SOCIAL SECURITY 

ADMINISTRATION

Preliminary 

Observations on Key 

Management 

Challenges

Statement of Daniel Bertoni, Director

Education, Workforce, and Income Security Issues

Testimony

Before the Subcommittee on Social 

Security, Committee on Ways and 

Means, House of Representatives

For Release on Delivery 

Expected at 9:30 a.m. EDT 

Friday, April 26, 2013 

GAO-13-545T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-545T, testimony before

the Subcommittee on Social Security, 

Committee on Ways and Means, House of 

Representatives

April 2013

SOCIAL SECURITY ADMINISTRATION

Preliminary Observations on Key Management 

Challenges 

Why GAO Did This Study

SSA is responsible for providing

benefits and services that affect the 

lives of nearly every American. In

calendar year 2012, SSA paid over 62 

million people more than $826 billion in 

Social Security retirement and 

disability benefits and Supplemental 

Security Income payments. However, 

SSA faces increased workloads and 

large numbers of potential employee 

retirements in the long term. A new 

Commissioner will soon be leading the 

agency and will face many complicated 

issues confronting the agency. 

In this statement, GAO discusses initial 

observations from its ongoing review 

and describes (1) key management 

challenges SSA faces in meeting its 

mission-related objectives and (2) the 

extent to which SSA’s planning efforts

address these challenges. To examine 

these issues, GAO reviewed relevant 

planning documents and reports from 

SSA and others as well as SSA 

management information and data on 

workload and staffing projections, 

applicable federal laws and 

regulations, and interviewed SSA

headquarters and regional officials, 

representatives of employee groups, 

and other experts. 

This work is ongoing and GAO has no 

recommendations at this time. GAO 

plans to issue its final report in June 

2013.

What GAO Found

The Social Security Administration (SSA) will experience management 

challenges in four key areas over the next decade. 

Human capital. SSA has not updated its succession plan since 2006 although the 

agency faces an ongoing retirement wave and hiring freeze which will make it 

difficult to respond to growing workload demands. 

Disability program issues. SSA faces ongoing challenges incorporating a more 

modern concept of disability into its programs, while balancing competing needs 

to reduce backlogs of initial and appealed claims and ensure program integrity. 

Information technology (IT). SSA has made strides in modernizing its IT systems 

to address growing workload demands, but faces challenges with these

modernization efforts—such as an ongoing need to refresh and adhere to its IT 

strategic plan and a continued reliance on legacy applications—and correcting 

internal weaknesses in information security. 

Physical infrastructure. SSA is moving toward centralized facilities management, 

but the agency lacks a proactive approach to evaluating its office structure that 

will identify potential efficiencies, such as consolidating offices. 

Long-Term Projected Growth in SSA’s Workload Coincides with Large Numbers of Potential 

Employee Retirements

SSA has ongoing planning efforts, but they do not address the long-term nature 

of these management challenges. For example, SSA is finalizing a service 

delivery plan, but it only includes detailed plans for the next 5 years and focuses

on existing initiatives rather than articulating specific long-term strategies for the 

agency’s service delivery model. Its current strategic plan also largely describes 

the continuation, expansion, or enhancement of ongoing activities, rather than 

proposing broad changes to address emerging issues. Since 2008, SSA has not 

had an entity or individual dedicated to strategic planning. Various groups have 

called on SSA to articulate a longer-term strategy, which it last did in 2000, 

motivated by many conditions which remain true today, such as increasing 

workloads, advances in technology, and employee retirements, and which will 

need to be addressed in the future. 

View GAO-13-545T. For more information, 

contact Daniel Bertoni at (202) 512-7215 or 

bertonid@gao.gov. 
Page 1 GAO-13-545T

441 G St. N.W.

Washington, DC 20548

Chairman Johnson, Ranking Member Becerra, and Members of the 

Subcommittee:

Thank you for the opportunity to discuss our preliminary observations on 

the Social Security Administration’s (SSA) management challenges. SSA 

is responsible for providing benefits and services that affect the lives of 

nearly every American. In calendar year 2012, SSA paid over 62 million 

people more than $826 billion in Social Security retirement and disability 

benefits and Supplemental Security Income payments. As more members 

of the baby boom generation become eligible for retirement benefits and 

individuals under age 62 reach their disability-prone years, a surge in 

benefit applications is expected. SSA’s own workforce may also change 

and decrease in the coming years, and evolving technology will affect 

service delivery expectations. At the same time, SSA’s expanded use of 

electronic services will affect how the agency should deploy and use its 

workforce. In addition, the agency will need to operationalize any 

legislative changes that may be made in an effort to avoid the projected 

exhaustion of the Social Security trust funds. As a result of these realities, 

SSA will encounter increased pressure to serve the public while still 

ensuring program integrity. Moreover, SSA will likely continue to 

experience budget constraints.

A new Commissioner will soon be leading the agency and will face these 

many interrelated issues.1 Decisions made early in the Commissioner’s 

term could help set the course for the agency over the long term and 

determine how well-positioned it is to adapt to changing realities.2

To examine these issues, we obtained SSA management information and 

administrative data related to workload and staffing projections. We 

My 

statement today focuses on initial observations from our ongoing review 

and describes (1) key management challenges SSA faces in meeting its 

mission-related objectives and (2) the extent to which SSA’s planning 

efforts address these challenges.

