January 2001 Major Managem

Challenges and 

Program Risks

Social Security Adminis

GAO-01-261

Page 1 GAO-01-261 

Letter 

Overview 

Major 

Performance 

and 

Accountability 

Challenges

Related GAO 

Products

Performance 

and 

Accountability 

Series
Page 2 GAO-01-261 SS
of th

Page 3 GAO-01-261 

United States General Accounting Office

Washington, D.C. 20548

January 2001

The President of the Senate

The Speaker of the House of Representati

This report addresses the major performa

accountability challenges facing the Socia

Administration (SSA) as it seeks to “prom

economic security of the nation’s people t

compassionate and vigilant leadership in 

managing America’s social security progra

includes a summary of actions that SSA h

that are under way to address these challe

outlines further actions that GAO believes 

This analysis should help the new Congre

administration carry out their responsibil

improve government for the benefit of the 

people.

This report is part of a special series, first 

January 1999, entitled the Performance an

Accountability Series: Major Management 

and Program Risks. In that series, GAO ad

Congress that it planned to reassess the m

and criteria used to determine which fede

government operations and functions sho

highlighted and which should be designat

risk.” GAO completed the assessment, con

comments provided on a publicly availabl

draft, and published its guidance docume

Determining Performance and Accountab

Challenges and High Risks (GAO-01-159SP

November 2000.

This 2001 Performance and Accountabilit

contains separate reports on 21 agencies

each cabinet department, most major inde
Page 4 GAO-01-261 SS

agencies, and the U.S. Postal Service. The se

includes a governmentwide perspective on p

and management challenges across the fede

government. As a companion volume to this 

is issuing an update on those government op

and programs that its work identified as “hig

because of either their greater vulnerabilitie

fraud, abuse, and mismanagement or major c

associated with their economy, efficiency, or 

effectiveness.

David M. Walker

Comptroller General 

of the United States
Page 5 GAO-01-261 
Page 6 GAO-01-261 

The Social Security Administration (SSA) 

major programs that provide benefits to m

million recipients: the Old Age and Surviv

(OASI) program, the Disability Insurance 

and the Supplemental Security Income (S

SSA’s fiscal year 1999 expenditures of mor

billion constituted over one-fifth of all fed

disbursements. This amount is expected t

the coming years as the baby-boom gener

the life expectancy of Americans continue

Even with its considerable workload, SSA 

a leader in federal service delivery. Additi

agency produces timely and accurate fina

statements and is a leader among governm

for its accountability reporting. However, 

challenges continue to face SSA as it adm

programs now and in the future. The mos

overarching issue facing SSA is the long-t

of the social security system. At issue is h

SSA’s programs fiscally sustainable after t

number of Americans born in the baby bo

become eligible for retirement. Without ac

reform the social security system, the nat

continuing difficulties financing social sec

in the long term.

In addition to the solvency issue, SSA face

following major performance and accoun

challenges that will further affect its abilit

administer critical programs.
Page 7 GAO-01-261 

Research and 

Evaluation

As the nation’s expert on social security is

uniquely positioned to assess the program

of economic and demographic trends and 

areas where policy changes are needed to 

recipients’ needs are met efficiently and c

However, in numerous reports and testim

shown that SSA has not always been suffi

in using its research, evaluation, and polic

components to identify areas where legisl

changes are needed and to assist policym

developing options for change. Thus, SSA 

several opportunities to provide informat

Congress and others to use to address cru

issues. For example, we reported that SSA 

sufficiently contributing to the solvency a

sustainability debate or developing policy 

address long-standing problems with the 

Over the last 2 years, however, SSA has ta

• Play an active research, evaluation, and pol

development role

• Improve SSA's disability determination proc

return people to work

• Sustain management and oversight of 

long-standing, high-risk Supplemental Secu

Income (SSI) issues

• Better position SSA for future service delive

challenges

• Further strengthen controls to protect SSA 

information
Page 8 GAO-01-261 SS

strengthen its research and policy developm

identify emerging issues, and develop option

change. For example, SSA has significantly i

the level of staff and resources available to s

research activities and has several analyses p

underway to address key trust fund solvency

program, and SSI program integrity issues. H

many of SSA’s actions are still in the early sta

their effect on SSA program policy is unclear 

time.

Determining 

Disability and 

Focusing on Work

SSA’s disability determination process is frag

complex. As a result, making timely and accu

disability determinations is one of SSA’s mos

challenging service delivery issues. These on

weaknesses result in beneficiaries often wai

than 1 year for final disability decisions. Mor

disability programs are expected to grow sig

over the next 10 years. By 2010, SSA expects 

applications for DI benefits to increase by as 

percent over 1999 levels. 

In 1994, SSA embarked on a massive effort t

and streamline the agency’s disability determ

process. The initial redesign plans were over

ambitious, and results were disappointing. S

SSA has twice revised and scaled back its in

redesign plan in accordance with our recom

to emphasize those initiatives offering the gr

potential for improvement, such as efforts to 

the consistency of decisions. 

In addition to continued inefficiencies in the 

determination process, very few beneficiarie

work because SSA’s disability programs focu

applicants’ and beneficiaries’ inability to wo

than their potential or capacity to work. In 1

reported that if only an additional 1 percent 

million DI beneficiaries left the rolls and retu
Page 9 GAO-01-261 

work, lifetime cash benefits would be red

$3 billion. SSA has begun to place greater 

returning beneficiaries to work. Moreover

passed Ticket to Work and Work Incentive

Improvement Act of 1999, which expande

vocational services, is expected to enhanc

incentives for people with disabilities. Th

represents a positive step toward helping 

disabilities return to work. However, muc

be done. We have recommended that SSA 

move forward in developing a comprehen

work strategy that integrates, as appropri

intervention, better identification of work 

and essential return-to-work services for a

beneficiaries. Such a strategy could requir

improvements to staff skill levels and area

as well as changes to the disability determ

process. An improved return-to-work stra

benefit recipients who want to work and t

taxpayers that support the DI program.

