Social Security Administration: Actions Needed to Strengthen Processes for Issuing Social Security Numbers to Children
Published: 2005-01-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2004, the Social Security Administration (SSA) issued about 4.2 million original Social Security numbers (SSN) and 2 million SSN replacement cards to U.S.-born children. Despite its narrowly intended purpose, today, young children need a SSN to be claimed on their parent's income tax return or to apply for certain government benefits. Because children's SSNs, like all SSNs, are vulnerable to theft and misuse, the Chairman of the Senate Committee on Finance requested that GAO (1) document SSA's current processes and internal controls for issuing SSNs to U.S.-born children under the age of 18 and (2) identify any weaknesses that may affect SSA's ability to ensure the integrity of the SSN and the efficiency of enumeration processes.
section_title: What GAO Found
paragraphs: SSA has two processes for issuing SSNs to U.S.-born children--one that allows parents to request SSNs through a hospital during birth registration and one that permits them to apply through SSA field offices--both of which include various internal control mechanisms. Today, SSA issues the majority of SSNs to children through its Enumeration at Birth (EAB) program. Participating hospitals forward the SSN request and other birth registration data to vital statistics agencies, which then send it to SSA. SSA's automated system ensures that the data are complete and mails the SSN to the parent. Parents may also request SSNs through SSA field offices by mail or in person. This process requires parents to present proof of the child's age, identity, and citizenship as well as proof of their own identity. As fraud prevention measures, SSA also interviews children 12 and older and verifies documents with a third party for those over age 1. If a child's SSN card is lost or stolen, parents may also apply for a replacement card. SSA requires proof of identification for both the parent and the child to obtain such cards. Despite SSA's efforts to improve its enumeration processes, weaknesses persist in EAB program oversight and outreach, manual birth verification procedures, and other vulnerabilities that could adversely affect the integrity of SSA's processes. Federal internal control standards state that agencies should assess and mitigate risk to their programs. However, SSA does not conduct comprehensive integrity reviews, or coordinate with external auditing agencies to ensure that vital statistics agencies and hospitals are properly collecting and protecting enumeration data for children. In addition, SSA lacks a nationwide capability to efficiently verify birth certificates for children whose parents apply through SSA field offices, although a prior SSA pilot proved successful in providing such verifications. Further, SSA lacks a policy for securing and tracking birth certificates once manual verifications are complete, making these documents vulnerable to misuse. Finally, SSA's policies for verifying birth certificates of children under age 1 and for issuing replacement SSN cards, which allow for up to 52 cards annually, remain weak and could expose the program to fraud. The Intelligence Reform and Terrorism Prevention Act of 2004 will assist SSA in protecting the integrity of the SSN by requiring the agency to verify birth documents for all SSN applicants, except for EAB purposes, and limit the issuance of SSN replacement cards.

section_title: Letter
paragraphs: Today, the majority of children born in the United States are assigned a  Social Security number (SSN) before their first birthday. The Social  Security Administration (SSA) refers to the assignment of original SSNs  and replacement SSN cards as “enumeration.” In fiscal year 2004, SSA  issued over 4 million original SSNs to U.S.-born children, of which over 90  percent were to children under age 1. The agency also issued over 2  million replacement cards to U.S.-born children. SSNs were originally  created to track workers’ employment history and eligibility for Social  Security benefits. However, today, SSNs are used for a myriad of purposes,  and even children born as U.S. citizens must have SSNs to be claimed as  dependents on their parents’ tax returns and to receive benefits from  federal programs. Because SSNs are central to so many aspects of  American life, children’s SSNs, like all SSNs, are vulnerable to fraud and  financial crimes.
Various news accounts and identity crime experts report that the theft of a  child’s identity may go undetected for years until an event—such as an  application for a driver’s license—reveal that the child’s identity was  stolen. Because of increasing concerns regarding the enumeration of  children, the Chairman of the Senate Finance Committee requested that  we (1) document current processes and internal controls for issuing SSNs  to U.S.-born children under the age of 18 and (2) identify any weaknesses  that may affect SSA’s ability to ensure the integrity of the SSN and the  efficiency of enumeration processes.
To complete our work, we examined SSA’s Program Operations Manual  System and met with SSA officials to identify the processes used to  enumerate children. We also documented the roles of select hospitals and  vital statistics agencies, which facilitate SSA’s process for enumerating  newborns. To identify weaknesses that may affect SSA’s ability to  efficiently enumerate children and ensure the integrity of the SSN, we  collected and analyzed information on SSA’s enumeration initiatives, the  results of prior internal reviews, and studies performed by SSA’s Office of  the Inspector General (OIG) and Office of Quality Assurance and  Performance Assessment. In addition, we contacted the National  Association of State Auditors, Comptrollers and Treasurers (NASACT) as  well as individual state comptrollers and inspectors general to identify and  obtain any relevant reviews of their state vital statistics agencies’ birth  registration and certification processes. Also, our Office of Special  Investigations (OSI) tested SSA’s practices for issuing replacement cards  to children by posing as parents of fictitious children and using counterfeit  documents in an attempt to obtain multiple cards.
We conducted our review at SSA headquarters in Baltimore, Maryland, and  at four regional offices—Atlanta, New York, Philadelphia, and San  Francisco—and 10 field offices. We selected the SSA regional and field  offices based on their geographic location, the volume of enumeration  activity, and participation in certain enumeration projects. We also spoke  with officials in vital statistics agencies and medical facilities in the states  of California, Georgia, Kentucky, and Maryland and the city of New York.  Our Office of Special Investigations conducted its work in 7 SSA field  offices in the District of Columbia, Maryland, and Virginia. We conducted  our work between January and December 2004 in accordance with  generally accepted government auditing standards. Appendix I discusses  our scope and methodology in further detail.
subsections: section_title: Background
paragraphs: The Social Security Act of 1935 authorized SSA to establish a record- keeping system to help manage the Social Security program, which  resulted in the creation of the Social Security number. SSA uses the SSN  as a means to track workers’ earnings and eligibility for Social Security  benefits and assigns a unique number to every person and uses this  number to create a work and retirement benefit record for the individual.  SSA issues SSNs to most U.S. citizens, and they are also available to non- U.S. citizens with permission to work from the Department of Homeland  Security. Also, in certain cases, SSA issues SSNs to non-U.S. citizens  without permission to work who require a SSN to receive federal benefits  or to lawfully admitted non-U.S. citizens to receive state or local public  assistance benefits. Due to the number’s unique nature and broad  applicability, the SSN has become the identifier of choice for government  agencies and private businesses and is used for numerous non-Social  Security purposes, such as opening bank accounts and filing taxes. Today,  even young children need a SSN to obtain medical coverage, be claimed on  their parents’ income tax return, or establish eligibility for other  government or financial benefits.