 

1

The SSA Commissioner is appointed for a 6-year term. 42 U.S.C. § 902(a)(3). The last 

Commissioner’s term expired on January 19, 2013, and an acting commissioner is 

currently leading the agency. As of April 2013, a new Commissioner had not yet been 

appointed.

2

In this testimony, short-term generally means up to 5 years out and long-term means 

more than 5 years.

 
 

Page 2 GAO-13-545T

assessed the reliability of the data by reviewing related documentation 

and interviewing knowledgeable agency officials and determined they 

were sufficiently reliable to describe agency projections. We also 

reviewed key agency documents, such as SSA’s strategic plan, human 

capital plan, strategic leadership succession plan, information technology 

strategic plan, and agencywide draft service delivery plan. We conducted 

in-depth interviews with SSA officials, including regional commissioners, 

and other experts, including representatives of the Social Security 

Advisory Board and others familiar with long-term planning. We reviewed

GAO internal control standards and relevant GAO, SSA Office of the 

Inspector General (OIG), and Social Security Advisory Board reports, as 

well as applicable federal laws and regulations and SSA’s policies and 

procedures. We shared the information that this testimony is based on 

with agency officials and obtained their technical comments. We have 

incorporated these comments, as appropriate.

We are completing this work in accordance with generally accepted 

government auditing standards and our final report will be issued in June 

2013. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained will provide a reasonable basis for our findings 

and conclusions based on our audit objectives.

SSA provides financial assistance to eligible individuals through three 

major benefit programs:

• Old-Age and Survivors Insurance (OASI)—provides retirement 

benefits to older workers and their families and to survivors of 

deceased workers.

• Disability Insurance (DI)—provides benefits to eligible workers who 

have qualifying disabilities, and their eligible family members.

• Supplemental Security Income (SSI)—provides income for aged, 

blind, or disabled individuals with limited income and resources.

SSA projects that the number of beneficiaries and benefit payments for 

the three programs will increase over the next several years. DI and SSI 

are the nation’s largest federal disability programs, and applications for 

benefits have grown significantly over the last 5 years, due in part to baby 

boomers reaching their disability-prone years, as well as a sustained 

Background 
 

Page 3 GAO-13-545T

economic downturn and high unemployment. Retirement claims have 

also steadily increased in recent years.

Although SSA’s disability programs account for only about 23 percent of 

its total benefit outlays, they represent 66 percent of the administrative 

expenses for these 3 programs. Complex eligibility rules and many layers 

of review with multiple handoffs from one person to another make the 

disability programs complicated, and therefore costly, to administer.

Both OASI and DI face long-term financial challenges. In 2012, SSA’s 

Office of the Chief Actuary projected that the DI and OASI Trust Funds 

would be exhausted in 2016 and 2035, respectively. If the trust funds are 

depleted before legislative changes are made to restore long-term 

solvency, the agency projects that it will be able to pay benefits only to 

the extent that funds are available.3

In support of its mission and programs, SSA’s basic functions include 

maintaining earnings information, making initial eligibility determinations 

for program payments, making changes to beneficiaries’ accounts that 

affect their benefit payments, and issuing Social Security numbers.4 SSA 

has over 80,000 state and federal employees5

SSA is operating in an environment of constrained resources and 

budgetary uncertainty. According to a former SSA Commissioner and 

agency budget documents, while SSA’s administrative budget increased 

about 32 percent from fiscal year 2001 to 2010,

and about 1,700 facilities 

nationwide. Almost 182,000 people visit one of the nearly 1,300 SSA field 

offices daily and more than 445,000 people call the offices daily to file 

applications, ask questions, or update their information.

6

 

3

While money would still be coming in from the Social Security taxes paid by current 

workers, the agency projects that it would not be sufficient for beneficiaries to receive their 

full benefit.

much of this funding has 

4

Social Security numbers have become the universal identifier of choice for government 

agencies and are currently used for many non-Social Security purposes.

5

SSA funds state agencies called Disability Determination Services (DDS) to process 

disability applications and conduct continuing disability reviews in accordance with SSA 

policies and procedures.

6

This figure has been adjusted for inflation. The nominal increase between fiscal years 

2001 and 2010 was about 61 percent.
 

Page 4 GAO-13-545T

been used to keep up with increases in expenses such as personnel 

costs, rent, and security.

Over the next decade, SSA will experience management challenges in 

four key areas: (1) human capital, (2) disability program issues, (3) 

information technology, and (4) physical infrastructure.

Over the next decade, SSA’s ongoing retirement wave, coupled with a 

hiring freeze that has been in place since 2010, represents a significant 

challenge for the agency in meeting the projected growth in work 

demands. Although not all employees will necessarily retire when eligible, 

nearly 7,000 headquarters employees and more than 24,000 field 

employees will be retirement eligible between 2011 and 2020. The 

agency projects that it could lose nearly 22,500 employees, or nearly onethird of its workforce, during this time due to retirement—its primary 

source of attrition.7

Retaining institutional knowledge and developing new leaders. SSA 

could face a significant loss of institutional knowledge and expertise in the 

coming years. An estimated 43 percent of SSA’s non-supervisory 

employees and 60 percent of its supervisors will be eligible to retire by 

2020. Regional and district managers told us they have already lost staff 

experienced in handling the most complex disability cases.

The Commissioner stated in SSA’s fiscal year 2012 

budget overview that as a result of attrition, some offices could become 

understaffed, and that without a sufficient number of skilled employees, 

backlogs and wait times could significantly increase and improper 

payments could grow. As SSA’s workforce decreases and its workload 

increases, our preliminary work suggests that the agency’s strategies for 

preventing a loss of leadership and skills may prove insufficient for a 

variety of reasons. 