SSI Program 

Vulnerabilities

Problems we identified with the SSI progr

substantial overpayments and SSA’s inabil

outstanding debt, have spurred congressi

of the program. In 1997, we designated SS

program because of the program’s insuffic

management oversight and susceptibility 

waste, and abuse. We found that, to a grea

problems stem from an organizational cul

places a greater priority on processing an

claims than on controlling expenditures a

management approach characterized by a 

fulfill its role in SSI policy development. T

often paid insufficient attention to verifyin

financial eligibility, deterring fraud and ab

identifying options for addressing underly

weaknesses that impede program integrit

was designated high-risk, SSA has taken n

actions to improve program integrity. 
Page 10 GAO-01-261 SS

For example, SSA has stepped up its efforts 

verify recipient financial eligibility for SSI vi

computer matching and other means. The ag

sought and obtained new legislation last yea

strengthened its ability to obtain applicant in

resource information from financial instituti

state databases for essential eligibility inform

use credit bureaus, private collection agenci

levies, and other tools to recover delinquent 

SSA’s initiatives have the potential to signific

improve SSI management and financial integ

However, additional actions are needed, incl

revising SSA’s work credit and measurement 

which has historically rewarded staff for cla

processed rather than for fully verifying app

eligibility and preventing overpayments. Unt

progress is made in these and other areas, th

program will remain at high risk of waste, fr

and mismanagement. 

Serving the Public Among federal agencies, SSA has long been 

one of the leaders in service delivery. Even t

considers service delivery one of its top prio

agency faces significant challenges that coul

its ability to provide high-level service delive

next decade and beyond. SSA expects to exp

significant increase in the demand for servic

baby boom generation ages. In addition, the 

retirement of a large portion of SSA’s own w

over the next decade and changing customer 

expectations for the types of services deliver

further strain agency operations. SSA’s data s

2009, more than one-half of its 63,000 employ

eligible for retirement. By 2010, more than 80 

its upper level managers and senior executiv

eligible to retire. Consistent with our recomm

to cope with pending staff retirements, SSA 

initiatives, such as succession planning and 
Page 11 GAO-01-261 

leadership development programs, to prep

workforce for the future. SSA’s human cap

can be seen as a part of a broader pattern 

capital shortcomings that have eroded mi

capabilities across the federal governmen

Risk Series: An Update (GAO-01-263, Jan. 

discussion of human capital as a governm

risk area.

In addition to addressing its human capita

SSA has also pursued a number of inform

technology initiatives to modernize and en

automation capabilities; however, these ef

with mixed success. SSA also recently com

ambitious “2010 Vision” document, which 

SSA envisions the agency functioning in t

While we have not yet fully evaluated the 

represents a positive step toward the agen

acknowledging and preparing for future s

challenges. However, the 2010 Vision docu

map out the steps needed to achieve this v

consistently recommended that SSA deve

detailed service delivery plan to translate 

action. Such a plan should specifically dis

future human capital and information tech

investments will be tailored to support ne

doing business. In the absence of such a p

budget resources may be spent on initiativ

activities that do not adequately support S

work environment and may ultimately res

degradation of service to the public.

Internal Control 

Weaknesses

In prior work, we have reported that SSA 

weaknesses in its information systems’ int

to ensure that automated agency data are 

and credible. In particular, we reported th

control weaknesses have exposed SSA an

systems to external and internal intrusion

subjecting automated data to potential un
Page 12 GAO-01-261 SS

access and modification. SSA has made notab

in addressing information systems internal c

its ability to respond to a disruption in busin

result of a disaster or long-term crisis. For in

has strengthened physical security agencywi

successfully tested its critical workloads dur

year 2000. However, SSA must continue to fo

internal control issues. A recent audit by an i

accounting firm identified continuing deficie

SSA’s information systems internal controls i

access and other areas. The audit acknowled

progress in resolving a number of internal co

weaknesses but emphasized the importance 

continuing corrective actions. 
Page 13 GAO-01-261 

y g

The mission of SSA, established as an ind

agency in 1995, is to “promote the econom

the nation’s people through compassionat

leadership in shaping and managing Amer

security programs.” With its independence

new measure of control over its resources 

authority to address the various performa

management challenges it faces in its OAS

programs. 

The OASI and DI programs together are c

known as “social security.” They are finan

payroll taxes and provide benefits to retir

disabled workers and their dependents an

fiscal year 1999, SSA administered the ear

of 140 million individuals who contributed 

security system. In addition, about 44 mill

received more than $380 billion in OASI an

SSI is financed from general tax revenues 

cash assistance to needy, aged, blind, or d

recipients with limited or no work histori

year 1999, 6.6 million recipients were paid 

$28 billion in SSI benefits. Combined, SSA

provide essential financial support and tou

nearly every American family. 

SSA is considered a front-runner in severa

federal management areas, including serv

and financial reporting. Indeed, in the are

delivery, in fiscal year 1999, 87 percent of 

rated the agency’s service as “good” or “ve

Additionally, for the past 7 years, the agen

received unqualified opinions on its finan

statements. Moreover, SSA has been a lea

producing accountability reports. Recent 

issued several months before the statutor

deadline. In addition, SSA was one of only 

agencies to receive the Association of Gov

Accountants “Certificate of Excellence in 

Reporting” award for its fiscal year 1999 a
Page 14 GAO-01-261 SS

report. However, SSA faces several challeng

affect its ability to administer its programs.