In fiscal year 2004, SSA issued approximately 5.5 million original SSNs and  12.4 million replacement cards, of which roughly 4.2 million originals and  2.3 million replacements were for U.S.-born children under age 18, as  shown in table 1. SSA’s headquarters, in conjunction with its 1,333 field  offices, issued these SSNs and cards to U.S. and noncitizen applicants. The  primary guidance SSA uses to carry out its enumeration processes is the  Program Operations Manual System (POMS). Under this guidance, SSA  field offices are responsible for interviewing applicants for both original  and replacement Social Security cards, reviewing evidentiary documents,  verifying immigration and work status of applicants, and keying  information into SSA’s automated enumeration system. Due to the burden  on field offices from the increased demand for SSNs, SSA implemented its  Enumeration at Birth program nationally in 1989 to provide parents with a  convenient opportunity to request SSNs for their newly born children  without visiting a field office. To facilitate this program, SSA contracts  with state and jurisdictional vital statistics agencies to obtain specific  information required to issue SSNs to newborns. As of March 2004, SSA  had EAB contracts with 50 states and 3 independent registration  jurisdictions, for a total cost of approximately $8.2 million.
Hospital personnel, sometimes referred to as birth registrars or clerks,  generally have overall responsibility for gathering and forwarding the birth  certificate information and SSN requests to state or local vital statistics  agencies. In instances when a baby is born outside a hospital, the  responsibility for filing the birth information typically rests on the midwife  or other person in attendance, one of the parents, or the person in charge  of the place where the birth occurred.
State vital statistics agencies are usually found within a state or  jurisdiction’s department of health. According to the National Association  for Public Health Statistics and Information Systems (NAPHSIS), vital  statistics for the United States are obtained from the official records of live  births, deaths, fetal deaths, marriages, divorces, and adoptions. The  official recording of these events is the responsibility of individual states  and independent registration areas, such as the District of Columbia and  New York City. Governments at all levels—federal, state, and local—use  vital records for statistical purposes through cooperative arrangements  with the respective state agency. At the time of our audit work, most states  restricted access to birth records, but according to NAPHSIS, 11 states  allowed “open” access to birth records, meaning that no identification  requirements or relationship is needed to obtain a certified copy of a birth  certificate.
Identity theft is one of the fastest growing crimes in the United States. In  2004, the Federal Trade Commission reported that in recent years some 10  million people—or 4.6 percent of the adult population—discovered that  they were victims of some form of identity theft. These numbers translate  into estimated losses exceeding $50 billion, but the extent to which these  statistics represent children is not well documented. However, various  news accounts and identity crime experts report that the theft of a child’s  identity may go undetected for several years until an event—such as an  application for a driver’s license—reveals that the child’s identity was  stolen. Furthermore, children may also face future financial consequences  if their SSN and name are used years before they first establish credit.
section_title: SSA Has Specific Processes for Issuing SSNs and Replacement Cards To Children
paragraphs: SSA has two primary processes for issuing SSNs and replacement cards to  children born in the United States. Today, most SSNs are issued to  children through SSA’s EAB program, while the parents of a much smaller  number of children receive SSNs through SSA’s field office application  process. To ensure that SSNs are issued properly, SSA monitors data on  EAB processing times and error rates and performs various integrity  checks for those SSNs issued by field office staff. SSA also has specific  policies for issuing replacement cards to children.
section_title: Majority of SSNs Are Issued to Children through SSA’s Enumeration at Birth Process
paragraphs: In 2004, SSA issued roughly 90 percent of SSNs to children through its  EAB program. As shown in figure 1, the majority of SSA’s enumeration  workload involves U.S.-born children who generally receive their SSNs via  states’ and jurisdictions’ birth registration process facilitated by hospitals.  Under this process, SSA accepts birth registration data from vital statistics  agencies as evidence of a child’s age, identity, and citizenship. In fiscal  year 2004, SSA issued approximately 3.9 million SSNs through EAB.
Hospital participation in EAB is voluntary. While SSA and state vital  statistics agencies have strongly encouraged participation in the EAB  program, the extent of nationwide hospital participation is unknown.  However, SSA officials believe that most hospitals participate in EAB.
Under EAB, parents in the hospitals we visited could request a SSN for  their newborn child via the hospital’s birth registration worksheet. This  worksheet was typically a standardized state-issued form used to capture  the demographic and medical information required for the child’s birth  certificate. For those parents choosing to participate in the program, SSA  guidance states that hospital representatives should provide parents with a  receipt as proof of their SSN request.
Of the nine medical facilities we visited, all provided parents with the  opportunity to request SSNs through EAB. However, each had established  its own unique policies, procedures, and internal controls for collecting,  maintaining, and transmitting birth information, including the SSN request,  in accordance with federal and state statutes. For example, one state  required that its hospitals submit all birth information directly to the state  vital statistics agency within 72 hours of the birth, while in another state,  the law required that birth information be submitted to the local registrar  within 10 days of the birth.
While submission timeframes varied among the states we visited, generally  all hospitals transmitted birth information both electronically and  manually to their respective vital statistics agencies. Birth registrars or  clerks were typically responsible for entering the birth certificate  information into an electronic birth registration computer system, which  in some cases, was directly linked to the state vital statistics agency.  Though system software varied among states, it tended to capture the  same information and was generally equipped with the same security  features. For example, in almost every hospital we visited, each birth  registrar or clerk had a personal identification password and sign-on to  access the system.