8

 

7

Data reflect SSA’s most recent projections from its September 2011 Retirement Wave 

Report, which only includes actual retirement figures through fiscal year 2010. Officials 

told us that they previously produced this report annually, but currently produce it every 

other year. 

SSA officials 

and DDS managers told us that it typically takes 2 to 3 years for new 

employees to become fully proficient and that new hires benefit from 

8

DDS staff are state employees and are subject to state furloughs, according to SSA. 

SSA Faces Challenges 

in Several Key Areas

Human Capital
 

Page 5 GAO-13-545T

mentoring by veteran employees. Because of budget cutbacks, SSA has 

also curtailed its leadership development programs, which have 

historically been used to establish a pipeline of future leaders. 

Succession planning. SSA’s most recent succession plan was issued in 

2006, even though the agency has experienced significant changes since 

that time, including a hiring freeze and greater movement toward online 

services. The most recent succession plan established a target of 

evaluating and updating the plan by the end of 2007. Internal control 

standards state that management should ensure that skill needs are 

continually assessed and that the organization is able to obtain a 

workforce with those required skills to achieve organizational goals.9 Our 

prior work also indicates that leading organizations use succession 

planning to help prepare for an anticipated loss of leadership.10

SSA’s 2006 succession plan states that without sound succession 

planning, SSA’s loss of leadership would result in a drain on institutional 

knowledge and expertise at a time when workloads are growing. This loss 

of knowledge and expertise could result in increasing workloads, 

backlogs, and improper payments. Several SSA officials told us 

individuals with less experience and training are beginning to assume 

supervisory roles and some have made poor decisions related to such 

things as providing reasonable accommodations to employees with 

disabilities. Some officials also told us that inexperienced managers are 

also less proficient at supervising others, which leads to inefficiencies in 

managing increasing workloads.

Forecasting workforce needs. Findings from OIG reports raise 

additional concerns about SSA’s ability to accurately forecast workload 

 

9

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999).

10See GAO, Human Capital: Succession Planning and Management Is Critical Driver of 

Organizational Transformation, GAO-04-127T (Washington, D.C.: Oct. 1, 2003); Human 

Capital: Selected Agencies Have Opportunities to Enhance Existing Succession Planning 

and Management Efforts, GAO-05-585 (Washington, D.C.: June 30, 2005); and Human 

Capital: Key Principles for Effective Strategic Workforce Planning, GAO-04-39

(Washington, D.C.: Dec. 11, 2003).
 

Page 6 GAO-13-545T

demands and workforce needs.11 These reports found methodological 

flaws in the workload and work year data SSA uses to formulate and 

execute its budget. For example, the reports concluded that the internal 

controls and main processes related to work sampling—which SSA uses 

to measure work and assign direct and indirect costs to workloads—did 

not ensure the completeness and reliability of data in SSA’s Cost Analysis 

System.12 The reports found that work samples were not consistently 

performed. Furthermore, they noted no instances of peer or management 

review, which could improve the accuracy of the workload data 

collected.13 SSA is taking steps to improve data sampling in response to 

these findings.

SSA continues to face challenges in modernizing its disability programs, 

while seeking a balance between reducing initial claims and hearings 

backlogs and conducting oversight activities to ensure program integrity.

Modernizing disability programs. We designated federal disability 

programs as a high-risk area in 2003, in part because these programs 

emphasize medical conditions in assessing an individual’s work 

incapacity without adequate consideration of the work opportunities 

afforded by advances in medicine, technology, and job demands.14

 

11SSA’s OIG contracted with Grant Thornton LLP to conduct the following reviews of 

SSA’s Cost Analysis System and cost allocation methodology: SSA OIG, Cost Analysis 

System Background Report and Viability Assessment, A-15-10-20149 (April 2011); SSA 

OIG, Office of Disability Adjudication and Review Cost Allocation Process, A-15-10-20150 

(May 2011); SSA OIG, The Social Security Administration Cost Allocation Process, A-15-

10-20151 (Dec. 2011); and SSA OIG, The Social Security Administration Cost Allocation 

Methodology, A-15-10-20152 (June 2012).

Concerns have been raised that the medical listings being used lack 

current and relevant criteria to evaluate disability applicants’ inability to 

work, and that by failing to consider the role of assistive devices and 

12SSA’s Cost Analysis System is used to allocate (1) administrative costs to trust fund and 

general fund programs administered by SSA and (2) reimbursable work performed by 

SSA for outside organizations.

13SSA officials told us that these data are statistically reliable at a national level and are 

combined with other data sources to forecast workloads. However, SSA has not yet 

assessed enough work sampling data to produce a refined estimate of the statistical 

reliability of workload calculations based on work sampling data. 

14GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: February 2013).

Disability Program Issues
 

Page 7 GAO-13-545T

workplace accommodations, SSA may be missing opportunities to help 

individuals with disabilities return to work. SSA has recently taken steps 

toward comprehensively updating the medical and labor market 

information that underlie its disability criteria.