The most critical issue facing SSA is ensurin

term solvency of the social security system a

number of Americans born during the baby b

become eligible for retirement. Many analyst

the social security system as designed and ad

will be unable to meet its current commitmen

generations of beneficiaries. Specifically, acc

OASDI trustees’ estimates, total benefits paid 

will gradually exceed OASDI revenues collec

2037, the trust funds are expected to be deple

time, annual tax revenues will be sufficient to 

about 72 percent of benefit obligations. To a

situation, there are various reform proposals 

under consideration by the Administration a

Congress. Any actions taken to restore the s

the social security system need to address th

sustainability of the system, to ensure that th

balances income adequacy and individual eq

consider how readily changes could be imple

administered, and explained to the public.

In addition to the solvency issue, SSA faces a

performance and accountability challenges t

documented in numerous reports, testimoni

management reviews of SSA over several ye

include the need for SSA to (1) better use its 

evaluation, and policy components to addres

program vulnerabilities; (2) improve its disab

determination and return-to-work processes

strengthen the integrity of the SSI program; 

more recipients in an environment of changin

expectations and fewer staff; and (5) mainta

information technology infrastructure to sup

operations. SSA’s success in addressing these 

will require sustained management attention 

proactive leadership in identifying strategies 
Page 15 GAO-01-261 

Program 

Challenges Require 

SSA to Play an 

Active Research, 

Evaluation, and 

Policy 

Development Role

In prior work, we have noted that address

management and performance challenges 

would require the agency to strengthen its 

policy development activities. Accordingl

that SSA should (1) identify areas where l

other changes are needed to address prog

weaknesses and (2) assist policymakers in 

and developing options for change.

As the nation’s expert on social security is

uniquely positioned to assess the program

of economic and demographic trends and 

areas where policy changes are needed to 

recipients’ needs are met efficiently and c

However, SSA has not always been suffici

this regard. In monitoring SSA’s 1995 trans

component of the Department of Health a

Services to an independent agency, we rep

SSA had not always played a leadership ro

and suggesting policy options for its prog

SSA’s advisory board issued a report that c

the agency should take a leadership role i

of major policy changes, rather than conti

of reacting to short-term crises. The board 

that SSA often had an overly cautious atti

initiating analysis of controversial policy i

In prior work, we have also reported that 

undertaken the range of research, evaluat

analysis needed to inform policymakers a

about long-term trust fund financing issue

was not sufficiently contributing to the na

surrounding the most critical overarching 

its programs. In addition to the solvency d

identified other areas that called for enha

and policy analysis, such as the need for S

better data on its disability beneficiary po

the extent to which its disability program

program objectives, conduct analyses of w
Page 16 GAO-01-261 SS

retirement trends to prepare for future work 

environment demands, and develop options 

addressing long-standing SSI polices that hav

contributed to increased overpayments and 

abuse.

SSA has acknowledged the need to play a mo

research and policy development role. In the 

years, SSA has initiated several reorganizatio

policy component to strengthen its capacity. 

reorganizations are expected to enhance SSA

capability by linking policy development and 

a strong research and evaluation base. Acco

agency officials, over the last 2 years SSA ha

significantly increased staff resources and al

doubledfrom $17 million to more than $30 

millionthe amount of funds available to su

research by universities and other entities ou

agency.

According to SSA officials, the newly restruc

enhanced policy component has several com

ongoing, and planned initiatives. For exampl

agency recently completed a study of variou

proposals aimed at women and the possible 

increasing the early retirement age. Addition

November 2000, SSA issued a report on the S

including discussion of the status of the prog

opportunities to simplify administration of th

and plans for improving payment accuracy a

integrity. SSA is strengthening its capacity to 

different projection models to analyze the im

of proposed program changes. In 1998, SSA 

submitted to the Congress its first major SSI 

proposal aimed at improving program integr

SSA’s policy component has also taken steps 

more SSA program data and its published re

available via the Internet to a wider range of 

stakeholders and interested parties. 
Page 17 GAO-01-261 

Reflecting its commitment to this issue, S

conducting effective research, program ev

policy development a key strategic goal. A

SSA’s current strategic plan and fiscal yea

performance plan include objectives and 

completing additional analyses and provid

timely information to decisionmakers. SS

conduct ongoing research and provide the 

others with comprehensive analyses of th

various social security reform proposals. 

several years, SSA intends to promote disa

changes by gathering additional data on th

characteristics of disability beneficiaries a

that may facilitate more effective return-t

strategies.

SSA’s actions to restructure its policy com

the analyses it plans to conduct should en

ability to conduct timely research, provid

to decisionmakers, and develop options fo

change. However, many of SSA’s initiatives 

planning stages or have not yet been com

their effect on SSA program policy is uncl

time. If sustained, SSA’s stepped-up resear

development activities should allow it to p

active role in critical policy debates, such 

at ensuring the long-term solvency of soci

trust funds. If properly targeted, SSA’s act

areas should also allow it to identify emer

more effectively and to develop sound po

before major program crises occur. SSA in

measure the success of its efforts by the e

its customers—including the Congress an

Management and Budget—believe its rese

and of high quality. In time, these measure

provide a clearer picture of whether SSA’s 

effective or whether additional actions ar

research, evaluation, and policy developm
Page 18 GAO-01-261 SS

Key Contact Barbara D. Bovbjerg, Director

Education, Workforce, and

Income Security Issues

(202) 512-7215

bovbjergb@gao.gov

Additional Progress 

Is Needed to 

Improve SSA’s 

Disability 

Determination 

Process and to 

Return People to 

Work

Our prior work has shown that SSA’s disabili

determination process is time-consuming, co

expensive. Individuals who are initially denie

by SSA and appeal their claim often wait a lo

a final agency decision. SSA’s past efforts to r

claims process have not achieved the intend

and SSA is still trying to improve the process

SSA’s DI and SSI programs are expected to g

significantly over the next decade, making a

timely disability determinations remains one 

most challenging service areas. Additionally, 

not developed, as we have recommended, a 

comprehensive return-to-work strategy that 

identifying and enhancing beneficiaries work 

consequently, few people have left the rolls t

work. 