Hospital personnel, in locations we visited that submitted data  electronically, were required to make corrections to the electronic  certificate prior to submitting it to their vital statistics office, because the  computer system locked the record once the information was  downloaded. This security feature prevented staff from making changes  once the data were transmitted. However, if an error was discovered,  hospital personnel could correct it with assistance from their respective  vital statistics agency. For example, one state’s vital records office issued  a single-use pass code to the responsible birth registrar for re-entry into  the electronic registration system.
In all the states in which we conducted interviews, we also found that  once the vital statistics agency received the birth information, state  officials reviewed the birth data submitted. These vital statistics agencies  reviewed the data to ensure that the demographic and medical information  was complete. In addition, officials from one location told us that they had  also implemented other quality assurance measures, such as cross- referencing birth and death records and validating births that occur  outside the presence of a physician or midwife. Subsequently, each office  extracted and transmitted to SSA the information necessary to issue SSNs,  including the name of the child, the date of birth, the parents’ names, and  mailing address.
SSA’s data showed that the average EAB processing times varied among  vital statistics agencies and ranged anywhere from 3 weeks to 12 weeks.  An SSA official told us that some of the main reasons for the variation in  the processing time was due to the technological capabilities of vital  statistics agencies to transmit information and personnel issues. For  example, not all vital statistics agencies were electronically connected to  each of their EAB reporting hospitals. Therefore, staff had to key the birth  information into an electronic format, which increased the processing  time. Figure 2 shows SSA’s EAB process.
Once SSA receives the data, its automated system ensures that the EAB  data are complete and scans for keying errors. If no errors are detected,  SSA issues a SSN card to the parents’ mailing address. Throughout the  EAB process, SSA also serves as a technical adviser, assisting vital  statistics agencies with systems clarification and advice. Through its EAB  contracts, SSA also establishes timeliness and accuracy requirements for  EAB data and maintains this data. According to its contracts, SSA will not  pay vital statistics agencies for any EAB data received more than 4 months  after the month a birth occurs. However, SSA will accept such data for up  to 11 months after the month a birth occurs. SSA also will not process any  EAB submissions with an error rate greater than 5 percent.
section_title: Relatively Few Children Are Enumerated through SSA Field Offices
paragraphs: While the majority of U.S. children receive SSNs through the EAB program  (3.9 million), the parents of a much smaller number apply for SSNs at SSA  field offices. In fiscal year 2004, SSA issued approximately 294,000 SSNs to  children through this process. SSA and hospital officials told us that some  parents elect not to participate in the EAB program due to reasons related  to religion or privacy. Consequently, parents of children not enumerated  through EAB can apply for their child’s SSN by mail or in person at a local  SSA field office.
To apply for the SSN, parents complete a SSN application and submit at  least two documents as evidence of their child’s age, identity, and  citizenship as well as evidence of their own identity. Documents that SSA  accepts as evidence of age, identity, and citizenship for a child include, but  are not limited to, a birth certificate; a record from a doctor, clinic, or  hospital; or a religious record. SSA requires that all evidentiary documents  be either originals or copies certified by the issuing agency. Figure 3  highlights SSA’s field office process for assigning SSNs to children.
In recent years, SSA has taken additional steps to strengthen its field office  enumeration process to prevent identity theft. For example, in June 2002,  SSA began requiring field office staff to verify the authenticity of certified  birth certificates for any person age 1 or older applying for an original  SSN. To obtain this third-party verification, SSA field offices generally  mail or fax a photocopy of the original document to the pertinent vital  statistics agency or in some limited cases query an electronic system  linked directly to the vital statistics agency’s database. SSA must also  send a fee to most state vital statistics agencies to cover the cost of this  service.
In September 2003, SSA also changed its evidence requirements to  enhance its ability to verify the accuracy of SSN applications for children.  For example, SSA lowered the requirement for a mandatory in person  interview from age 18 to age 12. SSA field staff told us that they rarely have  U.S.-born children over age 12 applying for an original SSN, and generally  such applications receive closer scrutiny. In such instances, the interviews  are used as an additional safeguard against identity theft to (1) establish  that the child applicant actually exists and (2) corroborate the parent-child  relationship.
SSA also performs in-house reviews of its enumeration processes,  including those for children. For example, field office managers use SSA’s  Comprehensive Integrity Review Process (CIRP) to monitor specific  systems activity for potential fraud or misuse by employees. In addition,  SSA also requires field staff to review a SSN applicant’s supporting  evidence and input it into SSA’s Modernized Enumeration System (MES),  the computer system used to assign SSNs. Once entered, the applicant’s  information undergoes numerous automated edits and is flagged if found  suspicious. For example, MES suspends the processing of SSN  applications for parents applying for new SSNs for numerous children in a  6-month period.
In addition to processing original SSNs, SSA field offices also issue  replacement SSN cards if a card is lost or stolen. To obtain a replacement  card for a child, parents must complete a SSN application and indicate the  SSN previously issued to the child. SSA requires that the applicant provide  only proof of identity for both the parent and the child. A wide range of  documents will satisfy the proof of identity requirement. For example,  parents could use a daycare center record to prove their child’s identity  and a church membership record as proof of their own, provided that the  record includes key information required by SSA such as the person’s  name, date of birth, and physical description. See table 2 for a comparison  of SSA requirements for original SSNs and those for replacement SSN  cards.
section_title: Several Weaknesses Could Affect the Integrity and Efficiency of SSA’s Enumeration Processes
paragraphs: Despite SSA’s efforts in recent years to improve its enumeration  processes, several weaknesses persist, including a lack of EAB program  oversight and outreach, inefficient birth verification procedures, and other  vulnerabilities that could adversely affect the integrity and efficiency of  SSA’s processes. Our Standards for Internal Control provide a framework  to help agencies address such weaknesses. However, SSA has not fully  incorporated some of these controls into its enumeration processes. For  example, SSA has not undertaken action to assess the integrity of the EAB  process and to keep informed of pertinent findings of other audit agencies  that have reviewed states’ birth registration and certification processes.  Furthermore, we found that previously reported enumeration weaknesses  concerning SSA’s lack of a policy to require birth verifications for children  under age 1 and a policy to further limit replacement cards continues to  expose SSA to risks of fraudulent enumerations.