• As of March 2013, SSA had completed comprehensive revisions of its 

medical criteria for 10 of the 14 adult body systems and initiated 

targeted reviews of certain conditions under these systems, as 

appropriate, according to SSA officials.15

• SSA has recently made progress toward replacing its outdated 

occupational information system, including signing an interagency 

agreement with the Department of Labor’s Bureau of Labor Statistics 

to design, develop, and carry out pilot testing of an approach to collect 

data for an updated system.16 According to SSA officials, the agency 

still needs to determine exactly how many occupations it will include in 

its new system and the extent to which it might leverage aspects of 

the Department of Labor’s existing occupational database, the 

Occupational Information Network (O*NET).17 The agency also needs 

to determine the extent to which the new system will include cognitive 

information, according to agency officials. In addition, officials told us 

the agency has not yet formalized a cost estimate and lacks a

research and development plan.

• SSA has also taken steps to more fully consider individuals’ ability to 

function with medical impairments in their work or other environments, 

which is consistent with modern views of disability. However, SSA 

disagreed with our prior recommendation to conduct limited, focused 

studies on how to more fully consider factors such as assistive 

 

15To determine an applicant’s eligibility for disability benefits, SSA examiners assess the 

applicant’s medical impairments against the Listings of Impairments, also known as the 

medical listings, which are organized into 14 major body systems for adults and reflect 

medical conditions that have been determined by the agency to be severe enough to 

qualify an applicant for benefits. According to SSA officials, there are almost 300 medical 

impairments organized in 119 listings under the 14 major body systems for adults.

16SSA evaluates claimants’ ability to work in the national economy as part of its disability 

decision-making process. See 42 U.S.C. §§ 423(d), 1382c(a). The occupational 

information system provides information on jobs in the national economy.

17O*NET is a general purpose occupational information database used for workforce 

development, economic development, career exploration, and academic and policy 

research. Selected occupations within the O*NET system are updated each year. 
 

Page 8 GAO-13-545T

devices and workplace accommodations in its disability 

determinations,18

Managing workloads to reduce disability initial claims and hearings 

backlogs. Although SSA has reported progress with its disability 

hearings backlog reduction plan, the agency still faces challenges 

managing significant and persistent disability workload increases, both in 

terms of initial claims and hearings for appealed claims. SSA has 

generally increased the number of initial disability claims it has processed 

annually—completing over 3 million claims each year since fiscal year 

2010—but the number of initial claims submitted by applicants has 

outpaced SSA’s efforts. Thus, the number of claims awaiting a decision is 

also growing. SSA’s 707,700 initial claims pending in fiscal year 2012 

were 27 percent higher than fiscal year 2008 levels. To help manage 

workloads, Disability Determination Services share work nationally by 

shifting resources between DDSs on a weekly basis and dedicated teams 

in certain states assist by taking claims from states with the highest levels 

of pending claims. SSA also identifies claimants with the most severe 

disabilities and expedites decisions on these cases,

stating that such studies would be inconsistent with 

Congress’ intentions. We noted, however, that Congress has not 

explicitly prohibited SSA from considering these factors and we 

believe that conducting these studies would put SSA in a better 

position to thoughtfully weigh various policy options before deciding 

on a course of action.

19 although they 

represented less than 6 percent of all initial determinations in September 

2012.20

 

18GAO, Modernizing SSA Disability Programs: Progress Made, but Key Efforts Warrant 

More Management Focus, 

The number of disability beneficiaries is projected to grow about 

15 percent between 2012 and 2025. Most of SSA’s regional 

GAO-12-420 (Washington, D.C.: June 19, 2012).

19SSA has two initiatives to expedite cases for the most severely disabled individuals: 

Quick Disability Determination and Compassionate Allowances. Using predictive modeling 

and computer-based screening tools to screen initial applicants, the Quick Disability 

Determination identifies cases where a favorable disability determination is highly likely 

and medical evidence is readily available, such as with certain cancers and end-stage 

renal disease. With Compassionate Allowances, SSA targets the most obviously disabled 

applicants based on available medical information and generally awards benefits if there is 

objective medical evidence to confirm the diagnosis and the applicant also meets SSA’s 

non-disability criteria.

20SSA derives this percentage by dividing the total number of initial disability claims 

identified as Quick Disability Determinations, Compassionate Allowances, or both, by the 

total number of electronic initial disability claims filed in September, the last month of the 

fiscal year. 
 

Page 9 GAO-13-545T

commissioners told us that simplifying disability policy, such as by 

streamlining work incentive and work reporting rules, could also help staff 

better manage disability workloads.

SSA is processing more initial claims annually, but claims denied at the 

initial level can be appealed and often result in a request for a hearing by 

an administrative law judge. To reduce its hearings backlog, SSA has 

used strategies such as hiring additional administrative law judges and 

support staff, opening more hearings offices, and conducting more 

hearings via video conference. Our preliminary results indicate that, 

although SSA completed more hearing requests in fiscal year 2012 than 

in previous years, the agency fell short of its hearings completion target 

by more than 54,000 hearings, and at 321 days, the average wait time for 

hearings exceeded the agency’s target by 41 days. At the same time, the 

agency eliminated most of its oldest pending hearing requests.

Ensuring disability program integrity. SSA also faces disability 

program integrity challenges due to budget decisions and the way it 

prioritizes competing workload demands such as processing initial claims. 