Improvements to the 

Disability 

Determination 

Process Have Been 

Limited

SSA’s complex disability claims process has 

plagued by a number of long-standing weakn

have resulted in lengthy waiting periods for 

seeking disability benefits. For example, clai

are dissatisfied with the initial determination 

appeal frequently wait more than 1 year for a 

decision. We have reported that these long w

due, in part, to complex and fragmented dec

making processes that are laden with many l

reviews and multiple hand-offs from one per

another. The cost of administering the DI an

programs reflects the demanding nature of t

In fiscal year 1999, SSA spent almost $4.1 bil

percent of its administrative budget on these 
Page 19 GAO-01-261 

even though beneficiaries of these progra

less than 20 percent of the agency’s total n

beneficiaries.

In addition to its difficulties in processing 

has also experienced trouble ensuring tha

about a claimant’s eligibility for disability 

accurate and consistent across various pr

components. For example, our work show

year 2000, about 40 percent of applicants 

were denied at the initial level appealed th

and about two-thirds were awarded benef

happens in part because decisionmakers a

level use a different approach to evaluate 

make decisions than those at the appellat

inconsistency of decisions at these two lev

questions about the fairness, integrity, and 

disability programs.

Since 1994, SSA has taken a number of ste

address these problems; until recently, it h

limited success. First, in an effort to impr

process, SSA embarked on a massive effo

the way it made disability decisions. Amo

things, SSA planned to develop an automa

simpler claims intake and appeal process

method for making disability decisions, m

guidance and training for decisionmakers 

the process, and an improved process for 

quality of eligibility decisions. We conclud

report, however, that 2 years into the plan 

achieve significant results. The agency’s s

was due in part to the overly ambitious na

redesign plan, the complexity of the redes

and inconsistent stakeholder support and 

In our 1996 report, we recommended that 

focus on those few initiatives considered 

and rethink its approach to testing. In 199

scaled back its plan, but progress continu

in part because even the scaled-back plan 
Page 20 GAO-01-261 SS

large and cumbersome to keep on track. By 

was behind on its near-term initiatives, and i

process changes initially showed disappoint

inconclusive results as tested. Only one of its 

which combined a number of proposed proc

changes, began to show promise. 

Moreover, as originally envisioned, SSA’s pla

redesign its disability determination process 

dependent upon successful technological 

improvements. The agency spent most of the 

designing and developing a new computer so

application to automate the disability claims 

However, SSA experienced performance pro

delays in developing this software and, after 

approximately 7 years and more than $71 mi

reportedly spent, decided to discontinue the 

In 1999, we again made a number of recomm

designed to improve SSA’s prospects for suc

agency continues its efforts to improve the c

process. We again recommended that the ag

its resources on those initiatives offering the 

potential for improvement, such as efforts to 

the consistency of decisions, improve quality 

and enhance computer support systems. In M

SSA issued a new disability plan that is cons

some of our recommendations. According to 

officials, the revised redesign plan, even in it

back form, represents the most significant ch

the disability process since the 1950s. The re

focuses on even fewer initiatives and builds 

areas where the agency showed some promi

example, it emphasizes initiatives to improve 

and consistency of decisions. SSA plans to c

training efforts to improve the consistency o

which agency officials believe have resulted 

eligible individuals receiving benefits 500 da

during the years 1997 through 1999. In additi

begun broader field-testing of a number of it
Page 21 GAO-01-261 

promising initiatives and process changes 

integrated fashion and is pursuing a new a

strategy to support the processing of disa

Until recently, SSA’s proposed changes pr

affected the initial decision-making level i

leaving problems largely unresolved at the 

where appeals are decided. However, beg

January 2000, the agency initiated plans to 

operations at its hearing offices in an effo

efficiency and significantly reduce proces

that level. Beginning at 37 of its 140 hearin

SSA implemented significant changes in o

structure to hold teams accountable for im

workflow. The agency also plans to impro

of data collection and management inform

addition, SSA has developed and begun im

action plan to improve operations at the A

Council, the final level of administrative r

appealed cases. However, much is left to b

and all of SSA’s disability-related improve

and the effectiveness of these efforts rema

It is vital that SSA address its claims proc

now, before the agency experiences anoth

workload when the baby boomers reach t

prone years.

SSA Lacks a 

Comprehensive 

Strategy to Return 

the Disabled to Work

The number of working age beneficiaries 

SSI programs has increased by 65 percent 

10 years (see fig. 1). We have reported tha

beneficiary population has grown, numer

technological and medical advances, com

changes in society and the nature of work

increased the potential for some people w

to return to, or remain in, the labor force. 

legislative changes have focused on return

beneficiaries to work. The Americans Wit

Act supports the premise that people with 

can work and have the right to work, and 
Page 22 GAO-01-261 SS

Work and Work Incentives Improvement Act 

increased beneficiaries’ access to vocational 

Indeed, many beneficiaries with disabilities i

they want to work, and many can work in to

market if they receive needed support. In 19

recommended that SSA place a greater prior

helping disabled beneficiaries work, and SSA 

a number of actions to improve its return-to-

practices. But even with these actions, SSA h

poor results in this arena, where less than 1 

beneficiaries and few SSI beneficiaries leave 

return to work.
Page 23 GAO-01-261 

Figure 1: Increase in Disability Beneficiaries, 1989−1999

Note: Includes DI disabled workers aged 18-64. Als

and disabled SSI recipients aged 18-64 with a feder

a federally administered state supplementation.