section_title: SSA Lacks Oversight to Assess the Integrity of EAB and Does Not Track Relevant Audit Findings of Other Agencies
paragraphs: SSA does not conduct periodic internal control or comprehensive integrity  reviews to assess the integrity of procedures used to collect and protect  EAB data at vital statistics agencies and hospitals, nor does it take  advantage of available audit findings of other state agencies. SSA’s EAB  contracts permit the agency to conduct on-site reviews of vital statistics  agencies’ procedures for protecting confidential information. However,  SSA’s Project Officer for the EAB program told us that the agency has not  conducted such comprehensive reviews because of a lack of resources.  The same official also told us that SSA has never used its EAB contracts to  require that vital statistics agencies conduct similar reviews of  participating hospitals. Our Internal Control Management and  Evaluation Tool states that federal agencies should have adequate  mechanisms in place to identify key programmatic risks arising from  external factors, including a consideration of risks posed by major  suppliers and contractors. Identified risks should then be analyzed for  their potential effect and an approach devised to mitigate them. However,  because SSA has not conducted reviews of entities involved in the EAB  process, it lacks important information to develop a clearer picture of  areas in the EAB process that may be vulnerable to error or fraud.
A September 2001 SSA Office of the Inspector General (OIG) report on the  EAB program suggested that more systematic oversight and management  was needed. The OIG review identified serious internal control  weaknesses in birth registration processes at selected hospitals that could  compromise the integrity of EAB data. For example, the OIG found that  hospital birth registration units often lacked adequate segregation of  duties for clerks involved in the registration process. Our internal control  standards state that key duties and responsibilities should be divided or  segregated among different people to reduce the risk of error, waste, or  fraud. Because clerks were generally involved in all phases of the birth  registration process at the hospitals included in the SSA OIG review, the  OIG said that the clerks could potentially generate birth certificates for  nonexistent children. The OIG also found that the hospitals did not have  controls in place to provide for periodic, independent reconciliations of  birth statistics with the total number of birth registrations they reported,  which could allow fictitious births to go undetected. During our visits to  eight hospitals and one birthing center, we found similar internal control  weaknesses. For example, some hospital birth units lacked the resources  to segregate various job duties among its staff. While we found that birth  registration staff in seven hospitals reconciled birth statistics with the total  number of births, the staff performing these reconciliations were not  independent of the birth registration process, which could expose the  process to fictitious birth registrations. In light of the vulnerabilities that  the OIG identified, SSA’s Project Officer for EAB told us that SSA and  NAPHSIS have met to discuss an audit plan to review hospitals in each  state.
Some state audit agencies have conducted reviews of vital statistics  agencies that have produced findings of potentially critical importance to  SSA. However, due to a lack of coordination between SSA and state audit  agencies, SSA was unaware of these audits and their findings, according to  the EAB Project Officer. Our internal control standards require that  federal managers promptly evaluate findings from audits and other  reviews that could have an impact on their operations. Over the last  several years state audit agencies have identified deficiencies in vital  statistics agencies’ operations that could have negative implications for  SSA’s EAB program and field office enumeration processes. For example:    An August 2004 Maryland Office of Legislative Affairs audit report  found that the controls at the state’s vital records agency were  inadequate to ensure that birth certificates were issued to individuals  authorized by law. Specifically, the report stated that Maryland  applicants were not required to provide sufficient identification when  requesting birth certificates, birth records for deceased individuals  were not always marked as such, and adequate oversight of the local  health departments regarding the issuance of birth and death  certificates generally did not occur. Additionally, the audit found that  controls over birth certificate forms and related blank stock  certificates were inadequate to safeguard against fraudulent  certificates being obtained for illegal purposes. Furthermore, the audit  found that access to the vital records automated system was not  adequately restricted.
A November 2001 Florida Auditor General report disclosed that  controls over the vital statistics program at selected county health  departments were inadequate and not in compliance with vital  statistics laws and rules. For example, the Auditor General found that  the state registrar and several county health departments had not  established effective controls to require documentation to show that  certified copies of vital records were issued only to authorized  recipients. The review also showed that controls over vital records  security paper at selected county health departments were not  adequate.
A May 2000 State of New York Office of the State Comptroller audit  report found several weaknesses in the New York City Office of Vital  Record’s controls over the reporting, registering, and processing of  vital records that could increase the risk that the reported number of  birth and death records in New York City may not be accurate or  complete. The audit also identified weaknesses in safeguarding vital  records at two vital records sites. As of December 2002, the State  Comptroller reported that New York City had made progress in  implementing its recommendations.
In discussing SSA’s oversight role relative to EAB and the vital statistics  agencies, SSA’s EAB Project Officer told us that the EAB office had tried  for the last 2 fiscal years to obtain funding for vital statistics agencies to  review hospitals. Recently, the EAB office submitted a proposal for the  fiscal year 2005 budget request, which included a measure to have vital  statistics agencies review hospitals’ birth registration processes and about  30,000 EAB cases nationwide. However, according to SSA’s EAB Project  Officer, the agency decided not to fund this initiative in fiscal year 2005  due to reduced budgetary resources and items determined as higher  priorities. The EAB Project Officer also acknowledged that there is no  formal or informal coordination between the EAB component and state  Comptrollers and Inspectors General offices that may conduct reviews of  vital statistics agencies. Because SSA does not have direct contact with  such entities, the official said that SSA does not hear about special studies  in states and that vital statistics agencies do not normally share these  studies with SSA.
section_title: Limited Outreach and Education to Hospitals May Limit the Effectiveness of the EAB Program
paragraphs: SSA has provided only limited education and outreach to hospitals to  ensure they consistently provide information to parents regarding the  timeframes for processing EAB requests. Thus, some parents who opt for  EAB, but may need an SSN sooner than is possible under the process, may  apply a second time at a SSA field office; increasing the likelihood that  their child will be issued two distinct SSNs.