Continuing disability reviews (CDR) are periodic reviews that the agency 

is required to perform to verify that certain recipients still meet SSA 

disability rules. SSA reported that in fiscal year 2010, the agency did not 

conduct 1.4 million CDRs that were due for review, in part because of 

competing workloads. In June 2012, we also found that the number of 

childhood CDRs conducted fell from more than 150,000 in fiscal year 

2000 to about 45,000 in fiscal year 2011 (a 70 percent decrease). During 

this time, the number of adult CDRs fell from 584,000 to 179,000.21

When CDRs are not conducted as scheduled, some recipients may 

receive benefits for which they are no longer eligible, and the agency may 

forgo future program savings. For fiscal year 2010, SSA estimated that 

every $1 spent on CDRs yielded $9.30 in savings, amounting to a total 

future savings to federal programs of $3.5 billion.22

 

21GAO, Supplemental Security Income: Better Management Oversight Needed for 

Children’s Benefits, 

Although CDRs are a 

cost-effective way to help ensure that only those eligible for benefits 

GAO-12-497 (Washington, D.C.: June 26, 2012).

22This figure represents the present value of future benefits saved for OASDI, SSI, 

Medicare, and Medicaid. The estimate includes savings to Medicare and Medicaid 

because in some cases eligibility for SSI and DI confers eligibility for certain Medicare or 

Medicaid benefits.
 

Page 10 GAO-13-545T

continue to receive them, SSA officials reported that resource constraints 

have made it more difficult to balance competing workloads and remain 

current on the millions of CDRs it is required to conduct each year.

SSA has taken steps to modernize its information technology (IT) 

systems to help keep pace with workload demands, but some entities 

have identified additional areas that could be improved. In addition, 

increased risk exists that sensitive information could be exposed because 

of internal security weaknesses.

IT modernization efforts. SSA has begun to take action on several of 

our prior recommendations to improve the way it modernizes its IT 

systems.23 For example, in May 2012, SSA released its Capital Planning 

and Investment Control guide. The guide describes the roles and 

responsibilities of staff under the agency’s realigned IT organizational 

structure.24 SSA also issued an updated IT strategic plan that covers 

2012-2016 and supports the updated agencywide strategic plan. 

Furthermore, SSA officials told us that they intend to revisit the IT 

strategic plan annually and refresh it as appropriate. Our prior work 

indicates that SSA has not always had an updated IT strategic plan to 

guide its modernization efforts.25

SSA is modernizing its IT systems, in part, to support a shift toward 

offering more online services. However, SSA’s OIG has expressed 

In the absence of regular updates, SSA 

based its IT modernization efforts on program activities that were tied to 

short-term budget cycles and not developed in the context of a long-term 

strategic plan. While we are encouraged that SSA issued an updated IT 

strategic plan, at present, it is too soon to assess the extent to which SSA 

will adhere to the plan and annual reevaluation cycle.

 

23GAO, Social Security Administration: Improved Planning and Performance Measures 

Are Needed to Help Ensure Successful Technology Modernization, GAO-12-495

(Washington, D.C.: April 26, 2012).

24In 2011, SSA significantly realigned its IT organizational structure—consolidating its 

Chief Information Officer (CIO) office with its Systems office—but did not conduct an 

analysis of the realigned functions and how the newly assigned roles and responsibilities 

would carry out the former Office of CIO functions. We previously recommended that SSA 

define the roles and responsibilities of realigned staff. 

25GAO-12-495. 

Information Technology
 

Page 11 GAO-13-545T

concerns that the agency is continuing to rely on its legacy applications.26

Many of its programs are written in COBOL,27 which is one of the oldest 

computer programming languages and is difficult to modify and update. 

The OIG noted also that the agency risks losing key institutional 

knowledge relating to COBOL programming and its increasingly complex 

information systems. According to the OIG, SSA has indicated that 

modernizing its legacy applications will ultimately reduce operating costs 

and improve service delivery. However, agency officials told us they have 

conducted analyses that show the costs of moving away from using 

COBOL currently outweigh the benefits. Accordingly, the OIG found that 

SSA has developed an approach to gradually reduce its reliance on 

COBOL for core processing of program transactions but has not yet 

articulated a formal strategy for converting its legacy programs to a more 

modern programming language.28

Information security weaknesses. SSA uses and stores a great deal of 

sensitive information, but has been challenged to effectively protect its 

computer systems and networks in recent years. Our prior work states 

that it is essential for agencies to have information security controls that 

ensure sensitive information is adequately protected from inadvertent or 

deliberate misuse, fraudulent use, and improper disclosure, modification, 

or destruction. However, in fiscal year 2012, several concerns were 

raised about SSA’s information security program.

SSA officials disagree that such a 

strategy is needed because they consider this programming language to 

be sufficient for their needs and point out that it is still used by other 

businesses.

• SSA’s OIG identified weaknesses in some of the agency’s information 

security program components that limited SSA’s overall effectiveness 

 

26SSA OIG, The Social Security Administration’s Software Modernization and Use of 

Common Business Oriented Language, A-14-11-11132. (Baltimore, MD: May 2012).

27SSA relies on legacy applications programmed with Common Business Oriented 

Language, or COBOL. COBOL was introduced in 1959 and became the first widely used, 

high-level programming language for business applications. 

28SSA OIG, A-14-11-11132.
 

Page 12 GAO-13-545T

in protecting the agency’s information and information systems,29

constituting a significant deficiency in the agency’s information 

security program under the Federal Information Security Management 

Act of 2002 (FISMA).30

• The OIG has also noted that weaknesses in certain elements of the 

agency’s information security program may challenge SSA’s ability to 

use its IT infrastructure to support current and future workloads.

