations were compared against recipients with no 

violations. 

SSA Has Not Fully 

Exploited Its Tools for 

Detecting and Deterring 

Program Violations 
Page 12 GAO-04-789T 

refine its risk analysis system to better target potential violators. SSA is 

studying the potential for refining its screening technique to improve its 

effectiveness for identifying recipients at high risk for residency violations. 

Beyond the targeting problems we identified with SSA’s risk analysis 

system, we found that the agency was not using redeterminations as 

efficiently as it could despite the fact that SSA’s data and our prior reviews 

have documented their effectiveness for verifying recipients’ eligibility.14 In 

particular, home visits were used infrequently during redetermination 

reviews according to staff in a number of offices we visited. 

Those field offices that have used home visits as part of their 

redetermination procedures have found them effective. About half of the 

field offices we visited (9 of 17) employed home visits at least some of the 

time to verify whether recipients actually live at the address they report to 

SSA. For example, the SSA regional office in Dallas, Texas contracted with 

a private investigation firm to conduct residency home visits. Using these 

investigators, field offices within the region performed 4,200 home visits 

that uncovered at least $2.1 million in additional overpayments between 

October 1997 and January 2003. According to SSA data, this project 

achieved a benefit-to-cost ratio of almost 8 to 1. Similarly, the California 

Department of Health Services has worked cooperatively with SSA field 

offices in the San Diego area by conducting residency home visits. 

Because Medicaid eligibility is often directly tied to SSI eligibility, 

identifying residency violations may save funds from both programs. 

Between October 2000 and September 2002, state Medicaid investigators 

identified about 1,600 SSI recipients with residency violations. In one 

instance, state investigators discovered an SSI recipient who was using a 

residence in southern California as a mailing address, while actually 

residing in Tijuana, Mexico, for at least 8 years. In another case, state 

investigators found an SSI recipient using a post office box in southern 

California as a mailing address, although the recipient was in fact living in 

San Felipe, Mexico, since 1982. Because the state provides these 

investigative services to SSA free of charge, it is highly cost-effective. To 

 14SSA data show that, in 1998, refining the case selection methodology increased estimated 

overpayment benefits—amounts detected and future amounts prevented—by $99 million 

over the prior year. SSA officials have estimated that conducting substantially more 

redetermination reviews would yield hundreds of millions of dollars in additional 

overpayment benefits annually. See U.S. General Accounting Office, Supplemental 

Security Income: Progress Made in Detecting and Recovering Overpayments, but 

Management Attention Should Continue, GAO-02-849, (Washington, D.C.: Sept. 6, 2002). 
Page 13 GAO-04-789T 

address this issue, SSA is currently exploring the potential for having 

states assist in performing home visits using their Medicaid fraud 

investigators. According to SSA, 27 states and the District of Columbia 

have expressed an interest in assisting in this effort. 

In terms of deterring future violations, we found that existing monetary 

penalties and administrative sanctions are rarely, if ever, used in the 

offices we visited.15 For example, about 72 percent of the field staff we 

interviewed said that penalties or sanctions are not used in their offices, or 

are only used occasionally. National data on SSA’s use of monetary 

penalties and administrative sanctions also suggest that these tools are not 

routinely utilized for recipients who fail to report important information 

that can affect their eligibility, including absences from the country. In a 

recent report, we estimated that at most about 3,500 recipients were 

penalized for reporting failures in fiscal year 2001.16 Under the law, SSA 

may impose monetary penalties on recipients who do not file timely 

reports about factors or events that can affect their benefits. A penalty 

causes a reduction in 1 month’s benefits. Penalty amounts are $25 for a 

first occurrence, $50 for a second occurrence, and $100 for the third and 

subsequent occurrences. The penalties are meant to encourage recipients 

to file accurate and timely information. However, a large number of staff 

we interviewed noted that monetary penalties are too low to be an 

effective deterrent against future residency violations. 

The Foster Care Independence Act of 1999 (Pub. L. No. 106-169) gave SSA 

authority to impose administrative sanctions on persons who misrepresent 

material facts that they know, or should have known, were false or 

misleading. In these circumstances, SSA may suspend benefits for up to 24 

months. Despite having this authority, we found that benefit suspensions 

are rarely if ever used by field staff for residency violators. In fact, 

administrative sanctions were only imposed in 21 cases nationwide as of 

January 2002.17 A substantial number of staff told us that they rarely use 

sanctions because the process for imposing them is often time-consuming 

and cumbersome. In addition, some staff reported that SSA management 

does not encourage the use of penalties or sanctions to deter residency 

 15Prior GAO reports indicate that monetary penalties and administrative sanctions may be 

underutilized in the SSI program. See GAO-02-849. 

16See GAO-02-849. 