Our internal control standards require that management ensure that  adequate means are in place to communicate with external stakeholders  that may have a significant impact on an agency achieving its goals.  However, SSA’s EAB Project Officer acknowledged that, beyond initial  contacts with hospitals when EAB was first implemented in 1989, SSA has  done little follow-up education and outreach to ensure that hospitals have  up-to-date information necessary to effectively implement the program.
SSA maintains information on EAB processing times for individual states,  which is available via its Web site. The agency also developed Form 2853,  for distribution to parents by hospital staff that lists the processing times  for their state and serves as a receipt documenting the EAB request.  However, during our fieldwork, we found that SSA has conducted no  formal training or information sharing initiatives on these resources. Thus,  hospital birth registration personnel were often unaware of the available  processing time information, and staff at one hospital provided parents  with information based on their own estimates or the prior experiences of  other parents. We also found that only a few of the hospitals we visited  were aware of Form 2853 and were providing it to parents. Thus, parents  were not consistently receiving information from the hospitals on the time  it takes to receive a SSN under the EAB process.
Because parents do not always receive consistent or comprehensive  information on EAB processing times, they may opt for the service even  though they may need a SSN for their child sooner than is possible under  the current process. In such instances, parents may later decide to apply  for a SSN in a SSA field office, which could increase the likelihood that  their child could be issued two different SSNs. In a September 2001  report, SSA’s OIG identified 67,206 instances nationwide in which parents  submitted a second SSN application when they did not receive a SSN card  for their children 1-year old or younger within 30 days of the child’s date of  birth. In reviewing these applications, the OIG identified 178 instances in  which SSA issued multiple SSNs to the same child. The report noted that  SSA’s system edits do not always recognize SSNs previously assigned to  children, especially if there are minor variances in the names provided on  the two applications. The OIG noted that the assignment of more than one  SSN to an individual creates the opportunity for SSN misuse.
SSA’s EAB Project Officer acknowledged that SSA does not do as much  education and outreach in the field as it did initially because of budget  constraints, but that the agency is currently working with the National  Association for Public Health Statistics and Information Systems  (NAPHSIS) to strengthen its efforts to ensure hospitals have essential  information to help parents make more informed decisions as to whether  EAB will meet their needs. For example, SSA is seeking NAPHSIS’  assistance to distribute information on the EAB program and EAB  processing times.
section_title: SSA Lacks a Nationwide Capability to Perform Birth Verifications
paragraphs: SSA currently lacks a nationwide capability to quickly and efficiently  perform required birth verifications for children whose parents apply for a  SSN through an SSA field office, although a prior SSA pilot project proved  successful in providing enhanced verification capabilities. As noted  earlier, SSA currently uses a predominantly manual process to perform  birth certificate verifications that is labor-intensive and time-consuming.  For example, SSA staff may submit birth verification requests directly to  vital statistics offices via the mail, fax, or in some locations, electronically.  In several other locations, this process involves SSA staff manually  completing the verifications at local vital statistics offices, which is  another option for performing the verification.
Our internal control standards state that control activities should be  effective and efficient in accomplishing the agency’s control objectives.  However, according to some field office staff that we spoke with, the  current birth certificate verification process significantly prolongs the time  required to process SSN applications, resulting in a backlog of verification  requests in some locations. Field office staff in several offices cited  examples of birth certificate verifications taking up to 6 months. Staff in  one field office reported that they frequently encounter long waiting  periods when they request birth verifications from some states. To  expedite the verification process in this office, staff told us that they allow  parents to obtain a certified copy of their child’s birth certificate from the  issuing vital statistics agency and submit the document in a sealed  envelope. Once SSA staff unseal the envelope and review the birth  certificate, they continue processing the SSN application. In their view,  this satisfied SSA’s requirement for independent verification. However,  SSA policy officials told us that this action would not meet SSA’s  requirement. We agree and believe that allowing parents to obtain and  submit certified copies of birth certificates without independent  verification exposes SSA to the potential for fraud.
A recent SSA pilot with NAPHSIS, known as the Electronic Verification of  Vital Events (EVVE) project, demonstrated that SSA field offices could  perform vital records verifications in a quicker and more efficient manner  than the current manual process. EVVE was piloted in eight states  (California, Colorado, Hawaii, Iowa, Minnesota, Mississippi, Missouri, and  Oklahoma) and local SSA offices in 26 states and territories. Figure 4  identifies all of the states and territories that participated in the EVVE  pilot.
Although EVVE was primarily established to expedite the processing of  SSA retirement and disability claims filed by older SSA customers, it was  also used to conduct required birth certificate verifications for children.  EVVE processed two types of electronic queries: birth verifications and  birth certifications. Birth verification queries were generally performed  when SSA customers possessed a certified copy of their birth certificate.  Conversely, birth certification queries were generally performed when  customers did not present their birth certificate, technical problems arose  with EVVE, or records were incompatible and prevented a successful  online verification. Ordinarily, SSA policy requires that all individuals age  1 or older or their parents/guardians present a copy of a birth certificate or  other acceptable documents to apply for a SSN, but SSA made an  exception to this requirement for customers in the pilot states. Thus,  even if a person could not produce his or her birth certificate, SSA would  still process the application and query the system for an EVVE  certification based on information orally obtained from the applicant.  After receiving the query from SSA, the vital statistics agency would run it  against its automated search system and return a “match” or “no match”  response through EVVE’s messaging hub to the requesting SSA office.  SSA, and not the applicant, assumed the costs for both types of  transactions. The EVVE process is depicted in figure 5.