Source: GAO analysis of data from SSA’s Annual S

Supplement to the Social Security Bulletin, multiple 

Even in light of the new Ticket to Work A

continue to face difficulties in returning s

beneficiaries to work, in part due to statut

weaknesses in the design of the DI progra

reported in the past, these weaknesses inc

or disability decision-making process that 

individuals as either unable to work or ha

0

2

4

6

8

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

SSI and DI Recipients (in Millions)
Page 24 GAO-01-261 SS

capacity to work. This either-or process prod

strong incentive for applicants to establish th

to work to qualify for benefits. Moreover, retu

services are offered only after a lengthy dete

process. Because many applicants are unem

the time of application and remain unemploy

the eligibility determination process, it is like

skills, work habits, and motivation to work d

during this wait. Thus, individuals who have 

successfully established their disability may 

reason or desire to attempt rehabilitation an

competitive work. Unlike some private secto

insurers and foreign social insurance system

not incorporate into its initial or continuing 

assessment process an evaluation of what is 

an individual to return to work. Instead, an i

who might have been able to stay in the wor

return to work with assistance—and thus sta

long-term disability benefit rolls—has little c

prove his or her inability to work to obtain a

through DI or SSI.

Moreover, SSA has not traditionally reported 

progress in returning people with disabilities 

its fiscal year 1999 performance report, SSA’s 

work performance measures were focused o

such as SSA’s progress in developing tools to 

beneficiaries achieve self-sufficiency, rather 

outcome of whether individuals were being r

work. SSA recognized that its performance m

not track long-term achievement of self-suffi

that it needed to establish better measures. T

has taken some preliminary steps in that dire

its fiscal year 2001 performance plan, which 

percentage increase in beneficiaries who beg

work period or who participate in a program 

permits them to work and to continue receiv

under certain conditions.
Page 25 GAO-01-261 

In addition, SSA has recently stepped up i

work efforts. For example, it has (1) estab

Office of Employment Support Programs 

employment of disabled beneficiaries, (2) 

limit on the amount a DI beneficiary can e

and still receive benefits to encourage peo

disabilities to work, (3) funded 12 state pa

agreements that are intended to help the s

services to increase beneficiary employm

(4) begun a demonstration project to dete

providing access to the right medical treat

beneficiaries will enable them to work. 

While these efforts represent positive step

return people with disabilities to work, mu

be done. As we have recommended previo

should develop a comprehensive return-to

strategy that integrates, as appropriate, ea

intervention, including earlier and more e

identification of work capacities and expa

capacities by providing necessary return-t

assistance for applicants and beneficiarie

comprehensive return-to-work strategy w

fundamental changes to the underlying ph

direction of the DI and SSI programs, incl

determination of disability. Policymakers 

carefully weigh the implications of such c

Key Contacts Barbara D. Bovbjerg, Director

Education, Workforce, and

Income Security Issues

(202) 512-7215

bovbjergb@gao.gov

Joel C. Willemssen, Managing Director

Information Technology

(202) 512-6408

willemssenj@gao.gov
Page 26 GAO-01-261 SS

Long-Standing, 

High-Risk SSI 

Issues Require 

Sustained 

Management and 

Oversight

In prior work, we have reported on SSI prog

and mismanagement, increases in overpaym

SSA’s difficulties in recovering outstanding S

These issues have spurred congressional crit

SSA’s ability to manage its workloads effectiv

February 1997, we designated SSI a high-risk 

because of its susceptibility to fraud, waste, 

mismanagement. We found that, to a great ex

inability to address its most significant probl

the SSI program is attributable to two underly

(1) an organizational culture that places grea

on processing and paying claims than on con

program expenditures and (2) a managemen

characterized by SSA’s reluctance to fulfill it

development and planning role in advance o

program crises.

In regard to SSA’s organizational culture, our 

confirmed that there has been a tendency am

and managers to view the SSI program in mu

way as SSA’s OASI and DI programs—where 

placed on quickly processing claims for indiv

an earned right to benefits—rather than as a 

program, where additional income and asset 

verifications are necessary. As a result, SSA 

relied heavily on recipient self-reporting of t

financial circumstances, with insufficient ag

verification. SSA’s culture has also contribut

low priority placed on recovering overpayme

they are identified. This has been evidenced 

past reluctance to use available overpaymen

tools and to pursue additional tools aggressi

warranted, including tax refund offsets, cred

reporting, collection agencies, and interest le

outstanding debt. In fiscal year 1999, outstan

debt and newly detected overpayments for t

totaled more than $3.8 billion. SSI write-offs

overpayments waived or deemed uncollecta

SSA—also totaled about $466 million for the 
Page 27 GAO-01-261 

have reported that write-offs represent ov

program dollars that SSA will likely never 

In regard to SSA’s management approach, 

shows that SSA’s actions have been histor

in nature, resulting in missed opportunitie

critical policy issues before they reach cri

However, in response to our high-risk des

report recommendations, SSA has taken s

coordination with the Congress to improv

integrity and management of SSI. For exa

SSA submitted its first major SSI legislativ

which included numerous overpayment d

recovery provisions. Many of these provis

incorporated into the Foster Care Indepen

which was signed into law last year. The A

directly addresses several of our prior 

recommendations, provides SSA with add

for obtaining applicant income and resour

information from financial institutions, ac

databases for essential eligibility informat

a period of ineligibility for applicants who 

assets to qualify for SSI benefits, and usin

bureaus, private collection agencies, inter

other means to recover delinquent debt.