• The agency’s independent financial auditor also identified a material 

weakness in information systems controls over financial management 

statements based on several concerns, many of which have been 

longstanding.31

SSA is implementing a multi-year plan to address many of these 

weaknesses. However, the OIG stated that one of the underlying causes 

for these weaknesses is that SSA needed to strategically allocate 

sufficient resources to resolve or prevent high-risk security weaknesses in 

a more timely fashion.32

 

29These weaknesses were identified in the areas of continuous monitoring, configuration 

management, identity and access management, risk management, and contractor 

systems oversight. See SSA OIG, The Social Security Administration’s Compliance with 

the Federal Information Security Management Act of 2002 for Fiscal Year 2012, A-14-12-

12120. (Baltimore, MD: Nov. 15, 2012).

Though SSA officials emphasized that the 

30FISMA was enacted as title III of the E-Government Act of 2002, Pub. L. No. 107-347, 

116 Stat. 2899, 2946. According to OMB, a significant deficiency is a weakness in an 

agency’s overall information systems security program or management control structure, 

or within one or more information systems, that significantly restricts the capability of the 

agency to carry out its mission or compromises the security of its information, information 

systems, personnel, or other resources, operations, or assets. In this context, the risk is 

great enough that the agency head and outside agencies must be notified and immediate 

or near-immediate corrective action must be taken. See OMB, Memorandum for Heads of 

Executive Departments and Agencies: FY 2012 Reporting Instructions for the Federal 

Information Security Management Act and Agency Privacy Management (September 27, 

2012).

31In this context, the external auditors, Grant Thornton, defined a material weakness as 

one or more deficiencies in internal controls such that there is a reasonable possibility that 

a material misstatement of the entity’s financial statements will not be prevented or 

detected and corrected on a timely basis. A deficiency in internal control exists when the 

design or operation of a control does not allow management or employees, in the normal 

course of performing their assigned functions, to prevent, or detect and correct 

misstatements on a timely basis.

32SSA OIG, A-14-12-12120. 
 

Page 13 GAO-13-545T

information security risks identified were internal,33 inappropriate internal 

access to or misuse of sensitive information can have a significant 

impact. For example, according to the OIG, in 2012, a former SSA 

employee was found to have used her position to provide personally 

identifiable information to a person outside the agency, who is accused of 

using the information for criminal purposes.

SSA is taking steps to centralize its facilities management, which may 

standardize facilities decisions, but our preliminary results show that the 

agency lacks a proactive approach to evaluate its physical infrastructure 

and identify potential efficiencies.

Centralizing facilities management. SSA is beginning to centralize its 

facilities management, but officials indicated it may lead to a trade-off 

between efficiency and flexibility. The agency administers its programs 

and services through a network of over 1,700 facilities, at an annual cost 

of approximately $1 billion.34

Limited facilities planning efforts. A contractor hired by the General 

Services Administration (GSA) is currently working on a long-term plan for 

SSA’s headquarters facilities, called the Master Housing Plan.

The agency has had a more decentralized

facilities management process, but officials told us they are currently 

moving all facilities management under SSA’s Office of Facilities and 

Supply Management (OFSM). Some officials said that centralization can 

lead to greater efficiencies and standardization, but cautioned that there 

may be less flexibility and awareness of local circumstances—such as the 

layout of specific buildings—at the regional level.

35

 

33The OIG and external auditors did not perform external penetration tests during their 

audits.

An SSA 

official told us that the contractor has solicited input and feedback from 

the agency on the draft plan. However, an SSA official told us the agency 

34These facilities fall into three categories: 33 headquarters facilities located 

predominantly in the Baltimore/Washington, D.C. metropolitan area; an extensive network 

of field-based facilities used to process initial claims and post-entitlement actions, 

including nearly 1,300 field offices; and approximately 350 facilities that carry out the 

agency’s disability adjudication and review process.

35Earlier drafts of the Master Housing Plan were developed by GSA and maintained by 

OFSM. For the current stage, GSA engaged a contractor to carry out the study, according 

to SSA officials. 

Physical Infrastructure
 

Page 14 GAO-13-545T

lacks a comprehensive planning effort that encompasses all of the 

agency’s facilities, including nearly 1,300 field offices.

Efforts to reduce office space. SSA officials told us the agency is 

engaged in ongoing efforts to reduce the footprint of its headquarters 

facilities. According to an SSA official, vacant space in headquarters 

facilities has increased during the past few years as a result of the 

shrinking workforce.36 SSA officials told us that OFSM is analyzing the 

space needs of all offices in the headquarters area and will reassign 

space according to staffing levels and other criteria. According to an 

official, SSA’s efforts were motivated by several factors, including an 

OMB directive37

In addition to these headquarters-focused efforts, SSA is reducing office 

space in the field as opportunities arise, but our preliminary work shows 

that it lacks a proactive plan to assess field facilities for potential space 

reductions. When OFSM reviews a field-based space action (e.g., lease 

renewal, move, renovation), an SSA official told us that the proposed 

action is assessed to identify if there are opportunities to reduce or 

otherwise change the facility’s space allocation. However, OFSM’s 

standards do not call for wholesale reductions or reconfigurations of 

existing space. SSA has established a workgroup that is developing 

guidance to help identify opportunities to reduce space by co-locating 

certain field-based facilities, such as field offices and video-based 

disability hearing offices, but the workgroup’s proposals need to be 

reviewed and it is not yet clear if the agency will adopt them.

to make more efficient use of federal office space; the 

agency’s ultimate goal of terminating all commercial leasing in the 

headquarters area; and, to a lesser degree, reducing current vacancies in 

headquarters.