Although SSA and NAPHSIS agreed that EVVE was a technical success  because it demonstrated the capability to electronically verify vital  documents, they did not move forward in implementing the system  because of a breakdown in negotiations over the price of the service.  During the pilot, SSA paid $5 for each birth verification query and $5 to   $15 for each birth certification query. At the conclusion of the pilot, SSA  attempted to negotiate a reduced price per query, but according to SSA  officials in the Division of Electronic Service Delivery, Office of  Automation Support, neither SSA nor the states could agree on what the  price should be. To resolve this matter, SSA contracted with KPMG LLP  (KMPG) to conduct a fair price assessment for the EVVE service. KPMG  determined that SSA should pay a national price of $6.42 per query.  In  addition, KPMG stated that SSA would have to pay $.48 per query to cover  the administrative costs of maintaining the EVVE messaging hub.  However, at this price, state officials believed that they would lose  revenue because SSA’s policy did not require applicants to present a birth  certificate at the time of application. Thus, clients would likely purchase  fewer birth certificates from vital records offices as a result. Unless SSA  agreed to offset this potential revenue loss by paying more for each query,  the states were reluctant to move forward. KPMG’s analysis concurred  that for on-line birth queries, the majority of which were certifications  during the EVVE pilot, the seven states included in its study (four of which  were EVVE pilot states) would indeed realize revenue shortfalls.  According to a SSA official, negotiations stalled.
After the termination of the EVVE pilot in December 2003, SSA launched  new negotiations with individual states to obtain access to their vital  records. As of November 2004, SSA had negotiated individual agreements  with six of the eight EVVE pilot states—Florida, Kentucky, Montana,  Rhode Island, Tennessee, and Texas—which allow SSA offices in those  states querying capabilities for vital statistics data, and four of these states  allow browsing capabilities. While this access to some state vital records  will help to expedite the birth certificate verification process in those  states, it will not provide the capability for SSA offices to verify birth  certificates nationwide, which could potentially be offered by EVVE or  some other nationwide verification system. As a result, SSA field offices in  states that do not allow access to vital records may still be subjected to  long waiting periods to perform birth certificate verifications.
section_title: SSA Lacks a Policy to Fully Protect Birth Documents from Misuse
paragraphs: In the absence of a nationwide electronic verification process, most SSA  field offices are using paper-driven verification processes that involve the  handling, storage, and disposal of birth certificates for which SSA has few  controls. Once SSA requests and pays for birth certificate verifications, the  servicing vital statistics office then mails a certified copy of the birth  certificate to the SSA field office. During our fieldwork, we found  considerable uncertainty among staff and various inconsistencies in the  methods field offices used to collect, maintain, and dispose of these  certified birth certificates. For example, after using the birth certificate to  clear the SSN application, some offices shredded the document. However,  in other offices, staff told us that they gave or mailed the document to the  child’s parent, while other staff told us that they kept copies of the birth  certificates in a personal desk file at their workstation.
Our internal control standards require that agencies have appropriate  policies and procedures to ensure appropriate documentation of  transactions, maintain control over vulnerable assets, limit access to  certain records, and assign accountability for their custody. In response to  our discussion with SSA policy officials regarding such weaknesses in  controls over birth certificates, SSA revised its policy on how to handle  documents purchased for evidence in November 2004 to direct staff to  shred birth certificates after processing the SSN application. However, this  policy does not address how staff are to track the number of birth  certificates received and record who handles them prior to their disposal,  which could still make the documents vulnerable to theft or inappropriate  disclosure misuse.
section_title: Previously Reported Enumeration Weaknesses Continue to Expose SSA to Fraudulent Enumerations
paragraphs: SSA has not addressed two areas of its enumeration process that continue  to expose the agency to fraud and abuse: the assignment of original SSNs  to children under age 1 and the replacement of Social Security cards. In  October 2003, we reported that SSA staff responsible for issuing SSNs  relied on visual inspections of birth certificates to determine the identity  of children under age 1 and did not independently verify this information  with state or local vital statistics agencies. During our fieldwork, we  documented a case where an individual had submitted a counterfeit birth  certificate in applying for a SSN for a nonexistent child. We also  demonstrated the ease with which individuals could obtain SSNs by  exploiting SSA’s current processes. Working in an undercover capacity  and posing as parents of newborns, our investigators used counterfeit  documents to obtain original SSNs for two fictitious children. We  subsequently recommended that SSA establish processes to independently  verify the birth records of all children. In response, SSA said that it would  conduct a study to determine the extent of the problem and the potential  for fraud in the enumeration of children through field offices. Since that  time however, in response to a July 2004 OIG report, SSA stated that due  to privacy restrictions for birth data arising from the Health Insurance  Portability and Accountability Act (HIPAA) and staff resource  constraints, it would not conduct the study. In place of the study, SSA  stated that it would review and evaluate the OIG’s work before making a  final decision regarding this issue. In the same GAO report, we also noted  that SSA’s policy for replacing Social Security cards, which allows  individuals to obtain up to 52 per year; as well as its limited  documentation requirements, also increased the potential for misuse of  SSNs. Of the 18 million cards issued by SSA in fiscal year 2004, nearly 70  percent were replacement cards. We recommended that SSA reassess its  policies in this area and develop options for deterring fraud and abuse. As  we began this review, a SSA policy official told us that the agency was still  assessing options.
We recognize that the replacement card issue applies to all SSN holders  and is not unique to children’s SSNs. However, there is a critical  relationship between SSA’s policies for enumerating children under age 1  and issuing replacement cards that could be targeted by those seeking to  fraudulently obtain valid SSNs. We are particularly concerned that  individuals could first obtain original valid SSNs for fictitious children by  exploiting weaknesses in SSA’s current verification process. These  individuals could then take advantage of SSA’s replacement card policies  to obtain excessive amounts of cards for resale to persons seeking to  establish new identities, apply for state and local benefit programs, and/or  work illegally in the United States. Such SSNs and replacement cards  would be a valuable commodity to perpetrators of fraud because they are  considered valid numbers in SSA’s records and would receive an  affirmative match response in the event that an employer queried SSA’s  system to verify the name and SSN.