17Ibid. 
Page 14 GAO-04-789T 

violations. SSA is currently evaluating its policies for imposing monetary 

penalties and administrative sanctions.18

While SSA uses third-party information to verify certain aspects of 

recipients’ eligibility such as income, we found that the agency has 

historically lacked adequate outside data sources to verify that recipients 

are residents of the U.S.19 The agency currently receives periodic paper 

reports from immigration officials on noncitizens who have current and 

planned absences from the U.S. and sends them to the appropriate SSA 

field offices for follow up. However, these procedures are only effective 

for recipients who voluntarily report their absence to immigration 

officials. Thus, SSA will remain limited in its ability to independently verify 

the residency of SSI recipients who deliberately seek to conceal extended 

periods outside the country. Over half of the SSA managers and field staff 

we interviewed told us that access to automated immigration data would 

help them to more accurately verify recipients’ residency. We have 

recommended that SSA consider using a new system called the U.S. Visitor 

and Immigrant Status Indicator Technology system (US VISIT) to verify 

some recipients’ entry and exit from the country. It is currently being used 

by the Department of Homeland Security and will incorporate existing 

entry-exit databases. When fully implemented, this system will provide a 

mechanism to monitor major ports of entry/exit in the U.S., including land 

crossings, seaports, and airports. As noted previously, SSA is examining 

the potential for obtaining access to the system to identify SSI recipients 

who reside outside the U.S. for more than 30 consecutive days. 

SSA has also not fully utilized its authority to obtain independent data 

from other sources such as financial institutions as a tool for detecting 

potential residency violations. The Foster Care Independence Act of 1999 

(FCIA) granted SSA new authority to verify recipients’ financial accounts. 

To implement this authority, SSA issued proposed regulations on its new 

processes for accessing financial data in May 2002.20 In September 2003, 

the agency issued its final regulations. SSA is testing processes to access 

the records of financial institutions and credit bureaus to detect 

 18Ibid. 

19For example, SSA routinely uses information from the Department of Health and Human 

Service’s National Directory of New Hires to verify SSI recipients’ income. 

20See Access to Information Held by Financial Institutions, 67 Fed. Reg. 22021 (now 

codified at 20 C.F.R. pt. 416). 

SSA Had Not Actively 

Pursued Third-Party Data 

Sources to Detect 

Potential Violators 
Page 15 GAO-04-789T 

unreported income or resources of SSI applicant and recipients. However, 

it is not clear whether SSA plans to use financial institution data more 

broadly to detect potential residency violations. In particular, it may be 

missing potentially helpful sources of information such as data on 

recipients who conduct banking transactions outside the U.S. using ATMs. 

As noted previously, a large proportion of the residency overpayments 

SSA detected between 1997 and 2001 were tied to recipients who 

originated in various countries in Latin America and South/Southeast Asia. 

However, SSA currently has no way to identify recipients who withdraw 

SSI benefits from ATMs outside the U.S. Information we obtained from a 

national financial data vendor indicates that it is now possible for 

authorized users to obtain detailed information on individuals’ financial 

transactions from a large number of national and international institutions. 

SSA may be able to obtain data for recipients whose SSI benefits are 

direct-deposited into a U.S. bank and then withdrawn from automated 

teller machines outside the country over extended time periods. In 

response to our recommendation, SSA has indicated that it would explore 

the feasibility of obtaining such information to identify recipients who 

reside outside the U.S. for more than 30 consecutive days. 

Mr. Chairman, this concludes my prepared statement. I will be happy to 

respond to any questions you or other Members of the Subcommittee may 

have. 

For information regarding this testimony, please contact Robert E. 

Robertson, Director, or Daniel Bertoni, Assistant Director, Education, 

Workforce, and Income Security Issues at (202) 512-7215. Individuals 

making contributions to this testimony include Susan Bernstein, Jeff 

Bernstein, Jeremy Cox, Sal Sorbello, Vanessa Taylor, Wendy Turenne, and 

Shana Wallace. 

GAO Contacts and 

Staff 

Acknowledgments 
Page 16 GAO-04-789T 

Supplemental Security Income: Progress Made in Detecting and 

Recovering Overpayments, but Management Attention Should Continue. 

GAO-02-849. Washington, D.C.: September 16, 2002. 

Supplemental Security Income: Status of Efforts to ImproveOverpayment 

Detection and Recovery. GAO-02-962T. Washington, D.C.: July 25, 2002. 

Social Security Administration: Agency Must Position Itself Now to Meet 

Challenges. GAO-02-289T. Washington, D.C.: May 2, 2002. 

Social Security Administration: Status of Achieving Key Outcomes and 

Addressing Major Management Challenges. GAO-01-778. Washington, 

D.C.: June 15, 2001. 

High Risk Series: An Update. GAO-01-263. Washington, D.C.: January 

2001. 

Major Management Challenges and Program Risks: Social Security 

Administration. GAO-01-261. Washington, D.C.: January 2001. 

Supplemental Security Income: Additional Actions Needed to Reduce 

Program Vulnerability to Fraud and Abuse. GAO/HEHS-99-151. 

Washington, D.C.: September 15, 1999. 

Supplemental Security Income: Long–Standing Issues Require More 

Active Management and Program Oversight. GAO/T-HEHS-99-51. 

Washington, D.C.: February 3, 1999. 

Major Management Challenges and Program Risks: Social Security 

Administration. GAO/OCG-99-20. Washington, D.C.: January 1, 1999. 

Supplemental Security Income: Action Needed on Long-Standing 

Problems Affecting Program Integrity. GAO/HEHS-98-158. Washington, 

D.C.: September 14, 1998. 

Supplemental Security Income: Opportunities Exist for Improving 

Payment Accuracy. GAO/HEHS-98-75. Washington, D.C.: March 27, 1998. 

High Risk Program: Information on Selected High-Risk Areas. 

GAO/HR-97-30. Washington, D.C.: May 16, 1997. 

High Risk Series: An Overview. GAO/HR-97-1. Washington, D.C.: February 

1997. 

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