SSA also produced its first SSI manageme

1998, which discussed its intent to take ag

action to control program overpayments a

outstanding debt. And, according to SSA o

agency is currently doing this in part thro

computer matching and other means. Thi

more frequent (monthly) data matches to 

ineligible SSI recipients residing in nursin

stepping up efforts to obtain online acces

recipient employment and income inform

year 1999, SSA also sought and obtained a

budget resources to substantially increase 

of SSI financial redeterminations conduct

reviews focus on income and resource fac
Page 28 GAO-01-261 SS

eligibility and payment amounts. Through th

SSA calculated that it collected and prevente

$600 million in overpayments above fiscal ye

levels. SSA’s Office of Inspector General (OIG

significantly increased the level of resources 

dedicated to investigating program fraud and 

Finally, SSA has begun using tax refund offse

delinquent SSI debtors and has recovered ab

million in additional collections over the last 

years. This increased emphasis on program i

further evident in SSA’s planning and perform

measurement activities. SSA’s current strateg

annual performance plans include several go

performance measures targeted specifically 

SSA’s goal of improving SSI program integrit

addressing fraud and abuse.

SSA’s initiatives have the potential to signific

improve SSI management and financial integ

However, many problems facing the program 

attributable to more than 20 years of inatten

payment controls and will take time to corre

overpayments and outstanding debt owed to 

program remain at high levels. Further, our r

shows that SSI continues to be vulnerable to 

especially from individuals feigning disabilit

help of suspicious medical providers and mi

Last year, the OIG reported that, since 1998, 

representative payees1

 have defrauded the p

nearly $8 million in benefit payments. This w

attributable primarily to SSA’s failure to scre

monitor these individuals sufficiently. SSA’s 

recently reported that, due to weaknesses in 

verification processes, thousands of fugitive 

incorrectly received $76 million in SSI benef

1

SSA appoints representative payees to SSI recipients w

determined incapable of managing their own benefits.
Page 29 GAO-01-261 

last several years, despite a law prohibitin

payments.

We believe that sustained and additional a

needed to improve SSI program integrity. 

with our prior recommendations, SSA sho

forward in fully implementing the debt co

currently available to it, continue to devel

ways to improve program management an

and seek legislative changes as appropria

also consider ways to revise its work cred

measurement system, which has historica

staff for cases processed, rather than thor

verifying applicant eligibility or preventin

overpayments. Any revised system should 

specific goals and performance measures 

and managers accountable for ensuring p

integrity. If properly implemented and ma

measures should ultimately facilitate a ch

organizational culture and provide much-

incentives for staff to devote time to verif

information, preventing fraud and abuse, a

program overpayments. Until additional p

made, the SSI program will remain at high 

fraud, abuse, and mismanagement.

Key Contact Barbara D. Bovbjerg, Director

Education, Workforce, and

Income Security Issues

(202) 512-7215

bovbjergb@gao.gov

SSA Needs to 

Better Position 

Itself for Future 

Service Delivery 

Challenges

Among federal agencies, SSA has long bee

one of the leaders in service delivery. Inde

year 1999, SSA reported that 87 percent o

rated its services as “good” or “very good.

considers service delivery one of its top p
Page 30 GAO-01-261 SS

its current performance report includes spec

and strategies to provide accurate, timely, an

service to the public. Our work shows, howe

agency is not without weaknesses in its curr

delivery system. For example, although 800-

answers given to customers concerning thei

payments were largely correct during fiscal y

percent of nonpayment-related answers wer

inaccurate. Also, in 1999, the Social Security 

Board reported that many persons who visit

SSA’s field offices encountered crowded wai

and long waiting times for service.

More importantly, however, SSA faces signif

challenges that could hamper its ability to pr

level service delivery, including a projected i

the demand for services. Demand for service

rapidly as the baby boom generation ages an

disability-prone years (see fig. 2). By 2010, S

applications for DI to increase by as much as 

over 1999 levels. Determining eligibility for d

benefits is a complex process that spans a nu

offices and can take over a year to complete

discussed in the section on disability, SSA al

trouble managing its disability determination 

adding additional cases without rectifying ca

processing issues will result in greater servic

problems for SSA. By 2010, SSA also expects 

applications for retirement benefits will incr

percent over 1999 levels. 
Page 31 GAO-01-261 

Figure 2: Predicted Increases in OASI, DI, and SSI Applications 

Note: SSA’s Office of the Chief Actuary does not ha

applications for OASI and DI beyond 2010. Also, the

reflect some double-counting of those individuals w

DI and SSI, a group that is expected to grow from a

fiscal year 1999 to 640,000 in fiscal year 2010.

Source: Data provided by SSA’s Office of the Chief 

Other challenges facing SSA’s ability to pr

quality service delivery, center on its work

SSA’s workforce is aging, and beginning in 

predicting a retirement wave that will pea

more than one-half of SSA’s 63,000 employ

eligible for retirement. The percentage is 

employees in SSA’s supervisor or manager 

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

7500

8000

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Total DI

Total OASI

Total SSI

Number of Claims

Fiscal Year

Total Applications Predicted
Page 32 GAO-01-261 SS

particular, more than 80 percent of SSA’s upp

managers and executives (GS-14, GS-15, and 

will be eligible to retire by 2010. Secondly, SS

to increase staff skills to deal with changing 

expectations and needs. SSA’s already-limite

information systems staff will be increasingl

challenged to develop and implement new te

including more electronic (for example, Inte

applications to serve the public in a more co

cost-effective, and secure manner. At the sam

some aspects of SSA’s customer service wor

likely become more time-consuming and labo

This is primarily due to the growing proporti

non-English speaking customers and the risi

of disability cases involving mental impairm

situations result in more complex cases that 

diverse staff skills.