Field tests we conducted during this engagement underscore the urgent  need to address this issue. Using the same original SSNs we obtained last  year for two fictitious children under age 1, our investigators obtained  numerous replacement cards over a relatively short period. By posing as  parents of these children, two investigators obtained eight replacement  cards in less than 6 weeks, before SSA field office staff placed an alert on  the two SSN records indicating a suspicion of fraud, which restricted our  investigators from receiving additional replacement cards. In particular,  our investigators obtained seven SSN cards by applying in person at  various SSA field offices and one card by mail using either a counterfeit  baptismal record or an immunization record as evidence of the children’s  identity, as well as counterfeit driver licenses as proof of identity for  themselves. For the mail-in application, they submitted a baptismal record  and an expired driver’s license and still received the card. This effort  revealed inconsistencies in staff acceptance of baptismal records, which  are a valid proof of a child’s identity under SSA’s current guidelines. Some  staff accepted these certificates, while others rejected them. We found,  however, that staff consistently accepted immunization records, which  contain less identifying information about the child than baptismal  records. This effort demonstrates that once a person obtains a SSN  fraudulently, the problem can be perpetuated and exacerbated through the  request for numerous replacement cards. It also shows that visual  inspections alone are often insufficient to detect fraudulent documents.
Recognizing the weaknesses in SSA’s enumeration processes, just prior to  the issuance of this report, the Congress passed the Intelligence Reform  and Terrorism Prevention Act of 2004. This act gave SSA 1 year to  implement regulations for independently verifying the birth documents of  all SSN applicants except for EAB and limited the issuance of SSN  replacement cards to 3 annually and 10 over an individual’s lifetime.
section_title: Conclusions
paragraphs: SSNs are essential for functioning in our society, and as a consequence,  they are highly vulnerable to misuse. Safeguarding the integrity of  children’s SSNs is particularly important, since the theft of a child’s SSN  may go unnoticed for years.
While SSA has taken steps to strengthen its enumeration processes,  several vulnerabilities remain. Because SSA does not conduct  comprehensive integrity reviews of vital statistics agencies or require that  these agencies conduct similar reviews of hospitals, SSA lacks information  to assess its potential exposure to error or fraud, identify aspects of the  birth registration process that are most problematic, and develop  safeguards to ensure the integrity of the data it relies on to enumerate  millions of children. This situation is compounded by the fact that SSA has  never coordinated with state audit agencies that have reviewed vital  statistics offices in recent years and identified serious management and  internal control weaknesses. In addition, SSA’s limited approach to  education and outreach to hospitals transmitting SSN requests could be a  factor in some parents submitting multiple applications and receiving  more than one SSN for their child—ultimately increasing the program’s  vulnerability to fraud.
While enhanced oversight and management is key to SSA’s efforts, having  an efficient mechanism to assist field staff in verifying the birth  information of child SSN applicants is equally important. However, SSA’s  field office verification process is generally labor-intensive, slow, and  requires manual handling of paper birth certificates, with few controls  over these sensitive documents. As the EVVE pilot demonstrated, viable  technological options currently exist to enhance the exchange of vital  statistics data between SSA and the states. We recognize that potential  barriers, such as system implementation, may be difficult to overcome  without congressional intervention. However, we continue to believe that  better coordination and data sharing between SSA and vital statistics  agencies nationwide could further strengthen SSA’s processes and address  many of the factors that allow identity theft to occur.
Finally, as our audit work and previous engagements show, SSA’s  processes for verifying the birth records of children under age 1 and its  policies for issuing replacement cards expose the agency to fraud. The  recently passed Intelligence Reform and Terrorism Prevention Act of 2004  includes specific requirements to address these weaknesses. It is  imperative that SSA act promptly in developing clear regulations and  timeframes for the implementation of these additional program integrity  provisions.
section_title: Matter for Congressional Consideration
paragraphs: In light of the key role certified birth certificates play in SSA’s  enumeration processes and the potential for identity thieves to use  fraudulent birth documents to obtain SSNs, the Congress should consider  authorizing the development of a cost-effective nationwide system to  electronically verify these documents.
section_title: Recommendations for Executive Action
paragraphs: To strengthen the integrity of SSNs issued to children, we recommend that  the Commissioner of Social Security:    Explore options for improving internal control mechanisms to ensure  the reliability of enumeration data from vital statistics agencies and  hospitals. This could include conducting periodic integrity reviews of  vital statistics agencies and requiring these agencies to perform  periodic audits of hospitals and birthing centers.
Establish a mechanism to better coordinate with external audit  agencies that periodically conduct reviews of states’ birth registration  and certification processes. Monitor the findings and recommendations  of such reviews to mitigate risks to SSA’s enumeration processes.
Provide additional education and outreach to hospitals to ensure they  provide consistent information to parents to decide which process best  meets their needs and to minimize second-time requests that might  cause the issuance of multiple SSNs.
Establish procedures for handling, securing, and tracking birth  certificates obtained for verification purposes to fully protect against  potential fraud and abuse.
section_title: Agency Comments
paragraphs: We obtained written comments on a draft of this report from the  Commissioner of SSA. SSA’s comments are reproduced in appendix II.  SSA also provided additional technical comments, which have been  incorporated in the report as appropriate. SSA agreed with three of four  recommendations we made to the Commissioner to strengthen SSA’s  processes and internal controls over the issuance of SSNs for children.
SSA disagreed with our recommendation that it explore options for  improving internal control mechanisms to ensure the reliability of  enumeration data from vital statistics agencies and hospitals. SSA noted  that it is not within its purview to ensure the reliability of state agency or  hospital enumeration data. However, we continue to believe that such  actions are needed because the agency uses these data to assign SSNs for  over 90 percent of U.S. citizens it enumerates. We believe that as the  agency charged with issuing SSNs, SSA bears a responsibility for ensuring  that vital statistics agencies have adequate procedures, and internal  controls to ensure that the data hospitals provide are reliable and  protected against fraud.  Accordingly, we believe that SSA could include a  provision in its EAB contracts to allow SSA to conduct periodic reviews of  the reliability of EAB information at vital statistics agencies. Similarly, we  believe that SSA could also encourage vital statistics agencies to conduct  such reviews at hospitals.
SSA agreed with our recommendation and fully supported EAB outreach  efforts to hospitals, and noted that they are currently supplying SSA field  offices with materials for distribution to their service area hospitals.   However, as our report shows, field office officials we spoke to were often  unaware of this effort. Therefore, SSA should take sufficient steps to  ensure that field office staffs are supplied with appropriate EAB materials  and that hospitals actually receive these materials.