Considerations for realigning the facilities structure. SSA has been 

advised to consider aligning its facilities structure with its changing 

methods of providing services. For example, the OIG reported in 2011 

 

36This official estimated that, as of February 28, 2013, there were approximately 800 to 

1,000 vacant workspaces in SSA headquarters facilities. 

37In May 2012, OMB’s Acting Director released a memo, which calls for agencies to make 

more efficient use of the government’s real estate assets and generally prohibits agencies 

from increasing their real estate inventory, or footprint. See OMB, Memorandum to the 

Heads of Executive Agencies and Departments: Promoting Efficient Spending to Support 

Agency Operations (May 11, 2012). 
 

Page 15 GAO-13-545T

that SSA’s long-term planning efforts should assess whether the agency’s 

existing office structure will align with future methods of providing 

customer service.38 In 2011, the Social Security Advisory Board 

suggested that as SSA continues to increase electronic service delivery, it 

adapt its organizational structure to maximize the effectiveness of the 

agency’s transformation. In prior work, we have also reported that federal 

agencies may be able to increase efficiency and effectiveness by 

consolidating physical infrastructure or management functions.39

SSA has begun to take advantage of opportunities to consolidate or colocate offices in the regions. SSA regional commissioners told us that 

field offices have been consolidated in most of its of 10 regions and 

several regions have co-located with the Office of Disability Adjudication 

and Review to provide space to hold disability hearings within field 

offices.

Several 

agencies—including the Internal Revenue Service, the U.S. Postal 

Service, and the Census Bureau—plan to or have already undertaken 

consolidation efforts to achieve efficiencies and save money. At the same 

time, SSA has long considered face-to-face interaction to be the gold 

standard of customer service, and an official has told us that any changes 

away from that model would represent a major cultural shift for the 

agency.

40

Despite these actions, our preliminary work indicates that SSA has not 

engaged in a systematic analysis of potential approaches for 

consolidating its facilities or realigning its facilities with the agency’s 

evolving service delivery model. The National Research Council 

recommends that federal agencies use their organizational mission to 

These consolidations and co-locations can save money on rent 

and guard services. Regional commissioners told us that a single office 

consolidation can save up to $3 million over a 10-year period.

 

38SSA OIG, The Social Security Administration’s Customer Service Delivery Plan, A-07-

11-01125 (Baltimore, MD: July 2011).

39GAO, Streamlining Government: Questions to Consider When Evaluating Proposals to 

Consolidate Physical Infrastructure and Management Functions, GAO-12-542. 

(Washington, D.C.: May 23, 2012).

40SSA officials told us that offices are consolidated by closing an office and moving its 

staff into another office. Consolidations often occur by merging two offices that are located 

very close together, or when staffing in one office has fallen below levels needed to 

sustain the office. In cases where offices are closed because of prohibitively low staffing 

levels, the remaining staff are generally absorbed into nearby offices. 
 

Page 16 GAO-13-545T

guide facilities investment decisions and then integrate these investments 

into their strategic planning processes. We previously reported that 

agencies should consider the potential costs and benefits of any 

widespread efforts to consolidate physical infrastructure before embarking 

on such an action. To support its rationale for consolidation and assess 

the potential impact and challenges of consolidation, we suggested that 

agencies consider issues such as how to fund up-front costs associated 

with consolidation and the effect on various stakeholders.

SSA has ongoing planning efforts, but we have identified two major areas 

in which these efforts may fall short in addressing the long-term nature of 

the agency’s management challenges: (1) its planning efforts are shortterm and do not adequately address emerging issues, and (2) it lacks 

continuity in its strategic planning leadership.

Need for longer-term efforts to address emerging issues. SSA’s 

planning efforts, from an overall strategic plan to its service delivery plan, 

typically look no more than 5 years out. For example, SSA is finalizing a 

service delivery plan, but the draft document primarily contains detailed 

plans for the next 5 years and focuses on existing initiatives rather than 

articulating specific long-term strategies for the agency’s service delivery 

model. While the draft service delivery plan acknowledges the need to 

assess the agency’s workforce structure, it stops short of providing a 

vision for how the workforce structure should best make use of expanded 

virtual and automated service delivery channels. The plan also states that 

issues such as the need to strategically develop and place self-service 

options and to determine whether the Internet should be the primary 

service delivery mechanism for certain services, will need to be 

considered over the next 6 to 10 years, but it does not provide a specific 

strategy for how to resolve these issues. Further, the plan does not 

articulate SSA’s long-term costs and benefits for its investments, such as 

the specific impact that moving to online services is expected to have on 

backlogs and workforce needs. For many years, we have recommended 

that SSA develop a comprehensive service delivery plan that outlines 

SSA’s Planning Efforts 

Are Not Adequate to 

Address the LongTerm Nature of Its 

Management 

Challenges 
 

Page 17 GAO-13-545T

how it will deliver quality service while managing growing work demands 

within a constrained budget.41

Similarly, our preliminary work shows that SSA’s current strategic plan 

largely describes the continuation, expansion, or enhancement of existing 

activities, rather than proposing new initiatives or broad changes to 

address emerging issues. One of the goals of the agency’s strategic plan 

is to increase the public’s use of online services, but several SSA officials 

and representatives of one SSA management group told us that this shift 

will not be sufficient to address growing service demands. For example, 

as discussed earlier, to meet service challenges, some officials said the 

agency will also need to simplify its disability policy and develop a 

strategy for meeting the needs of individuals who may not have access to 

computers at home or who may not be computer literate. At the same 

time, however, some SSA officials noted that the agency may need to 

limit the number of days per week that field offices are open to the public 

to contain costs.