SSA has a number of initiatives underway to 

prepare for its future challenges. In 1998, it b

working on an effort to systematically monit

measure the needs, expectations, priorities, 

satisfaction of customer groups, major stake

and its workforce. Additionally, as we recom

1993, and as required by law, SSA recently de

workforce transition plan to spell out steps n

that its workforce will be able to handle futu

delivery challenges. In addition, recognizing 

shortly be facing the prospect of increasing r

SSA conducted a study that predicts staff ret

and attrition by year, from 1999 to 2020, by m

position and agency component. This initiati

beyond identifying the dates that its employe

became eligible to retire by also factoring in 

historical retirement data to make more real

projections. SSA is also beginning to take ste

expected leadership gap. We have long stres

importance of succession planning and form

to develop and train managers at all levels at 

early as 1993, we recommended that SSA ma
Page 33 GAO-01-261 

succession planning a permanent aspect o

resource planning and evaluate the adequ

investments in management training and 

SSA recently created three new leadership 

programs to help prepare selected staff to 

and top-level leadership positions at the a

far, the agency’s workforce approach show

that many of its steps are consistent with 

human capital management. 

To cope with its growing workloads, SSA 

extensively on information technology to 

processing efficiencies and improved cust

To this end, the agency has devoted consi

and effort to identifying strategies to mee

providing world-class service. For examp

recently begun to offer retirees the option 

for benefits online. SSA has also pursued 

initiatives over the past decade aimed at e

technological infrastructure needed to en

claims-processing capabilities and the ove

administration of its programs. For examp

implemented the Intelligent Workstation/L

Network to provide the automation infras

support its redesigned work processes an

availability and timeliness of information, 

pursuing other initiatives to achieve electr

processing. However, SSA has experience

success in carrying out its information tec

initiatives, and we found that it has not be

clearly demonstrate the benefits resulting 

its most significant investments. Because 

information technology initiatives are stil

stages of development, evidence of how t

improve the agency’s processing capabilit

to the public remains to be seen.

More recently, SSA has taken additional s

plan for its future service delivery challen

SSA completed an ambitious “2010 Vision
Page 34 GAO-01-261 SS

that articulates how it envisions the agency f

in the year 2010. For example, SSA anticipat

services either inperson, over the telephone, 

Internet, where telephonic and electronic ac

services are equipped with sophisticated voi

recognition and language translation feature

work is accomplished through a paperless p

the “Vision” document, SSA also states that i

heavily on technology and a workforce with 

updated skills to accomplish its mission. Wh

not yet fully evaluated this new vision, it rep

positive agency step toward acknowledging 

preparing for future service delivery challen

However, to be useful in making information 

and workforce decisions, we have stressed t

document should be followed by a more deta

delivery plan that spells out who will provide 

of services in the future and where these serv

made available. SSA has not yet developed s

blueprint for how it will achieve its vision. 

The combination of the expected increase in 

services, imminent retirement of a large part 

workforce, changing customer expectations

questionable success in technology investme

potentially crippling force to SSA’s service de

has begun taking concrete steps to address t

challenges; however, without a service deliv

SSA cannot ensure that its investments in its 

and technology are consistent with and fully 

future approach to service delivery.

Key Contacts Barbara D. Bovbjerg, Director

Education, Workforce, and

Income Security Issues

(202) 512-7215

bovbjergb@gao.gov
Page 35 GAO-01-261 

Joel C. Willemssen, Managing Director

Information Technology

(202) 512-6408

willemssenj@gao.gov

SSA Needs to 

Further Strengthen 

Controls to Protect 

Its Information

With the retirement of the baby-boom gen

individuals living longer in retirement, SSA 

serving greater numbers of individuals wi

To handle these workload demands, SSA 

the effective use of technology and autom

and performance data to guide and evalua

of its efforts. In prior work, we have repo

must address weaknesses in its informatio

internal controls to ensure that automated 

are both reliable and credible. In particula

that internal control weaknesses have exp

agency and its computer systems to exter

internal intrusion, thus subjecting automa

potential unauthorized access and modific

made notable progress in addressing infor

systems internal control weaknesses and 

strengthening its ability to respond effecti

disruption in business as a result of a disa

term crisis. For instance, SSA has issued a 

policy, strengthened physical security age

successfully tested its critical workloads d

It is important for SSA to continue to add

weaknesses in its information systems’ int

A recent audit by an independent public a

noted continuing weaknesses in several c

SSA’s overall information protection inter

structure. The general areas where expos

included (1) controls designed to limit or 

to computer programs, data, and other co

resources at nonheadquarters sites; (2) po

rules governing the operation of devices t

external access to the SSA network; and (
Page 36 GAO-01-261 SS

technical configuration of a contractor-contr

of SSA’s network.2

 Until corrected, a weaken

incomplete information protection control st

continue to impair SSA’s ability to mitigate th

unauthorized access, modification, or disclo

sensitive SSA information.

The audit acknowledged SSA’s progress in re

these issues, and it emphasized the importan

continuing corrective action. The need for a 

entitywide security framework to address th

security and integrity of SSA operations will 

agency moves ahead with plans to increase i

dependency on the Internet and Web-based a

to serve the American public. The audit reco

that SSA accelerate and build on its progress 

information protection.