SSA also agreed with our recommendation to better coordinate with audit  agencies and stated that the agency will encourage state auditing agencies  to share report results so that SSA can monitor the findings and  recommendations to mitigate risks to the enumeration process.
Finally, SSA agreed with our recommendation that it establish procedures  for handling, securing and tracking birth certificates obtained for  verification purposes, and stated that recently implemented procedures  adequately addressed our concern. While we commend SSA for  implementing procedures for disposing of birth certificates after they are  verified, we found no procedures in the materials provided with SSA’s  response that addressed how birth certificates are to be tracked and  secured from the time of receipt through disposal. We encourage SSA to  establish or better define procedures in existing POMS regulations in these  areas to protect birth certificates against theft or inappropriate disclosure  and misuse.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after its  issue date. At that time, we will send copies of this report to the  Commissioner of SSA, the Secretary of Homeland Security, the states and  three jurisdictions’ vital statistics offices, and other interested parties.  Copies will also be made available to others upon request. In addition, the  report will be available at no charge on GAO’s Web site at  http://www.gao.gov. If you have questions concerning this report, please  call me on (202) 512-7215. Key contributors to this report are listed in  appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: The Chairman of the Senate Committee on Finance asked us to document  the Social Security Administration’s (SSA) current processes and internal  controls for issuing Social Security numbers (SSN) and replacement cards  to U.S.-born children under the age of 18 and identify any weaknesses that  may affect SSA’s ability to ensure the integrity of the SSN and the  efficiency of enumeration processes. To address the Chairman’s questions,  we examined SSA’s enumeration policies, procedures, and internal  controls and obtained information on key initiatives planned and  undertaken to strengthen SSA’s processes. To document SSA’s current  processes and internal controls, we examined SSA’s Program Operations  Manual System (POMS) for applicable requirements and held structured  interviews with SSA headquarters officials to discuss the processes used  to enumerate U.S.-born children. We also reviewed SSA’s current  processes for enumerating children to identify areas where existing and  recent changes to POMS were not being followed, or where POMS  guidance was not sufficient to ensure the integrity of the identified  enumeration processes.
We identified two processes—Enumeration at Birth (EAB), a program set  up to let parents request their child’s SSN through hospitals and vital  statistics agencies, and another that requires application through SSA field  offices. For the EAB process, we reviewed EAB contracts for individual  states and information on timeliness and accuracy for enumerating  children. We also documented the policies and procedures for select  hospitals and vital statistics agencies that facilitate SSA’s process for  enumerating newborns. We contacted the National Association for Public  Health Statistics and Information Systems (NAPHSIS), which represents  vital statistics agencies, to gain a better understanding of their role in EAB.  We selected vital statistics agencies, in part, based on best practices  identified by SSA’s EAB Project Officer and the Executive Director of  NAPHSIS, and in some cases, based on the agencies’ lengthy timeframes  for submitting EAB information to SSA. In addition, we worked with the  vital statistics agencies and SSA to identify hospitals with relationships to  the selected vital statistics agencies that had a high volume of births and  that participated in the EAB program. In one jurisdiction, we also visited  an organized birthing center to better understand any differences between  a high-volume physician-based hospital and a midwife-based birthing  facility’s birth registration process. From both the vital statistics agencies  and hospitals, we collected and reviewed information related to the  required birth registration process as well as examined policies and  procedures related to the electronic birth certificate software to better  understand the variances between individual states and jurisdictions.
To identify weaknesses that may affect SSA’s ability to efficiently  enumerate children and ensure the integrity of the SSN, we collected and  examined information on SSA’s enumeration initiatives, the results of  prior internal reviews, and studies performed by SSA’s Office of the  Inspector General (OIG) and the Office of Quality Assurance and  Performance Assessment. We documented these officials’ perspective on  SSA’s enumeration initiatives and identified areas where vulnerabilities  and gaps exist in SSA’s implementation of these policies through  interviews. In addition, we examined external reviews conducted by  individual state comptrollers and inspectors general to determine existing  weaknesses and concerns regarding state vital statistics agencies’ birth  registration and certification processes. To identify these reports, we  worked with the National Association of State Auditors, Comptrollers and  Treasurers (NASACT) to contact each of their membership, which consists  of the offices of state auditor, state comptroller, or state treasurer in the 50  states, the District of Columbia, and U.S. territories. In addition, we  contacted state auditing and inspectors general divisions in states and  jurisdictions that we visited. After receipt of specific audit and  investigative reports from responsive states, we examined each report for  the adequacy of its methodology and the validity of its conclusions. We  also contacted NAPHSIS to identify weaknesses and recommended areas  of improvement for an electronic verification pilot project it had with SSA  called the Electronic Verification of Vital Events (EVVE). We examined the  EVVE evaluation study, which highlighted analysis of EVVE’s error rates,  query types, and records of no-matches. Also, our Office of Special  Investigations tested SSA’s enumeration practices to illustrate how SSA’s  policy on replacing Social Security cards can be abused. By posing as  parents of the two fictitious children we previously had enumerated by  SSA, and reported on in October 2003, our investigators used these SSNs  and counterfeit documents to obtain SSN replacement cards through visits  to local SSA field offices. In addition, we also solicited replacement cards  through the mail.
We conducted our review at SSA headquarters in Baltimore, Maryland, and  at four regional offices—Atlanta, New York, Philadelphia, and San  Francisco—and 10 field offices. We selected the SSA regional and field  offices based on their geographic location, the volume of enumeration  activity, and participation in certain enumeration projects. We also spoke  with officials in vital statistics agencies and medical facilities in the states  of California, Georgia, Kentucky, and Maryland and the city of New York.  For our work on replacement cards, our Office of Special Investigations  conducted its work in seven SSA field offices located in the District of  Columbia, Maryland, and Virginia. We performed our work between  January and December 2004 in accordance with generally accepted  government auditing standards.
section_title: Appendix II: Comments from the Social Security Administration
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: The following team members made key contributions to this report:  Richard Burkard, Jean Cook, Mary Crenshaw, Paul Desaulniers, Jason  Holsclaw, Corinna Nicoloau, Andrew O’Connell, and Roger Thomas.