Various groups have called on SSA to acknowledge emerging long-term 

issues by articulating them in a longer-term strategy. In 2011, the Social 

Security Advisory Board called for SSA to develop a strategy for service 

delivery through 2020 that will serve as the cornerstone for its IT, human 

capital, policy review, and organizational restructuring plans.42 The SSA 

OIG also called on SSA to prepare a longer-term vision to ensure that it 

has the programs, processes, staff, and infrastructure necessary to 

provide service in the future.43

 

41See GAO, Social Security Administration: Service Delivery Plan Needed to Address 

Baby Boom Retirement Challenges,

Several SSA officials we spoke with told us 

that developing a long-term service delivery plan should be the next 

Commissioner’s top priority. Moreover, regional commissioners and field 

GAO-09-24 (Washington, D.C.: Jan. 9, 2009); Social 

Security: Sustained Effort Needed to Improve Management and Prepare for the Future, 

GAO/HRD-94-22 (Washington, D.C.: Oct. 27, 1993); SSA’s Management Challenges: 

Strong Leadership Needed to Turn Plans Into Timely Meaningful Action, 

GAO/T-HEHS-98-113 (Washington, D.C.: Mar. 12, 1998); and Social Security 

Administration: Effective Leadership Needed to Meet Daunting Challenges, 

GAO/HEHS-96-196 (Washington, D.C.: Sept.12, 1996).

42Social Security Advisory Board. A Vision of the Future for the Social Security 

Administration (Washington, D.C.: March 2011). 

43SSA OIG, Fiscal Year 2012 Inspector General Statement on the Social Security 

Administration’s Major Management and Performance Challenges, A-02-13-13041 

(Baltimore, MD: Nov. 2012).
 

Page 18 GAO-13-545T

managers said that such a plan could help to clarify issues such as what 

services will be available online in the future, how these services will be 

implemented, how IT modernization will support service delivery, and 

which offices will have responsibility for different workloads. SSA 

prepared its last long-term agency vision—which covered a 10-year 

period—in 2000, motivated by many conditions which remain true today, 

such as increasing workloads, advances in technology, and employee 

retirements.

Senior agency officials told us that as an agency, SSA generally views 

long-term planning as a secondary responsibility and is more focused on 

addressing short-term, tactical issues. Several officials also noted that 

uncertainty about budget resources has made it difficult for SSA to 

engage in multi-year planning. One official commented that as a result of 

its budget situation, the agency has been reactive and failed to consider 

big picture issues. Strategic planning literature notes the success of 

organizations that are flexible and adaptive; these organizations plan for 

different scenarios and consider strategic options.

Need for continuity in strategic planning leadership. The GPRA 

Modernization Act of 2010 charges top agency leadership with improving 

agency management and performance.44 SSA previously had an Office of 

the Chief Strategic Officer, which was responsible for overseeing strategic 

planning. This office worked with all SSA components to prioritize 

initiatives that would help the agency meet its goals and determined how 

to link these initiatives to the agency’s budget. However, the office was 

dissolved in May 2008, and since that time the agency has not had an 

office dedicated to strategic planning. Senior officials said that SSA 

should dedicate a position, such as a chief strategic officer, that will report 

directly to the Commissioner and be solely responsible for strategic 

planning in order to bring sustained, focused attention to long-term 

management challenges.

In conclusion, the challenges SSA faces will substantially affect its ability 

to address critical concerns in the coming years. SSA’s efforts to meet 

many of its management challenges have been complicated by budgetary 

constraints and continued uncertainty about the current and future fiscal 

 

44Pub. L. No. 111-352, §8, 124 Stat. 3866, 3878 (2011).

Concluding 

Observations 
 

Page 19 GAO-13-545T

environment. Despite these constraints, the agency will need to balance 

competing demands for resources—both in terms of managing day-to-day 

budget decisions and planning for emerging and long-term budget issues. 

SSA already manages a substantial and diverse workload and the 

demands on SSA from new retirees and individuals with disabilities will 

continue to grow.

SSA’s new Commissioner will face wide-ranging challenges that will 

require a comprehensive, long-range strategy that current planning efforts 

do not adequately address. In the absence of a long-term strategy for 

service delivery, the agency will be poorly positioned to make needed 

well-informed decisions about its critical functions, including how many 

and what type of employees SSA will need for its future workforce, how 

the agency will address disability claims backlogs while ensuring program 

integrity, and how the agency will more strategically use its information 

technology and physical infrastructure to best deliver services.

Chairman Johnson, Ranking Member Becerra, and Members of the 

Committee, this completes my prepared statement. I would be pleased to 

respond to any questions that you may have at this time.

For further information about this testimony, please contact me at (202) 

512-7215. Michael Alexander, James Bennett, Jeremy Cox, Larry 

Crosland, Alex Galuten, Isabella Johnson, Kristen Jones, Anjalique

Lawrence, Sheila McCoy, Christie Motley, Walter Vance, Kathleen Van 

Gelder, and Jill Yost also made key contributions to this statement.

Contacts and 

Acknowledgments 

(131230)
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