Key Contact Robert F. Dacey, Director

Information Security Issues

(202) 512−3317

daceyr@gao.gov

2

SSA corrected the last item prior to issuance of the aud
Page 37 GAO-01-261 

Research and 

Policy 

Development

Observations on the Social Security Admi

Fiscal Year 1999 Performance Report and 

2001 Performance Plan (GAO/HEHS-00-12

2000).

SSA’s Management Challenges: Strong Lea

Needed to Turn Plans Into Timely, Meanin

(GAO/T-HEHS-98-113, Mar. 12, 1998).

Social Security Administration: Effective 

Needed to Meet Daunting Challenges (GA

July 25, 1996).

Social Security Administration: Leadershi

Accompany Transition to an Independent 

(GAO/HEHS-95-59, Feb. 15, 1995).

Social Security 

Disability 

Programs

SSA Disability: Other Programs May Provi

Improving Return-to-Work Efforts (GAO/T

July 13, 2000).

Social Security Disability: SSA Has Had M

in Efforts to Improve Caseload Manageme

(GAO/T-HEHS-00-22, Oct. 21, 1999).

SSA Disability Redesign: Actions Needed 

Future Progress (GAO/HEHS-99-25, Mar. 

SSA Disability: Return-to-Work Strategies 

Systems May Improve Federal Programs

(GAO/T-HEHS-96-133, July 11, 1996).

Supplemental 

Security Income 

Program

Supplemental Security Income: Additiona

Needed to Reduce Program Vulnerability 

Abuse (GAO/HEHS-99-151, Sept. 15, 1999)
Page 38 GAO-01-261 SS

Supplemental Security Income: Long-Standin

Require More Active Management and Progr

Oversight (GAO/T-HEHS-99-51, Feb. 3, 1999)

Supplemental Security Income: Action Need

Standing Problems Affecting Program Integr

(GAO/HEHS-98-158, Sept. 14, 1998).

Supplemental Security Income: Long-Standin

Put Program at Risk for Fraud, Waste, and A

(GAO/T-HEHS-97-88, Mar. 4, 1997). 

Service Delivery to 

the Public

SSA Customer Service: Broad Service Delive

Needed to Address Future Challenges

(GAO/T-HEHS/AIMD-00-75, Feb. 10, 2000).

Information 

Technology

Information Security: Software Change Cont

Social Security Administration (GAO/AIMD-

June 30, 2000).

Social Security Administration: Update on Ye

Other Key information Technology Initiative

(GAO/T-AIMD-99-259, July 29, 1999).

Social Security Administration: Technology 

Performance Challenges Threaten Progress 

Modernization (GAO/AIMD-98-39, June 19, 1

Social Security Administration: Software De

Process Improvements Started, but Work Re

(GAO/AIMD-98-39, Jan. 28, 1998).

Social Security Administration: Risks Associ

Information Technology Investment Continu

(GAO/AIMD-94-143, Sept. 19. 1994).
Page 39 GAO-01-261 

Major Management Challenges and Progr

Governmentwide Perspective (GAO-01-24

Major Management Challenges and Progr

Department of Agriculture (GAO-01-242)

Major Management Challenges and Progr

Department of Commerce (GAO-01-243)

Major Management Challenges and Progr

Department of Defense (GAO-01-244)

Major Management Challenges and Progr

Department of Education (GAO-01-245)

Major Management Challenges and Progr

Department of Energy (GAO-01-246)

Major Management Challenges and Progr

Department of Health and Human Service

(GAO-01-247)

Major Management Challenges and Progr

Department of Housing and Urban Develo

(GAO-01-248)

Major Management Challenges and Progr

Department of the Interior (GAO-01-249)

Major Management Challenges and Progr

Department of Justice (GAO-01-250)

Major Management Challenges and Progr

Department of Labor (GAO-01-251)

Major Management Challenges and Progr

Department of State (GAO-01-252)
Page 40 GAO-01-261 SS

Major Management Challenges and Program 

Department of Transportation (GAO-01-253)

Major Management Challenges and Program 

Department of the Treasury (GAO-01-254)

Major Management Challenges and Program 

Department of Veterans Affairs (GAO-01-255

Major Management Challenges and Program 

Agency for International Development (GAO

Major Management Challenges and Program 

Environmental Protection Agency (GAO-01-2

Major Management Challenges and Program 

National Aeronautics and Space Administrat

(GAO-01-258)

Major Management Challenges and Program 

Nuclear Regulatory Commission (GAO-01-25

Major Management Challenges and Program 

Small Business Administration (GAO-01-260

Major Management Challenges and Program 

Social Security Administration (GAO-01-261)

Major Management Challenges and Program 

U.S. Postal Service (GAO-01-262)

High-Risk Series: An Update (GAO-01-263)
Ordering 

Information

The first copy of each GAO report is free. Addi

reports are $2 each. A check or money order sh

out to the Superintendent of Documents. VISA 

credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a 

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

Orders by visiting:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders by phone:

(202) 512-6000

fax: (202) 512-6061

TDD (202) 512-2537

Each day, GAO issues a list of newly available r

testimony. To receive facsimile copies of the dai

from the past 30 days, please call (202) 512-60

touchtone phone. A recorded menu will provide 

how to obtain these lists.

Orders by Internet:

For information on how to access GAO reports 

send an e-mail message with “info” in the body 

info@www.gao.gov

or visit GAO’s World Wide Web home page at: 

http://www.gao.gov

To Report Fraud, 

Waste, or Abuse in 

Federal Programs

Contact one:

• Web site: http://www.gao.gov/fraudnet/fraud

• e-mail: fraudnet@gao.gov

• 1-800-424-5454 (automated answering syst

Official Business

Penalty for Private Use $300

Address Correction Requested